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Low tariffs hitting Malawi electricity supplier
MALAWI
MALAWI’S electricity provider is “slowly dying” because it is selling power at less than procure- ment cost, a top official has warned.
Electricity Supply Corporation of Malawi (ESCOM) chief executive officer Kamkwamba Kumwenda said the government entity is sup- plying power at about 0.10cents per kilowatt hour (kWh) after buying it at 0.136cents per kWh.
ESCOM, The Daily Times reports, has accumulated a $110mn loss since 2018 due to the mismatch between the tariff and the cost of procuring the feed from sister company, Energy Generation Company, and independent producers.
“If I may say it now, ESCOM is slowly dying. Actually, ESCOM is giving out free electricity. which is not sustainable,” Kumwenda is quoted as saying.
Among other things, he lamented the option by independent producers to charge ESCOM in dollars, which he said is affecting the cost in the wake of the volatility of Malawi’s currency, the Kwacha.
According to Power Africa, a US initiative to boost the continent’s electricity supply, Malawi
hasatotalgeneratingcapacityof532MW.How- ever, increasing demand and failure of generat- ing plants results in ESCOM rationing supplies for, Malawi24 estimates, as prolonged periods as eight hours daily.
Kumwenda said the remedy in the interim remains to adopt an automatic price adjustment system for electricity tariffs to be reflective of periodic changes on the market. ESCOM can- not review the charge before the Malawi Energy Regulatory Authority gets the thumbs up from parliament.
“[If] MPs do not act now, ESCOM might close shop because we are failing to provide some services because we don’t have the cash flow,” Kumwenda added, according to Maravi Express.
“We are failing to effectively provide new connections because we can’t afford to buy new materials; we can’t upgrade our distribution infrastructure. We have lost over 400 transform- ers across the country due to vandalism as well as many other infrastructure materials; we can’t effectively respond to faults because of lack of materials and sometimes fuel — that’s why I can say that ESCOM is slowly dying.”
Week 32 11•August•2022 w w w . N E W S B A S E . c o m P7
