文I伊翁·桑杜（Yvonnie Sundu）马拉维《国民报》记者 翻译I邓哲远
Power challenges in Malawi: An opportunity for Chinese investors
By Yvonnie Sundu, Journalist Nation, Malawi
Charles Phiri is into small scale businessin Lilongwe, the capital of Malawi. He runs a barber shop in the congested fleamarket of the city.
On a good day, he rakes in 30 USD while onaverage it’s around 18 USD. The meagre earnings barely afford him life in oneof the shantytowns of the capital, Mchesi.
Phiri’s business just like countlessothers, rely on power which unfortunately, the supply is very erratic. However,while Malawians are used to power outages, the problems reached alarmingproportions in September last year.
Since then to just before Christmas, peoplewould experience 24 hours or more of blackouts, resulting in a knock-on effecton the economy. Some companies especially in the private sector were forced tocut down production to between 40 and 80 percent of their optimal capacity.
As the daily rationing and lengthy outageslasting from a few hours to several weeks, depending on where people livebecame a norm, prices rose sharply. Every day, the country’s three urbancentres of Lilongwe, Blantyre and Mzuzu were buzzing with a familiar sound ofdiesel generators kicking in as the lights flicker and go out.
Phiri was among the highly affected; hisdaily earnings were cut down to less than 10 dollars a day.
“With that, I was taking care of my wifeand two children as well as my mother in villages who has no means of survivalthere. So we had to come here (at the market) everyday hoping to have power tono avail,” he stated in an interview.
That is just a fraction but a criticalaspect of how the power challenges continue to rare an ugly head in thelandlocked country. The already fragile economy require jabs to save it fromchronic moribund state. With the power challenges, the consequences on theeconomy are more than devastating.
The Electricity Supply Corporation ofMalawi, (ESCOM) is the sole electricity company in the country providing energyto Malawians with assistance from its sister company, Electricity GenerationCompany (EGENCO).
Firms with machineries were pushed to spendmore than their budgets in order to keep operations afloat with the support ofgenerators. In economic terms, the reduced production meant a fall in productsfor sale, which translates into a decrease in turnover.
During that period, bigger companies likeNampak Malawi Limited, manufacturers of paper and board packaging, struggledwith production costs due to prolonged power outages.
The company bought a 400 kva[kilovolt-ampere] capacity generator, but it is against the demand which hoversat around 600 kva. About 1 000 litres of diesel per day were being bought topower this generator, according to local media reports then.
But what led to a record low electricityproduction in the history of the southern African nation of 17 million? Thecountry has been experiencing a power generation reduction of around 200megawatts (MW) from the installed generation capacity of 351 MW and peak demandof 350 MW. The power outages gone worse due to persistent low water levels inthe Shire River and Lake Malawi, where the power utility provider generates 90percent of its power.
Again, the power companies cannot keep upwith soaring demand from a fast growing population and fuel-hungry companiesneeding electricity for computers and manufacturing.
Malawi continues to face a widening gapbetween electricity demand and supply, which is being exacerbated byurbanisation, economic development and population growth. Grid coverage isgrowing slowly but demand is doubling every 10 years or so.
On top of that, there are problems likeinsufficient power generation capacity, high transmission and distributioncosts, lack of investment in new power generation units and the list goes on.
The blackouts have sadly led to a viciouscircle; no electricity has resulted in widespread environmental degradation.According to the UN development program, nearly 75% of Malawian householdsdepend on charcoal and wood burning for cooking, and coal and fossil fuelimports have grown, it says.
Charcoal production is now big business,with people carrying it many miles to sell in cities. Aside from the indoorhealth impact of burning charcoal or wood to cook, deforestation also leads tosoil erosion, which, silts up the rivers and blocks the hydroelectricityplants.
ESCOM has over the years been undertakinginterventions to improve the chronic situation. They include use of energysaver bulbs, load shifting for industries, cross border power connections andinstallation and commissioning of diesel generators.
Meanwhile, with support from Germany,Malawi recently signed an electricity interconnector with neighbours,Mozambique. The agreement will see the German Development Bank (KfW) providinga grant for the Malawi part of the electricity deal.
KfW will provide 20 million euros grant thefunding of the power interconnector which when completed, will enable thecountry import electricity from Mozambique and South Africa.
In 2009, a similar deal was rejected by thelate Bingu Wa Mutharika administration reportedly due to high initial costswhich outweighed the benefits as it would require Malawi to pay 480, 000 USDmonthly to tap power from Mozambique.
