Malawi Electricity Access Project

The Malawi electricity access project (MEAP), financed by the World Bank to the tune of US$150 million, is a 5-Year project that was launched in January 2020 with an objective of supporting the Government of Malawi to increase access to electricity in the country. The Project is implemented by the Ministry of Energy and the Electricity Supply Corporation of Malawi (ESCOM) Ltd. The Project has three components with both implementing institution sharing one component and implementing one other component separately.

Component 1 – Grid electrification:  

This component finances cost-effective, priority investments in grid electrification by providing electricity to households living close to existing distribution infrastructure (transformer connection range) leveraging on the geospatial analysis to maximize the number and minimise the cost per connection. Specifically, the component is financing low voltage (LV) extensions, uprating of distribution transformers, service drops, and pre-payment meters. Some of the new connections may also require reinforcing the upstream network to ensure the quality and reliability of the power supply. The project is also supporting the elimination of connection barriers due to unaffordable internal house wiring costs by providing ready boards to low-income households that cannot afford internal house wiring costs.

ESCOM has rolled out the MEAP-SESA initiative under this project whose aim is to add 180,000 new connections by the end of the project implementation period. This will include clearing of ESCOM’s backlog which currently close to 70,000.

Component 2 – Off-grid market development fund: 

This component aims to bridge the financing gap faced by solar companies operating in Malawi and is hence addressing the challenges to developing the Off-Grid Solar (“OGS”) market. The Ministry has established the OGS Market Development Fund named Ngwee Ngwee Ngwee Fund (NNNF) to provide financing through three windows – a working capital window, a results-based financing window and technical assistance to solar companies. Through the Fund, OGS companies will install solar home systems in 200,000 households. The component is also providing financing to undertake feasibility studies for ten (10) mini-grid sites at Macheka in Nsanje, Ngatala in Mangochi, Nakaona and Nzoola in Dedza, Kaudzu and Jonasi in Dowa, Mtsiliza in Mchinji, Chinguma and Ngotakota in Zomba, Jumbi in Rumphi, and Masewe in Nkhotakota..

Component 3 – Technical Assistance:

This component is financing various technical assistance and capacity building activities to ensure ESCOM, Ministry of Energy and other sector stakeholders have adequate technical, planning, and operational capacity to implement the electrification roll-out activities under the Project.

The following are TA efforts which have been undertaken to facilitate the detailed design and implementation framework of the MEAP:

  1. High level geospatial least-cost electrification program plan: The objective of this TA was to undertake a GIS mapping of population settlement patterns to understand their proximity to existing medium voltage (MV) grid infrastructure and to develop first-order estimates of the capex requirements for connecting these settlements to the grid. In addition, the study also identified off-grid / mini-grid sites where the grid is unlikely to reach in the near term.  The study found that most of Malawi’s population lives close to an existing network and that grid extension is probably the most effective option for achieving universal access.
  2. Power Adequacy Analysis: The aim of this TA was to ensure that the network can provide power for the new connections. These include amongst others a new interconnection with Mozambique, solar IPPs, and new generation plant.
  3. Feeder level techno-economic plan: The objective of this TA was to carry out a feeder level techno-economic plan for implementing 180,000 connections over the first two years of ESCOM’s four-year corporate plan to connect 90,000 connections per year. The primary input into this analysis was the First Order Geospatial Plan. The aim was to use this information to estimate the impact of the potential connections on the network and provide preliminary estimates of material requirements.  The study found that the bulk of the material requirements are associated with extending the existing LV network to reach new customers.

This component finances cost-effective, priority investments in grid electrification by providing electricity to households living close to existing distribution infrastructure (transformer connection range) leveraging on the geospatial analysis to maximize the number and minimise the cost per connection. Specifically, the component is financing low voltage (LV) extensions, uprating of distribution transformers, service drops, and pre-payment meters. Some of the new connections may also require reinforcing the upstream network to ensure the quality and reliability of the power supply. The project is also supporting the elimination of connection barriers due to unaffordable internal house wiring costs by providing ready boards to low-income households that cannot afford internal house wiring costs.

ESCOM has rolled out the MEAP-SESA initiative under this project whose aim is to add 180,000 new connections by the end of the project implementation period. This will include clearing of ESCOM’s backlog which currently close to 70,000.

