The Malawi Parliament has approved the country's decision to turn to the World Bank for a $150.1 million loan to finance the supply of electricity. This decision comes a few weeks after the Breton Woods Institution granted another loan of $57 million to Mozambique and Malawi to finance the interconnection between these two countries.
The decision was taken unanimously by the members of the Malawian Parliament. The country agrees to turn to the World Bank for a loan of $150.1 million. The loan will be used to finance an electricity access project in the country. More specifically, the envelope will amount to $144 million, repayable over a 38-year period, with a six-year grace period. The other part will be a grant from the World Bank Group amounting to $6 million.
Actions for better electricity coverage
The Malawian government in its forecasts aims to increase electricity access rates to 80% by 2035. To achieve this, a series of projects are under way to connect as many households as possible to the national grid, which will involve extending the electricity grid. On the other hand, the country is relying on off-grid solar energy to reduce its deficit, as the electrification rate is currently barely 20%.
As part of the implementation of this project, technical capacity building seminars will be organised for staff of Eskom, the national electricity company, the Ministry of Energy and other actors in the country’s electricity sector. As Joseph Mwanamvekha, Minister of Finance, Economic Planning and Development (quoted by the newspaper Nyasatime), acknowledged, the project has three elements in one: “electrification through connection to the national grid, development of the off-grid energy market and obtaining technical support”.
A Future interconnection with Mozambique
A few weeks earlier, the World Bank granted a loan of $57 million to finance a power interconnection project between Mozambique and Malawi. Mozambique will have $42 million and Malawi $15 million. The loan will be used to finance the construction of a 135 kilometre, 220-kilovolt power line linking Matambo (Mozambique) to Phombeya (Malawi). Also in this context, a 220 kilovolt, 75 km-long transmission line and a 220-kilovolt station will be built and installed in Phombeya, Malawi.