By Penelope Paliani-Kamanga
Lilongwe - The World Bank has given Malawi and Mozambique U$57 million for the two countries regional interconnector project, a gesture expected to improve access to reliable electricity for Malawians.
Out of the total amount, Malawi will get $15 million (about K11 billion).
The project will connect the Mozambique and Malawi electricity transmission systems to enable both countries to engage in bilateral and regional power trade on the Southern African Power Pool (SAPP).
Its main undertakings include the construction of a 218km, 400 kV high voltage alternating current transmission line, grid connections and associated infrastructure, including substation works.
The line will start from Matambo substation in Tete province, central Mozambique, and end at Phombeya substation in Balaka district in southern Malawi.
“This is an important project for the region. It will create conditions to expand access to millions of people in the region living without electricity, and help decarbonise the Southern African power systems, which are currently dominated by coal generation,” said Deborah Wetzel, the World Bank director for regional integration for Africa, the Middle East and Northern Africa.
She said with these investments, Malawian households, businesses, and farmers will benefit from increased access to reliable electricity services that are vital to improve the country’s productivity and competitiveness in the domestic and regional markets.
SAPP is the first and the most advanced power pool in the continent providing an alternative to domestic electricity generation to improve energy security. This project will fund Malawi’s first interconnection to the SAPP, which has been a priority since the early 2000s with several attempts to translate to reality.
“The project seeks to address Malawi’s sectoral challenges, including chronic electricity supply deficits and ensures security of supply as well as reliability and affordability of electricity through imports from Mozambique and, in the future, other SAPP members,” said Bella Bird, World Bank country director for Tanzania, Malawi, Zambia and Zimbabwe.
The project will also reduce the potential for a power crisis based on droughts affecting the Shire River and address the need for back-up in the form of diversified external sources of power.
In addition to construction of a transmission line and related infrastructure, the project will support capacity building of the electricity utilities of both countries.
Two months ago the Mozambican government through, Electricidade de Moçambique (EDM) formalised an agreement with the German Development Bank (KFW) to finance the Mozambique-Malawi interconnection project.
German Financial Cooperation, through KfW, is supporting EDM in the installation of a new 400kV substation in Matambo and the construction of a 400kV 142km transmission line to link the Matambo substation with the Malawi part.
Mozambique’s share of the credit is $45 million and involves the installation of a 135-km, 220 kilovolt power line from the Matambo substation to Phombeya in Malawi.
On the Malawi side, about 75 km of 220 kilovolt transmission line will be built and a new 220 kilovolt substation installed at Phombeya.
This will ensure much-needed diversification in Malawi’s electricity supply and allow the export of any off-peak power surpluses. It will also provide Mozambique’s energy sector with a new revenue source,
The corresponding Energy Purchase Agreement and the other technical-commercial agreements between EDM and the Malawi electricity utility (ESCOM) were signed last April in Blantyre.
The total cost of the Mozambican part of the interconnection programme amounts to $100 million.
The project is of strategic importance to Mozambique as it contributes to greater diversification of energy transactions.
Mozambique’s Minister of Mineral Resources and Energy, Max Tonela, said the agreement creates the necessary conditions for Malawi to become an operational member of SAPP.
“Mozambique is rich in conventional and renewable sources of energy and presents itself as a regional energy hub, so the interconnection between Mozambique and Malawi provides access to the regional market, enabling large energy projects in Mozambique to become viable,” he said.
“Malawi will thus be able to participate equally with all other member states in regional electricity trade, including importation and exportation to the regional market. In fact, it is another important step towards regional integration in the context of the Southern African Development Community,” said Tonela.
German Ambassador to Mozambique, Detlev Wolter, said: “Reliable transmission and cross-border marketing of electricity is in the interest of all SAPP member countries. It will contribute to better conditions for households and businesses. In so doing, it will promote the economic development of the entire Southern African region.”
The financing programme will also support EDM in the acquisition and installation of OPGW on the new transmission line, as well as two other existing transmission lines (832 km long).
These measures contribute to the automated monitoring and management of the electricity grid, as well as to the improvement of telecommunications services.
Like elsewhere in Africa, both countries have been plagued by chronic electricity shortages and the project is another step in the development of a Southern African power grid.
The Southern African region has struggled with energy shortages that threaten to affect industrial growth in a region that has some of Africa’s fastest growing economies.
Power utilities throughout the region are struggling to cope with increasingly frequent blackouts hampering operations at businesses and homes.