Blackouts discouraging investors—Matola
Minister of Energy Ibrahim Matola has said prevailing intermittent power outages in Malawi are stifling both local and foreign investors into the country but has assured that government is working towards reforming the power sector to reverse the situation.
“With intermittent power supply, serious investment in manufacturing or even small-scale business is discouraged or stifled,” said Matola in Lilongwe.
He was speaking when he addressed participants at the weekend during a breakfast marking the launch of the United States of America (USA)-funded Millennium Challenge Corporation (MCC) Entry into Force.
The Entry into Force means that Malawi can now begin to access the $350.7 million energy grant aimed at reviltalising the country’s energy sector.
“Government is working towards reforming the power sector to create a conducive environment for foreign and local investors and welcome more independent power producers,” said Matola.
Malawi, just like any other country, requires an increase in the inflow of investment which is key to creating jobs and growing the economy in the process.
Matola explained that it is government’s wish to see more Malawians accessing electricity and businesses enhancing their margins through increased productivity, which he said in turn, will lead to creation of employment opportunities for Malawians.
According to the minister, Malawi continues to face power shortages and unreliable power supply because power generation capacity is constrained.
He said such is the case because of various factors such as old and outdated machinery, inadequate transmission and distribution network and also due to environmental issues that impact the efficient operation of generation system.
“It is for this reason that investments proposed in the infrastructure development project of compact is guaranteed to improve the availability, reliability and quality of the power supply by increasing the efficiency, through-put capacity and stability of the national grid.”
The minister said under the power sector reform project of the compact agreement, there will be support to government in institutional strengthening which he said is key for investment.
Matola also said another challenge besetting the power sector in Malawi is inadequate legal and policy framework which he said makes it difficult for Malawi to attract private sector investors into the energy sector.
He hoped that the compact agreement with the US government will create an enabling future expansion of the power sector.
Some of the key achievements by Malawi towards the Entry into Force include the funding of a turnaround facility to meet gaps in Escom’s working and investment capital needs and the sharing of a construction schedule for Kapichira II, which demonstrates that the government will be adding substantial new generation capacity to the system at the end of this calendar year.
