It has emerged that Malawi requires $5.5 billion (K9.55 trillion) to increase electricity access from the current 25.9 percent to 70 percent by 2030.
By 2030, Malawi aims to add 1.15 million on-grid connections and 1.55 million off-grid connections.
This is based on the Malawi Energy Compact which formed part of the Africa Energy Summit, dubbed ‘Mission 300’ in Dar es Salaam, Tanzania last month.
President Lazarus Chakwera and other African leaders signed a declaration to undertake projects that will increase access to reliable and affordable energy.
The compact has since called on partners to join forces in bridging this gap by supporting key strategies.
It reads: “Malawi’s energy transformation requires bold collaboration and significant funding, with a total financing need of $5.5 billion to 2030. While $530.8 million has been secured, a substantial funding gap of $4.95 billion remains.
“This compact calls on partners to join forces in bridging this gap by supporting key strategies. Partnering with Malawi in this endeavour is vital to unlocking sustainable, equitable energy access and fostering long-term resilience in the energy sector.”
The first Pillar-Energy Generation and Supply, to be undertaken by Electricity Generation Company of Malawi (Egenco) and Independent Power Producers (IPPs) requires $2.743 billion (about K4.75 trillion), yet only $13 million (about K22.5 billion) is available.
Regional integration, particularly on interconnection infrastructure, will cost $510 million (about K884 billion), but there is only $25 million (about K43 billion), while last mile connections that require $1.1 billion (about K1.9 trillion) have a funding gap of $823 million (K1.4 trillion).
According to the compact, some of the resources are supposed to come through bank loans and grants, European Union (EU), European Investment Bank, African Development Bank, World Bank, levies and tariffs.
Efforts to get comment from Minister of Energy Ibrahim Matola yesterday proved futile as he was said to be caught up in meetings.
However, in an interview during the Africa Energy Summit, Matola said Malawi was deploying advanced metering systems, adopting cost-reflective tariffs and strengthening governance across the energy sector.
“These reforms are designed to improve service delivery, attract investment, and ensure long-term financial sustainability.
“Our planned interconnectors with Zambia, Mozambique, and Tanzania are critical lifelines for cross-boundary electricity trade, creating opportunities for regional collaboration and economic growth,” he said.
During the same summit, where the compact was unveiled, Chakwera said interconnectors with Mozambique, Zambia and Tanzania will allow countries to enhance power trading and tap into cost-effective energy sources.
On the sidelines of that meeting, the World Bank provided Malawi a $250.8 million (about K435.6 billion) grant.
This financing is coming under the Accelerating Sustainable and Clean Energy Access Transformation in Malawi (Ascent Malawi) Project whose aim is to increase access to sustainable and clean energy.
During the Malawi- EU Investment Forum last November, delegates identified Malawi’s low electrification rate as a significant impediment to economic progress.
Zuwa Energy CEO Jones Ntaukira, whose firm is involved in renewable energy provision, said there are investment opportunities in solar technologies, which offer scalable and cost-effective alternatives to the grid.
But Energie Development Innovation director Géraldine Bruggeman-Palliere said the success of these ventures hinges on implementing cost-reflective tariffs.
Malawi has installed generation capacity of 550 megawatts (MW), comprising 398MW from hydro (73 percent); 101MW from solar (18 percent) and 52MW from thermal diesel.
Out of the 550MW, Egenco generates 444MW, representing 81 percent of the market share while Independent Power Producers (IPPs) generate 112MW.