This component aims to bridge the financing gap faced by solar companies operating in Malawi and is hence addressing the challenges to developing the Off-Grid Solar (“OGS”) market. The Ministry has established the OGS Market Development Fund named Ngwee Ngwee Ngwee Fund (NNNF) to provide financing through three windows – a working capital window, a results-based financing window and technical assistance to solar companies. Through the Fund, OGS companies will install solar home systems in 200,000 households. The component is also providing financing to undertake feasibility studies for ten (10) mini-grid sites at Macheka in Nsanje, Ngatala in Mangochi, Nakaona and Nzoola in Dedza, Kaudzu and Jonasi in Dowa, Mtsiliza in Mchinji, Chinguma and Ngotakota in Zomba, Jumbi in Rumphi, and Masewe in Nkhotakota..

This component is financing various technical assistance and capacity building activities to ensure ESCOM, Ministry of Energy and other sector stakeholders have adequate technical, planning, and operational capacity to implement the electrification roll-out activities under the Project.

The following are TA efforts which have been undertaken to facilitate the detailed design and implementation framework of the MEAP:

  1. High level geospatial least-cost electrification program plan: The objective of this TA was to undertake a GIS mapping of population settlement patterns to understand their proximity to existing medium voltage (MV) grid infrastructure and to develop first-order estimates of the capex requirements for connecting these settlements to the grid. In addition, the study also identified off-grid / mini-grid sites where the grid is unlikely to reach in the near term.  The study found that most of Malawi’s population lives close to an existing network and that grid extension is probably the most effective option for achieving universal access.
  2. Power Adequacy Analysis: The aim of this TA was to ensure that the network can provide power for the new connections. These include amongst others a new interconnection with Mozambique, solar IPPs, and new generation plant.
  3. Feeder level techno-economic plan: The objective of this TA was to carry out a feeder level techno-economic plan for implementing 180,000 connections over the first two years of ESCOM’s four-year corporate plan to connect 90,000 connections per year. The primary input into this analysis was the First Order Geospatial Plan. The aim was to use this information to estimate the impact of the potential connections on the network and provide preliminary estimates of material requirements.  The study found that the bulk of the material requirements are associated with extending the existing LV network to reach new customers.

Project Management

This is the highest decision making body for the project and its Chaired by the Secretary for Energy. Members of the Committee include Secretary to Treasury, Principal Secretaries for Economic Planning and Development, Local Government, Lands, Gender and Natural Resources and Chief Executive Officers for Malawi Energy Regulatory Authority (MERA) and EsCOM Ltd. The Commitee meets quarterly to review progress, provide policy guidance and resolve any high-level challenges facing the project.

This is a technical advisory comittee of the project. The Committee is chaired by the Director of Energy. Members of the Committee include Direcoctors from Ministries of Finance, Economic Planning and Development, Local Government, Lands, Gender and Malawi Energy Regulatory Authority (MERA) and ESCOM Ltd. The Commitee meets quarterly to review progress, provide policy guidance and resolve technical challenges facing the project.

The Project has two PIUs, one for the Ministry and the other for ESCOM. The Ministry’s PIU is headed by the Project Coordinator and a Deputy Project Coordinator. It consists of various technical officers drawn from the Ministry and specialists in the areas of Procurement, Financial Management, Monitoring and Evaluation, Social Safeguards and Communications. The PIU is responsible for day-to-day operations of the project and preparing progress reports for the PTC and PSC. Both PIUs meet monthly to plan and review project activities.

PROJECT PROGRESS

Consultancy Services for Fund Manager for Results-Based Financing (RBF) Grant Window and Debt Window

  • The Ministry successfully engaged a consultant, IDCOL from Bangladesh as the Fund Manager. The consultant successfully designed the Off-Grid Market Development Fund which was named Ngwee Ngwee Ngwee Fund (NNNF) and was launched in March 2023. The Fund will cover the cost of procuring, importing, distribution, selling and provision of after sales services of Solar Home Systems in the off-grid areas of 27 districts of Malawi except Likoma and the four cities (Bantyre, Lilongwe, Zomba and Mzuzu).
  • The Ministry through the Fund Manager advertised a request for Expression of Interests (EOIs) for Participating Organisations on 22nd November 2022. Twenty-two (22) proposals were received out of which, nine (9) companies were shortlisted and Detailed Bossiness Plans were requested from them on 24th January 2023 but only seven (7) submitted their business plans. After detailed evaluation of the business plans which included due diligence, five (5) Solar Companies were selected as Participating Organizations to benefit from the loan and result based financing grants from Ngwee Ngwee Ngwee Fund. These companies are:
      1. Vitalite Group Limited;
      2. Zuwa Energy (Pty) Limited;
      3. Perennial Holdings Limited;
      4. StarTimes Media (MW) Limited; and
      5. Green Impact Technologies Limited.
  • The Project is in the process of procuring a Legal Advisor to assist the Fund and GoM review and draft legal documents (including loan agreements, security documents and grant agreements) for the two financing instruments housed in the NNNF. The advisor is expected have commenced the assignment by 30th of April 2023 prior to actual loan disbursement to companies which is expected to commence in May 2023.
  • Request for Proposals for the Market Catalyst Fund was issued on 23rd March 2023 and proposals are exacted by 4th of May 2023.

