Escom and IPPs are bargaining, says government

Post was last updated: February 2, 2016

The Ministry of Natural Resources, Energy and Mining says the Electricity Supply Corporation of Malawi(ESCOM) and prospective Independent Power Producers (IPPs) are bargaining on tariffs and that there was no stalemate as it has been suggested in the media.

Secretary for Energy Ben Botolo said in an interview that the two parties are taking time to find the best solution on the matter.

“The matter is under serious consideration to benefit the country and power users and everything is under control. This is a bargaining game where they have to negotiate to come to a reasonable tariff,” said Botolo.

He said the Malawi Energy Regulatory Authority (Mera), which is responsible for regulating of tariffs, is also part of the process and that it is currently on top of the game.

“Wider consultations are required on this matter as any decision would have an impact on the electricity users of the country as well as the economy at large,” said Botolo.

“If we make a wrong decision, it is the country that will lose out. So we have to move cautiously. The IPPs are important for the future of the economy but it’s just a matter of time. Once this matter [of tariffs] is resolved, the IPPs will come in,” said Botolo.

Several IPPs are reported to have expressed interest to invest in the country and start supplying power to Escom following liberisation of the country’s electricity supply industry.

Some of the IPPs want to invest in solar energy while others will venture into coal power to help increase Malawi’s electricity production, which currently stands at 351 megawatts against a demand of 360 megawatts.

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