Power blackouts suffocating industries

The incessant power blackouts have hit hard the manufacturing industry which is spending K93.6 billion annually to run generators during outages, Malawi Confederation of Chambers of Commerce and Industry (MCCI) has disclosed.

MCCCI president Lekani Katandula in a response to a questionnaire said the blackouts are causing companies to post losses since generators cannot run some machines to full capacity.

The persistent power blackouts have brought to their knees some small-scale businesses such as salons and barbershop that solely rely on electricity.

Katandula said businesses are spending about K260 million per day to run generators, translating to K7.8 billion monthly and K93.6 billion annually.

Katandula said a quick survey of businesses show capacity losses ranging from 10 to 25 percent.

He said: “Electricity Supply Corporation of Malawi [Escom] power interruptions and load shedding has been there for years now. Whether these are due to natural disasters or vandalism or working with an age-old infrastructure to carry out their operations—such interruptions affect industry operations.

“Escom has not moved with time and as a result load shedding and power outages have become a norm.”

The president disclosed that casual workers are the most hit because during outages they earn nothing.

“For permanent workers, there have not been significant job losses. However, if the power outage continue and, therefore, become semi-permanent, job losses will ultimately happen,” Katandula feared.

The industry did not provide estimates on the losses it is posting through the dwindling of production and sales, but an economic expert, Betchani Tchereni, from the Malawi University of Business and Applied Sciences, said the decrease in production implies that taxes which would have been collected may not be available.

“[Malawi Revenue Authority] is just a collector of taxes that depend on the vibrancy of the economy. To this end, it is the responsibilities of government to ensure that the amenities such as electricity are readily available to make the economy perform,” he said.

Health facilities—public and those privately owned under Christian Health Association of Malawi (Cham) have been squeezed to a corner as they are pumping millions of kwacha to buy fuel to run generators to save lives, particularly in theatres.

Cham spokesperson Michael Phiri said health facilities are negatively impacted because more money is spent on fuel to run generators.

He said: “Theatre operations require power all time to support life. And any department in a hospital set-up is important; so in an event of a power outage, we ensure that generators are running. It is not easy to sustain that.”

Phiri said keeping generators running takes a lion’s share of their budgets.

He said: “Our facilities have been seriously affected. We rely on Escom for our operations, but with the blackouts we have been impacted in a big way.

“We do not get funding from donors and, as such, we rely on user fees for our operations. Unfortunately, our charges are low because of an agreement we have with the government.”

John Kayese, a barbershop operator in Bangwe Township, Blantyre, said his monthly earnings have dwindled and he is failing to make ends meet because of power outage.

A Zingwangwa-based salon operator in Blantyre Catherine Moloka, shared a similar story.

She said the power outage has brought her business to its knees.

Bakhresa Grain Milling (Malawi) Limited, one of the big manufacturers in the country, said the power outage following the Tropical Storm Ana damage to Kapichira Power Station in January 2022 is a national problem.

“Just like any other electricity consumer, we are also facing prolonged blackouts and power fluctuations which impact on machinery, capacity utilisation and production.

“The blackouts have sharply increased our machinery maintenance costs. The blackouts lead to scaled down production. We only hope that with the recent intervention by the Ministry of Energy and parliamentary committees on these electricity woes, will bring a tangible and lasting solution,” said the company’s human resource and compliance manager Richard Tchereko.

He said electricity is a main factor of production and economic growth.

Tchereko also bemoaned high electricity tariffs in Malawi compared to neighbouring countries.

Bakhresa has a predominant market share of the local wheat flour market. The flour is used by bakeries, biscuit and confectionary manufacturers as  well as for other products.

Ministry of Energy spokesperson Upile Kamoto said government was doing everything to add power to the national grid end blackouts.

He said Mpatamanga Hydropower Plant, a 350 megawatt (MW) project to be developed under a Public Private Partnership agreement, would be constructed along the Shire River.

“This project will be undertaken by the Electricity Generation Company [Egenco]. The private investor has been identified, community engagements have been underway and relevant environmental studies are underway,” said Kamoto.

He also said government is pushing for a 50MW solar PV power plant in Salima.

Kamoto said the solar PV power plant will also be built by Egenco and a contractor was identified to construct the first 10MW of the project.

“[We also have] expansion of Wovwe 4.5MW Hydropower Plant by Egenco. [There is also] 50MW Combined Cycle Gas Turbine Power Plant. Feasibility study is underway. Procurement processes for a firm to conduct feasibility studies are underway,” he said.

The ministry said government also have Quantel 50MW Solar PV Power Plant project and its ground breaking was done and construction will begin soon.

For the Kammwamba 300MW coal-fired power plant, Kamoto said feasibility studies were done and processes were underway to identify a joint venture partner.

“Besides all these [projects], there is Malawi-Mozambique Interconnector Project—this project involves construction of a 400kV transmission line from Matambo Substation in Mozambique to Phombeya Substation in Malawi.

“The transmission line will import power from Mozambique and the Southern African Power Pool. The line has the potential to import 200MW from SAPP but Malawi will initially import 50MW from Mozambique by December 2023. This is not a generation project but rather a transmission project that will add power to the grid,” said Kamoto.