Consulting Services to carry out Feasibility Studies and Design Optimization of Mini-grid Systems

  • The Ministry engaged a consultant, Norconsult from Norway to carry out feasibility studies including preliminary designs for 10 mini-grids sites prioritizing agricultural loads, schools, health facilities and enterprises in peri-urban and rural areas.
  • The consultant has submitted draft electricity demand assessment reports and draft feasibility studies for the selected sites.
  • Final deliverables from this assignment are expected in May 2023 when the contract will be closing.

Consulting Services to carry out Consumer Awareness Campaign On Off-Grid Systems

  • The Ministry engaged Malawi Broadcasting Corporation (MBC) as a consultant to carry out a consumer awareness campaign for the off-grid market development components. The consultant has started conducting stakeholder meetings and engagements in project impact districts.

Consultancy Services for Verification of Activities of Off-grid System Market Development Component

  • The Ministry has identified LAPE Consultants as third-party verifiers of proper implementation of the Financing Facility under component 2 of the Project. The objective of the Independent Verification Agent (IVA) is to verify that recipients of the Results Based Financing are complying with the stipulated uses of funds and the number of people reached through activities under component 2, through desk, telephone and field surveys.

Consulting Services to Carry out Quality Assurance on Off-Grid Systems

  • The Ministry, through World Bank, engaged CLASP, an international consultant to undertake this assignment to ensure that all products are compliant with Verasol standards.
  • Malawi Bureau of Standards (MBS) was supported to adopt Verasol Solar Home Systems Standards of up to 300Watts Peak. MBS board approved adoption of the standards in February/January 2023.

Review of National Energy Policy of 2018

  • The Ministry is working towards reviewing of the National Energy Policy 0f 2018 under the Technical Assistance component of this Project. Draft Terms of Reference have been prepared to procure a consultant to carry out this exercise.

Energy Related Studies

  • The Ministry engaged National Statistics Office (NSO) to undertake the Multi-tier Energy Access Survey using the Global Tracking Framework using a combination of funds from MEAP and ACRE Project
  • World Bank ESMAP provided training to NSO on the MFT Survey
  • Data Collection tools were finalised and approved by the Ministry
  • Enumerators training and pilot survey were conducted in February 2023
  • Field work will commence soon for data collection.

Increasing Access to Clean and Decentralized Energy Services

The Ministry of Energy, with financial support from GEF Trust through United Nations Development Program (UNDP), concluded implementation of the Increasing Access to Clean and Affordable Decentralised Energy Services in selected vulnerable areas in Malawi (IACADES) Project on 31st December 2019. The project became effective in August 2015 through an Inception Meeting of Parties where the Letters of Agreement and the project document was duly signed by the Ministry of Energy and UNDP.

The Increasing Access to Clean and Affordable Decentralised Energy Services in Selected Vulnerable Areas of Malawi project was aimed at establishing mini-grids as a priority option in Malawi’s rural electrification efforts. The project’s goal was ‘ to increase access to energy in selected remote, rural areas in Malawi by promoting innovative, community-based mini-grid applications in cooperation with the private sector and civil society’. The project had three Components as follows:

Component 1 – Expansion of the Mulanje Electricity Generation Agency (MEGA) Micro Hydro Power Plant (MHPP) and mini-grid scheme: This Component directly supported the implementation of a second 80 kWp micro-hydro powered mini-grid operated by MEGA at Namainja (the Lujeri Micro-hydro power plant – MHPP) and provided institutional support for the development of several other MEGA MHPPs  to bring the installed capacity of their power production up to 220 kWp.  This Component also supported the institutional capacity of MEGA to help establish it as a self-sustaining entity.

