ENERGY SECTOR GOVERNANCE

The energy sector in Malawi is governed by the National Energy Policy of 2018 whose main goal is “To increase access to affordable, reliable, sustainable, efficient and modern energy for every person in the country”.

The formulation of the policy, among other things, took into consideration the changes that had taken place in the structure of the economy and the new national as well as international development agendas for the energy sector such as the Malawi Growth and Development Strategy III, the Sustainable Development Goals (SDGs) and the Sustainable Energy for All (SE4ALL) Initiative.

1.1 Energy Policy Objectives

This Policy has the following broad objectives;

  1. To strengthen the Electricity Supply Industry (ESI) and make it more efficient to
    support industrialization, rural transformation, sustainable economic
    development and wealth creation, as well as regional electricity trading;
  2. To ensure adequate production and supply of petroleum and biofuels at affordable
    prices;
  3. To ensure availability of LPG, biogas and natural gas in sufficient quantities at
    affordable prices for industrial and domestic use;
  4. To promote a coal supply industry that is more efficient and competitive, and
    harnesses clean technologies that eliminate or greatly reduce harmful emissions;
  5. To ensure biomass is sustainably used and carbon emissions are reduced through the
    use of energy efficient technologies;
  6. To establish a vibrant, reliable, incentivized and sustainable private sector-driven
    Renewable Energy Technology (RET) industry; and
  7. To promote energy programming, budgeting and monitoring that routinely address all
    aspects of social and economic development in energy programmes and services.

1.2 Energy Sector Legal Instruments

The National Energy Policy, being an overarching policy in the Malawi Energy sector, has some instruments that create an enabling legal environment for its implementation. These instruments include the following:

1.2.1 Rural Electrification Act (2004)

This act provides for the promotion, funding, management and regulation of rural electrification and for matters connected with it.

1.2.2 Liquid Fuels and Gas Act (2004)

This has provisions for production, blending, extraction, conversion, importation, transformation, transportation, storage, distribution and selling of liquid fuels and gas in a liberalized market and for matters connected therewith or incidental thereto.

1.2.3 Energy Regulation Act (2004)

An Act to establish an Energy Regulatory Authority to regulate the energy sector, to define the functions and powers of the Energy Regulatory Authority, to provide for licensing of energy undertakings, and for matters connected therewith and incidental thereto.

1.2.4 Electricity Act (2004)

An Act to make provisions for the regulation of the generation, transmission, wheeling, distribution, sale, importation and exportation, use and safety of electricity and for matters connected therewith or incidental thereto.

1.2.5 Electricity (Amendment) Act 2016

The Electricity Act (2004) was reviewed and some sections were amended in 2016 to formulate the Electricity (Amendment) Act 2016 which accommodates power-market restructuring processes. With this amendment ESCOM was unbundled into two state owned power utilities: namely the Electricity Generation Company of Malawi Limited (EGENCO) and the Electricity Supply Corporation of Malawi Limited (ESCOM). The Amendment signified liberalization of the generation sector of the electricity industry and allows new entrants/participants in the electricity generation business.