The Africa Trade Insurance Agency (ATI) is providing JCM Matswani Solar Corp with US$4.4 million for its 60 MWp Salima solar plant. This is insurance to cover late payments by the operator Electricity Supply Corporation of Malawi (Escom).
The Salima solar PV plant will be commissioned within a month. Its owner JCM Matswani Solar Corp has just obtained a $4.4 million guarantee from the Africa Trade Insurance Agency (ATI), a financial institution set up by seven Common Market for Eastern and Southern Africa (COMESA) countries with the technical and financial support of the World Bank to provide insurance against political and commercial risks.
The funds allocated to JMC Matswani Solar Corp represent a 10-year renewable liquidity guarantee, which can be used in the event of late payment by the state-owned Electricity Supply Corporation of Malawi (Escom). The two companies have a 20-year power purchase agreement (PPA) for the Salima solar project. The future solar photovoltaic power plant is scheduled to be commissioned in August 2021 and will have a capacity of 60 MWp.
Malawi’s largest solar power plant
The ATI is providing the grant under its Regional Liquidity Support Facility (RLSF), which aims to finance projects by independent power producers (IPPs). “The Government of Malawi sees private investment as essential to achieving its objectives in the power sector. This is evidenced by Escom’s recent positive track record in meeting its payment obligations to Malawi’s only operational IPP on time, as indicated by the ATI’s transparency tool. We are confident that Escom’s payments to JCM Matswani will follow the same pattern. In addition to the two transactions we have supported under the FRLC, we look forward to providing similar support to eligible renewable energy IPPs in Malawi and indeed the rest of the African continent,” says Manuel Moses, the ATI’s chief executive officer.
Lire aussi- MALAWI : l’ACA émet 67 M$ de garantie pour la centrale solaire de Nkhotakota (37 MWc)
JMC Matswani Solar Corp, which is being guaranteed by the ACA, is a special purpose company set up to build and operate the Salima Power Station solar plant. The company is owned by Canadian IPP JCM Power (JCM) and InfraCo Africa, an investment company of the Private Infrastructure Development Group (PIDG). The project is also supported by Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO), the Dutch development finance company.
Diversifying Malawi’s electricity mix
The future power plant will allow the state-owned company Escom to diversify its electricity mix with a new annual capacity of 154 GWh. Malawi has an installed capacity of 532 MW, of which 372 MW is generated by hydroelectric power. The share of solar power is expected to increase further in the East African country’s electricity mix with the commissioning of the Golomoti solar power plant also built by JCM and InfraCo Africa.
In Nkhotakota in the centre of the country, responsAbility Renewable Energy Holding (rAREH) and Phanes Group are building a 21 MWp solar PV plant. The electricity produced by this other ATI-backed solar plant will be sold to Escom.
Jean Marie Takouleu
