The African Development Bank (AfDB) has granted the Malawi Government $23 million (about K44 billion) to rehabilitate key infrastructure at Kapichira and Nkula B hydro power plants to stabilise electricity supply in the country.
The financing agreement, signed in Lilongwe on Thursday, will support the rehabilitation of damaged turbines, generators and control systems at the two plants, which have suffered setbacks due to ageing infrastructure and extreme weather events.
AfDB country manager Macmillan Anyanwu said the project is designed to protect existing generation capacity at a time Malawi’s electricity system is under severe strain.
“Today, about one quarter of Malawians have access to electricity and the remaining three quarters do not,” he said.
Anyanwu warned that failure to maintain existing infrastructure risks worsening the country’s energy deficit.
“What this project is trying to do is to ensure that the current installed capacity is protected. If we allow that decline, the situation will get worse,” he said.
Anyanwu stressed that the financing is in the form of a grant, not a loan, easing pressure on Malawi’s already strained public debt position, currently at K23.9 trillion or 90.9 percent of the country’s gross domestic product.
The AfDB project forms part of a broader $118 million (about K207 billion) rehabilitation programme involving multiple development partners, including the World Bank, European Union and European Investment Bank.
In his remarks, Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said the funding will help to restore generation capacity and unlock economic activity across sectors.
“These two plants have strategic importance and after the damage, the capacity to generate power was substantially reduced,” he said.
Mwanamvekha said improved electricity access is critical to economic growth, particularly in sectors such as mining, agriculture and manufacturing.
He noted that unreliable power supply has forced some mining operations to rely on costly diesel generation, undermining productivity.
“The rehabilitation is also expected to support value addition, job creation and improved service delivery, as energy remains a key constraint across the economy,” said Mwanamvekha.
But the minister cautioned that the success of the project will depend on strict financial discipline and oversight.
“We need to use this money properly, resources must be properly accounted for,” he said, warning that inefficiencies in procurement have historically led to losses.
The agreement comes as Malawi intensifies efforts to expand electricity access towards its long-term development targets, with authorities indicating that additional financing discussions with development partners are underway.
Malawi’s installed electricity generating capacity is at 554.24 megawatts (MW) with 101MW from solar power, according to Electricity Generation Company data.
