Electricity Supply Corporation of Malawi (Escom) is the backbone of the country’s power sector.
Established in 1958 as the Nyasaland Electricity Supply Commission, the power supplier was later renamed Escom when Malawi attained independence in 1964.
For decades, Escom operated as a monopoly, controlling electricity generation, transmission and distribution nationwide.
Malawi’s modern power journey began with the commissioning of the 24-megawatt Nkula A hydropower station in 1966 and its installed capacity had risen to 362 megawatts by 2016.
During periods of low water levels in the Shire River where dynamos generate over 95 percent of the country’s hydropower, diesel generators supplement power supply.
In the 1960s and 70s, electricity demand was largely concentrated in industrial hubs and urban centres in towns and cities.
The addition of Tedzani 1 and 2 hydropower stations between 1972 and 1976 helped Escom meet the national demand at the time.
However, from the 1980s onward, investment in new generation capacity was dwarfed by rapid population growth and power consumption.
By 2000 when Escom commissioned Kapichira I hydropower plant, demand had already surged beyond the 351 megawatts available.
The country’s heavy reliance on limited hydropower resources, coupled with significant system losses, made it increasingly difficult to satisfy peak demand.
Chronic power outages became the norm.
These were driven not only by inadequate capacity, but also by low tariffs, weak financial performance and insufficient reinvestment in infrastructure.
By 2015, electricity demand was rising at an alarming rate, recording an 18.8 percent increase in the 2015–2016 period alone. In response, the government amended the Electricity Act in 2016 to unbundle Escom’s operations, improve efficiency and attract private sector participation through independent power producers (IPPs).
The amendment transferred power production to the newly established Electricity Generation Company (Egenco), while Escom retained responsibility for transmission and distribution.
The law created Power Market Limited (PML) as an independent single buyer to acquire electricity from Egenco and IPPs for sale to Escom for distribution.
However, PML struggled to exercise full operational autonomy as Escom retained control over bulk customer accounts and power purchase agreements.
This stirred institutional conflicts over the single buyer mandate until 2023, when the government dissolved PML and returned the power purchase status to Escom.
Today, all power producers sell their electricity to Escom under power purchase agreements.
They include Egenco, JCM Power, Mulanje Hydro Limited, Serengeti Solar and Mulanje Electricity Generation Agency.
Additional IPPs with a combined capacity of approximately 1,000 megawatts have also signed agreements.
These include Raiply Malawi, Press Energy, Aspin Energy, Aza Gas, Mzuni, Nyika Hydropower and Quantel Renewable Energy.
The single buyer model provides market stability, but also presents structural limitations as electricity is dispatched based on domestic demand.
When total generation exceeds Escom’s immediate requirements, producers are forced to curtail output. This leads to lost sales, underutilised assets and foregone national revenue.
This calls for a policy shift.
Escom should transition from being a strict single buyer to a principal buyer, allowing generators to sell surplus electricity beyond the corporation.
Currently, Malawi is connected to the regional power pool through international interconnector lines.
Power producers can leverage this opening to export excess power to neighbouring countries, generating much-needed foreign currency.
Producers exporting electricity would pay wheeling charges for transmission line use to Escom in foreign currency for a mutually beneficial deal.
Furthermore, new IPPs should be encouraged to establish operations under carefully structured tax incentives that promote cross-border electricity trade. In return, a negotiated portion of generated power could be reserved for domestic industrial development so that economic growth at home is not compromised.
With the foundations for power sector reform laid, the country requires strategic policy refinement to unlock the full value of our energy resources.
If we embrace regional electricity trade and position ourselves as an energy exporter, not merely a consumer, we can transform our power sector into a driver of economic resilience. We risk remaining trapped in energy poverty and economic stagnation unless we act decisively.
