World Bank part of Malawi–Moz interconnector engagement

The World Bank, the lead financier of the $84-mil- lion Mozambique–Malawi electricity interconnector project, is engaged in a series of discussions with stakeholders in Mozambique and Malawi in order to kick-start the long-awaited project.

The interconnector project will involve the construction of a 200-km, 220-kV power line from the Matambo substation, in Mozambique, to Phalula, north of Malawi’s commercial capital, Blantyre.

Augusto de Souza Fernando, the director of power production and transport at Mozambican electricity utility EdM, says a World Bank team has visited Mozambique to discuss the implementation of the project with various stakeholders.

“This is a project which is 100% owned by EdM, [but] in implementation, there will be some coordination with Cahora Bassa Hydroelectric (HCB), which owns the Matambo substation. “The arrangement is that HCB will operate the line, as is the case with the line to Zimbabwe,” says Fernando.

He says the stakeholders have agreed that there will be initial financing of $60-million for the project, of which about $25-million will be invested on the Mozambican side.

The Swedish Agency for International Development and the Norwegian International Development Agency have joined the World Bank as financiers of the project.

Electricity Supply Corporation of Malawi (Escom) CEO Kandi Padambo says the parastatal expects to seal a power-purchase agreement with HCB before the end of the year.

“So far, there are no obstacles in our discussions with HCB, the supplier, and the World Bank as the lead financier. We just have to finalise some processes,” says Padambo.

The discussions between Escom and HCB hit a snag a year ago because Escom was discouraged by the high price demanded by HCB.

As Escom was considering engaging into discussion with another supplier from the southern Africa region, HCB revised the price downwards forcing Escom to rescind its decision and continue with the arrangements to purchase power from the Mozambican firm.

The Mozambique–Malawi power interconnector is part of the Southern African Power Market project that is being implemented under the auspices of the Southern Africa Power Pool.