Again, the two sister companies havejointly been installing heavy duty diesel generators. EGENCO has maintainedthat the massive blackouts will only reduce once the generators have beeninstalled in selected districts across the country.
According to EGENCO Public RelationsOfficer, Moses Gwaza, the generators are expected to generate over 90 Megawattsof power, which would be used to substitute the hydropower during electricitypeak hours for about six hours a day.
“This is a short term plan as such it meetsthe existing immediate needs. In the areas where installation is done,blackouts have reduced. We are also hopeful that if we have more rainfall, thehydropower will start working better as the water levels will rise.
“We have so far installed 3 generators inMzuzu, (the northern city) each producing 2 megawatts therefore totaling 6Megawatts. We are expecting to add 36 megawatts in total after all thegenerators have been installed. We will be installing 10 megawatts in Lilongweby mid-March and 20 megawatts at Mapanga in Blantyre by end of April,” heexplained.
Malawi needs 5500px3 of water per second forthe hydropower plants to operate effectively but the problem of dwindling waterlevels in both Lake Malawi and Shire River have been compounded by the effectsof environmental degradation.
While the situation has improved to atleast 8 hours of power cuts a day, the situation is still precarious. A lotneeds to be done and immediately as the few investors might close shop whilepotential ones, might look elsewhere.
The World Bank calculates that electricityrationing loses Malawi up to 7 percent of its GDP a year. This is more than anyother country in Africa, where in comparison, Kenya, Niger, Madagascar and Beninall lose under percent.
At a recent commissioning of generators inthe southern Malawi city of Blantyre, President Peter Mutharika this part ofthe drive by the government to finding an immediate solution for reducing powershortage which the whole nation has been eagerly waiting.
“Today, we are commissioning 55 megawattsadded to the national grid. The first 35 megawatts is installed here inBlantyre while 20 megawatts is already installed in Lilongwe. We are expecting23 more megawatts to be installed at Chinyama in Kasungu.
“These generators do not solve all thepower problems we have been experiencing for many years. Our plan is to do awaywith power shortage problems forever. I want us to say farewell to blackoutsforever. Therefore, we have set in motion long term plans to eradicate theenergy problem permanently. Once we have enough power supply, then we can movewith full speed into large scale manufacturing, mining and commercialirrigation. This dream is possible now more than ever before,” he stated.
Some quarters of society have spokenagainst the idea of buying heavy duty diesel generators saying it is a costlyventure in terms of buying, transporting too Malawi, running and servicing toan already riddle economy.
But Mutharika is optimistic that thechronic power shortages to come to an end and buying generators was a necessaryevil hailing the move as a step in the right direction.
“Within five years, we will be generatingover 1400 megawatts of coal fired power; about 700 megawatts of hydropower; and70 megawatts of solar energy,” he explained.
Soon, Malawi will join a bandwagon of leastdeveloped countries especially from Africa which are adopting other sources ofenergy, particularly, coal.
The country’s embrace of coal is as aresult of its acute shortage of power. About only 11 percent of the entirepopulation live without electricity. As such, even cities, lack the gridcapacity to drive the expansion of job-creating industries.
Yet across the globe, coal-fired plants,which generate 41 percent of the world’s electricity today, remain attractivebecause coal is relatively cheap and their operation is not highly subjected tothe whims of nature—unlike solar, wind, or hydro.
Malawi is preparing to erect a $667 millioncoal power plant, the first of its kind in the country. China’s Export andImport (Exim) Bank is to pump a whopping into Kam’mwamba Coal-Fired Power PlantProject. The plant is intended to add 300 megawatts of capacity to Malawi’snational grid, increasing the country’s power capacity to 651 Megawatts.
“May be coal will give us some breathingspace,” said Phiri when asked for a comment.
The government is to make available anadditional $104 million to the project as commitment fee.
An official at the Chinese embassy in Lilongwesaid once the paperwork is done the construction of the coal power plant willstart.
Malawi has an ambitious plan of having morecoal-fired power plants in strategic sites in the near future and expand thenational grid to 1000 megawatts.
Within Malawi’s power problems, there liesinvestment opportunities for international companies like those owned by theChinese. Massive investment is needed if the country is to generate electricityand meet it’s development goals. Otherwise, Malawi will continue to experiencepower cuts unless the country receives above normal rainfall for fiveconsecutive years.