Government, IPPs in forex repatriation talks

Govt & IPPs Forge Path for Forex Repatriation Reform: Implications for Malawi’s Business Landscape

Post was last updated: March 14, 2026

Key Business Points

  • Malawi’s energy sector faces a bottleneck as 21 Independent Power Producers have been licensed but only four have launched operations, delaying much-needed investment and electricity supply.

  • Foreign investors cite foreign exchange scarcity and concerns about converting proceeds into international currency as key reasons for not rolling out their projects, creating urgent work for government and investors.

  • Malawi Stock Exchange-listed Press Corporation plans a 50MW solar plant in Lilongwe this year, signaling limited but notable private sector momentum in renewable energy.

The energy sector is struggling to meet growing demand as concerns over currency and market structures are holding back private investment. Minister of Energy and Mining Jean Mathanga acknowledged on Wednesday that most Independent Power Producers have not launched their projects. Speaking during a visit to the JCM Power Solar Plant in Salima, she linked the stagnation largely to fears around proceeds repatriation in a country grappling with foreign exchange shortages.

Mathanga said the ministry is now actively engaging with these firms to address their specific concerns, particularly for foreign investors who want payment in foreign currency or assurances they can later convert earnings. She stressed that if the delays were due to issues within government’s control, solutions would be found; if not, she expects licensees to explain why they are not progressing. "We need more players into the sector," she added.

Industry data shows 21 firms have been licensed since Electricity Supply Corporation of Malawi was unbundled in 2016 to allow for competition. Yet only four IPPs are currently operational: JCM Power’s two solar plants in Salima and Dedza (80MW combined), a 21MW Serengeti plant in Nkhotakota, an 8.2MW Mulanje Hydro facility, and a small 3.06MW Mulanje Cedar plant. These account for a small fraction of the country’s 554.24MW installed capacity, which is dominated by hydro (390.15MW), solar (110MW) and thermal (53MW).

Many others had planned to start by 2024 but failed to meet that deadline, prompting talk of licence cancellations. The Minister now says the ministry has not yet revoked any rights, but will act against those deemed not serious about implementing projects. About 11 original applicants have now shifted their rollout to 2026 or later.

The Chamber of Mines and Energy confirmed institutional challenges are also blamed. Its national coordinator Grain Malunga pointed to the dissolution of Power Market Limited, which has disrupted the negotiation process and led to hesitation among IPPs. Former Escom CEO Kandi Padambo said some potential investors argue Malawi’s tariffs are too low to make new projects financially attractive.

JCM Power’s Jon Bahen noted the frustration these macroeconomic hurdles cause, but said collaboration with government is the path forward. "There are always challenges in business," he said. Press Corporation, a listed company, has promised a 50MW solar development in Nkhoma, Lilongwe, this year, providing a rare bright spot in what remains a slow-moving market.

Mutharika’s administration has expressed a strong preference for boosting investment through structural reform but warns there is no appetite for permitting idle licences in a sector where power shortages are an ongoing barrier to business growth. Entrepreneurs and other stakeholders are now watching to see whether improved domestic confidence and clearer foreign earnings access will be enough to move the sector beyond its current stalemate.

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Vanessa Banda
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