MEGA is one of the institutions operating a mini-grid in Malawi situated in Mulanje at Bondo area. It started its operations in 2011 with 60 kW hydro power plant by the community with assistance from Practical Action. Currently it has 3 power plants, two with 60 MW and one with 100 kW, making the grid to have 220 kW. With this power it has managed to power 10 villages and it plans to power 8 more villages.

The Ministry of Energy through Increasing Access to Clean and Affordable Decentralized Energy Services project with funding from UNDP and GEF; and the Scottish Government have been providing support to the scheme. The support has been going to grid extension, implementation of the 100-kW power plant and capacity building. With the support from MOE and the Scottish Government MEGA has managed to power 1800 households, 3 schools, 24 teacher houses, planted 200,756 trees, provided loans to 40 businesses, trained 18 extension workers and 886 farmers in the area.

MEGA was the first Mini grid to be operated by a non-public entity. More information can be found on www.mega.mw

(insert additional MEGA information here)

Component 2 – Replication of MEGA model via piloting of new mini-grid schemes in other areas of Malawi: This Component initiated an open competitive-based mechanism (Request for Proposals – RfP) to select and support the establishment of Public-Private-Partnership (PPP) service delivery platforms for clean energy mini-grids with an emphasis on business models such as Build-Own-Operate (BOO). It is envisaged that Clean Energy Mini-grids with an installed capacity of at least 84 kWp will be supported.  this component supported the Construction of Sitolo mini-grid in Mchinji;Rehabilitation of Chipopoma mini-grid in Rumphi; and feasibility studies for Usingini and Kavuzi mini-grids in Nkhatabay.

(insert additional mini-grid here (Sitolo, Kavuzi, Usingini, Chipopoma)

Component 3 – Institutional strengthening and capacity building for promotion of decentralized mini-grid applications across the country: This Component carried out  a number of trainings and capacity building activities at sub-national and national levels on Clean Energy Mini-grids and established a national information clearing house to facilitate mini-grid based rural electrification. The Component also contributed to policy and regulatory changes to mainstream Clean Energy Mini-grids into rural electrification activities and  synthesized and show-cased the lessons from the clean energy mini-grid based rural electrification experience in Malawi to develop a Toolkit for policy makers.

The project was implemented over a period of 6 years  by the Department of Energy Affairs under a National Implementation Mechanism. The project established the foundations for replication of several clean energy mini-grids in Malawi, thereby accelerating efforts to provide universal electricity access to Malawi’s rural population.

Project Achievements

(Insert mini-grids info here)

This component will finance cost-effective, priority investments in grid electrification by providing households living in close proximity to an existing distribution infrastructure leveraging on the geospatial analysis to maximize the number of connections per provided financing. Specifically, the component will finance low voltage (LV) extensions, service drops, and prepayment meters. Some of the new connections may also require reinforcing hardware elements of the supplying MV feeder for ensuring quality and reliability of supply for new connections. The project will also support the elimination of connection barriers due to unaffordable internal wiring costs by providing ready boards to the low-income households that cannot afford internal wiring costs

The component will bridge the financing gap faced by solar companies operating in Malawi and hence address the challenges to developing the Off-grid solutions market. Finance will be required for (i) importers to increase stock and buy down the cost of the system through larger volumes; and (ii) distributors for working capital that currently is locked to provide PAYGO, the most accessible end-use financing. This component will set up a financing facility managed by a qualified fund manager that will provide access to loans and grants to eligible enterprises offering quality assured solar off-grid systems. Solar companies will use funds to finance stock, develop business models and build the distribution channels to reach consumers.

This component will finance various technical assistance (TA) and capacity building activities to ensure ESCOM, MoNREM and other sector stakeholders have adequate technical, planning, and operational capacity to implement the electrification roll-out activities.

Malawi Rural Electrification Programme

The Malawi Rural Electrifiction Programme (MAREP) which is conducted in phases since 1980 has been addressing the electricity infrastructure imbalances for rural areas. The programme extends the electricity grid to rural dwellers who pay a subsidized fee to connect electricity to their business premises and dwelling units. Available data from phase 4 to phase 8 show that there are more than 1000 sites which have benefited across the country. Data for phases 1 and 2 is not readily available. During phase 3, there was neither extension of the grid to the sites nor development of stand-alone-systems as this phase was dedicated to the development of Wovwe hydro power plant which generates 4.5 MW to date. Phase 8 Extended is being implemented at the moment and it is going in parallel with planning of implementation of Phase 9.

