Lilongwe-Salima water project needs K175bn

Malawi Government is seeking to increase a loan from local commercial banks to finance the Salima-Lilongwe Water Project from K105 billion to an equivalent of $100 million (about K175.1 billion).

In April 2023, Parliament passed the Financial Bill No. 11 of 2023 to allow government to borrow K105 billion from local banks to finance the $315 million (about K552 billion) flagship water project awarded to Khato Civils (Pty) Ltd and South Zambezi joint venture.

However, government is now seeking to amend the NBS Bank plc and National Bank of Malawi plc Lake Malawi Water Supply Project Loan Authorisation Act of 2023 to change the value of the loan to an equivalent of $100 million.

According to the Bill, the revision of the amount follows the devaluation of the kwacha and the K105 billion falls short of the 30 percent that government planned to invest in the project.

“The sum of K105 billion previously authorised by Parliament now, due to the recent currency re-alignment, falls short of the $100 million equity contribution from government into the project,” reads the Bill in part.

Asked if the resources will be enough to implement the project, Ministry of Water and Sanitation Principal Secretary Elias Chimulambe said the finance aspect is being handled by Ministry of Finance and Economic Affairs, and the Treasury.

Meanwhile, Khato Civils spokesperson Daniel Mababa said the contractor is still mobilising resources and machinery on the ground. He said government assured that there is money to start the project.