Bank bemoans Malawi's tardiness on cross-border transmission project

The World Bank, the lead financier for the $110-million Mozambique–Malawi power interconnector project, has expressed concern over the Malawi government's delay in finalising financing arrangements for the project.

The World Bank's board of directors last year approved funding for the project in the form of loans to both Malawi and Mozambique.

However, Malawi's Parliament has yet to approve a loan Bill for the project in order for the Bretton Woods institution to start releasing the funds. The delay has been caused by political differences between government and opposition MPs in Parliament over an antidefection law.

President Bingu wa Mutharika, whose party would lose more members of Parliament if the antidefection law sailed through, is yet to call for another session of Parliament this year despite mounting pressure from the opposition and civil society.

"Though there is no strict limit on the bank's side within which a project has to be signed off after board approval, these delays are of concern because, if loan documents are not signed within 18 months, internally, the bank has to initiate special procedures to justify why the project should not be withdrawn," says World Bank country manager for Malawi Timothy Gilbo.

Gilbo says the delays "would also make it more difficult for Malawi to benefit from inclusion in other regional projects".

The Mozambique–Malawi power interconnector project is part of the Southern Africa power market project of the Southern Africa Power Pool (SAPP).

Implementation of the project will allow Malawi to become an operating member of SAPP by being connected to the regional power grid.

"The bank's concern is that Malawi needs energy for economic development. When the country gets connected to the SAPP network, it is expected that there would be increased access to reliable and affordable supplies of energy," says Gilbo.

"The interconnector will help Malawi to balance its power needs throughout the day as it grows and reduces the need for expensive backup generators," says Gilbo.

Gilbo says the World Bank is also prepared to finance new power generation projects in Malawi in coming years, which would see the Southern African country with surplus power, which it could sell to its neighbours.

"Malawi definitely needs an interconnector to sell this power," he says.

Malawi's leader of government business in Parliament, Henry Chimunthu Banda, says government understands the importance of the interconnector project and will ensure that the Bill is debated in the next Parliamentary session.

The other project that has been affected by the failure by Malawi Parliament to convene is the Urban Water Supply Project, which is financed by a pool of donors, including the World Bank and the European Union, as part of the multimillion-dollar national water development programme.

When the President ordered the closure of the last Parliamentary session, a Bill authorising government to obtain a grant and a loan from the European Development Bank for the water project, which was due to be tabled.

The project is, besides other things, meant to overcome critical water shortages in the major cities of Blantyre and Lilongwe, where water-borne diseases, such as cholera, are common, especially in slums.