US wants Escom debts cleared
The Millennium Challenge Corporation (MCC) says it wants government to clear all Electricity Supply Corporation of Malawi (Escom) debts before it can start implementing its long-awaited $350.7 million (about K140 billion) energy compact meant to revitalise the country’s power sector.
Speaking at a press conference in Lilongwe on Tuesday during the visit of MCC deputy vice-president for compact implementation Andrew Mayock, MCC Malawi chief executive officer Susan Banda said the clearance of Escom debts is among the conditions precedent to the compact’s entering into force.
She said: “Some of the issues are to do with Escom’s financial status and the balance sheet in terms of clearing Escom debts so that the company becomes a financially-viable entity. Government has committed to convert Escom debts into equity so that they no longer appear as debts on the balance sheet.”
Banda, however, said most of the conditions for the compact to enter into force have been met, saying those remaining are programme-related such as staff recruitment and development of detailed implementation plan for the compact’s five-year span.
She said they expect the compact to enter into force by end of this year while actual construction work on the ground may start by end of next year.
Mayock urged for patience from the public, saying implementation of their compacts takes time, adding MCC respects steps Malawi took to reinstate the compact after it was suspended during the late president Bingu wa Mutharika’s rule over poor governance concerns.
“Some of the work that needs to be done is laying a 550 km power transmission line which needs to be designed, laid and raised over the period. This requires more careful planning,” said Mayock.
