The Government of Malawi approved the implementation of the Malawi-Mozambique Regional interconnector Project in mid-2019.The objective of the Project is to interconnect Malawi and Mozambique’s electricity transmission system to enable the two countries to engage in bilateral and regional power trade in the Southern Africa Power Pool (SAPP). It is envisaged that once the generation capacity in Malawi surpass the local demand, in recent future, Malawi will participate in power trading with the rest of the members of SAPP through this interconnector.

 

The total estimated cost for the project is US$ 88 million. The Government of Malawi has secured financing for the project through a loan from World Bank-International Development Association (IDA) amounting to SDR 11 million (Equivalent to US$ 15 million), a grant from IDA amounting to US$ 42 million, a Government counterpart funding amounting to US$ 7 million and a grant from a single Donor Trust Fund for Norway amounting to US$ 24 million.

 

The feasibility studies for the Malawi-Mozambique interconnector have been completed. Procurement of the EPC (engineering, procurement and construction) Contractor is the next step. The scope of the Project is to interconnect the Mozambique and Malawi Power Systems at 400kilovolts(kV) through a 76 km transmission line to be constructed from Matambo Substation in Tete Province in Mozambique to Phombeya Substation in Balaka District in Malawi. Interconnecting the Malawi and Mozambique power systems entails Malawi’s connection to the Southern Africa Power Pool (SAPP) since Mozambique is already connected to SAPP. Malawi intends to initially import 50MW of power from Mozambique.

 

In April, 2019, ESCOM Limited and EDM, a utility company in Mozambique, signed five (5) important agreements under the Project, which is a milestone, and these Agreements are:

 

  1. Project Implementation Agreement,
  2. System Operating Agreement,
  3. System Maintenance Agreement,
  4. Wheeling Agreement, and
  5. Power Purchase Agreement.

 

The World Bank Board approved the project in September 2019 while the Malawi Parliament passed a loan authorization bill for the project in October 2019. The loan agreement for the project has been signed by both Government and World Bank.