The Japanese Government has provided a K23.1 billion grant to finance rehabilitation of two Electricity Supply Corporation of Malawi (Escom) key power distribution substations in Lilongwe.
The money will be used to expand and refurbish Kanengo Power Substation and rebuild and refurbish Old Town Power Substation.
Speaking during the signing of the agreement in Lilongwe on Monday, Japanese Ambassador Satoshi Iwakiri said his government is committed to supporting Malawi’s efforts to enhance its socioeconomic development, including infrastructure development in the energy sector.
“Supporting the energy sector in Malawi is one of the priority areas outlined in our official development assistance cooperation with Malawi,” he said.
Iwakiri said it is estimated that the country’s energy demand will rise to 1 155 megawatts (MW) by 2025; hence, the refurbishment of the two substations will enable more people to meet their daily electricity needs through efficiency.
“The refurbishment will also increase economic activities in the city as we are all aware that the inadequate and inefficient supply of electricity affects performance of industries,” he said.
The two substations are said to be in bad state as they were built in 1967 and cannot match the current energy distribution technologies, resulting in power distribution losses.
Minister of Finance Felix Mlusu commended the Japanese Government for the support, saying Malawi’s development will be accelerated through the provision of adequate power supply for both household and industrial needs.
He said: “Our distribution infrastructure in terms of transmission from substations is lacking considering that these were investments made decades ago. We are talking about over 40 or 50 years ago.
“The infrastructure is old and cannot cope with modern demand which is high and supply is low. As we distribute, we are losing a lot of power along the way, thereby affecting end users.”
Escom regional manager (Centre) Macvittie Chiphwanya said the investment is expected to double the distribution capacity of the two substations by maximising their potential.
He said the Old Town Substation was the first infrastructure constructed in Lilongwe which receives power from Nkula Power Station for distribution to the Capital City.
Currently, the country’s energy production capacity is at 441.95MW against a project demand of 800MW.