Government renews gensets deal - The Times Group Malawi

Energy Minister said the government would not renew contract with Aggreko

Post was last updated: October 1, 2020

Energy Minister Newton Kambala has said the government would not renew contract for use of diesel generators with South Africa-based energy company, Aggreko Africa, if the Salima Solar project completes next year.

The project is being done by Independent Power Producer, JCM Power and is expected to complete in May 2021.

Kambala disclosed this, on Thursday, when he was touring Mulanje Hydro Power plant and the Cedar Energy Limited power plant in Mulanje District.

The Salima solar project delayed because of Covid-19 pandemic as engineers were unable to travel to the country but the contractor has resumed work.

Kambala said the government is considering the solar project as possible alternative to the diesel-run generators as a way of cutting costs.

“Aggreko is very expensive for the economy but we cannot afford to lose them because it is either we have expensive power or we have nothing but JCM solar power construction project is at an advanced stage and we may start using the plant in May which may help us not to renew the Aggreko contract,” Kambala said.

JCM solar plant in Salima will be giving the country 30 megawatts while Aggreko is leasing 84 generators with the capacity to 76 megawatts.

Escom tariff impact analysis report of 2017 indicated that the utility body would spend K50 billion for a one year deal with Aggreko.

Kambala further indicated that they are also pushing other IPPs which signed power purchase agreements with government to start implementing the projects or risk termination of the agreements.

“We have already sounded a warning to them that if they do not do anything in the next two months, we have to review the Power Purchase Agreement and look at how we can bring in some serious investors because Malawians cannot keep waiting,” Kambala said.

Malawi has been sailing through electricity woes due to its heavy reliance on hydro power which is seasonal.

In 2017, the Electricity Supply Corporation of Malawi (Escom) leased 84 gensets from Aggreko, which are required to be producing 78 megawatts for six hours each day.

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