These strides are in line with government’s policy which advocates for an increase in electrification rate from the current 11% to 30% by year 2030.

Objective of MAREP 

The objective of MAREP is to increase access to electricity for people in peri-urban and rural areas as part of Government’s effort to reduce poverty, transform rural economies, improve productivity and improve the quality of social services.

Institutional Arrangement

The Rural Electrification Act, 2004, established the Rural Electrification Management Committee (REMAC) which is the Board mandated to manage the affairs of the rural electrification activities in the country. Following is the composition of the REMAC:

  1. Secretary for Ministry of Energy – Chairperson
  2. Secretary to Treasury – Member
  3. Secretary for Local Government and Rural Development – Member
  4. Chief Executive Officer for Malawi – Member
  5. Representative of Malawi Board of Engineers – Member
  6. Representative of Institute of Chartered Accountants in Malawi – Member
  7. Director for Energy Affairs – Member

The Rural Electrification Unit within the Department of Energy Affairs is the secretariat to the REMAC.

Implementation of MAREP

Following the National Energy Policy revision in 2018, a number of structures have been put in place to ensure that rural electrification activities are at the forefront of spearheading economic and social services transformation not only for rural and peri-urban communities but the country at large since its impacts go a long way in improving living standards of most Malawians.

Procedure of Selection Of Sites In The Master Plan

All sites proposed for electrification are contained in the MAREP Master Plan. Sites which are at a distance of more than 10km from the existing grid do not qualify for electrification in the current phase on grid extension hence, they’re recommended for mini-grid electrification.

The Master Plan has a lifespan of five years before it can be updated, albeit taking into consideration the depletion of sites in a particular district in which case updating can be done after two years. According to the Rural Electrification Act (2004), approval of the MAREP Master Plan is done by the Rural Electrification Management Committee (REMAC) which is the MAREP Board tasked to oversee and guide the implementation of MAREP.

The number of sites to be electrified in each phase depends on the availability of funds to meet all necessary obligations, for instance, procurement of construction materials, payment of contractors who construct the power lines and wayleave compensation. MAREP is funded locally by the Government of Malawi through levies on energy sales.

Ndawala Initiative

Ndawala Initiative is an intervention aimed at accelerating electrification in MAREP sites through the provision of incentives such as wiring of customer installations and service connection on pilot basis. The implementation of Ndawala started in May 2019 across the country. Selected beneficiaries enter into a soft loan agreement with no interest charged. Repayment of the loan is through purchase of electricity units where 40% of the purchase is deducted.

Identification of beneficiaries and Ndawala Soft Loan

The beneficiaries have been identified and registered in MAREP sites by ESCOM Customer Service teams. During the registration, customers completed new service application forms and Ndawala loan agreement forms. Customers are also made to pay K5,000.00 as an initial advance payment towards the Ndawala loan of K55,000 VAT inclusive for houses requiring both wiring and service wire connection. Customers who are not on Ndawala pay K17,475.00 VAT inclusive as subsidized electricity connection fee and also carry out their house wiring at their own cost.

The wiring and installation of service wire for the Ndawala beneficiaries is carried out by qualified private electrical contractors identified by the Ministry of Energy through the Department of Energy. Contractors who are on current Ndawala are the same contractors who constructed power lines to respective sites. Supervision and certification of the works is undertaken by ESCOM to ensure quality. Installation and activation of meters is also done by ESCOM.

Ndawala Progress

Ndawala has registered 16,001. However, the contracts can only cover 11,211 house-holds.

To date, 85.7% of the 11,211 premises under contracted scope have been wired, 72% of those wired have their service wire installed. A total number of 4,458 meters have been installed so far representing 65 % of the wired beneficiaries. Out of the installed meters, 192 of these have been activated, ready to be used by beneficiaries.  There have been delays in both installation and activation of energy meters by ESCOM due to technical problems. It is expected that activation of all installed meters will be achieved by end of May 2020. The graphs below show the current progress of Ndawala.

This component will finance cost-effective, priority investments in grid electrification by providing households living in close proximity to an existing distribution infrastructure leveraging on the geospatial analysis to maximize the number of connections per provided financing. Specifically, the component will finance low voltage (LV) extensions, service drops, and prepayment meters. Some of the new connections may also require reinforcing hardware elements of the supplying MV feeder for ensuring quality and reliability of supply for new connections. The project will also support the elimination of connection barriers due to unaffordable internal wiring costs by providing ready boards to the low-income households that cannot afford internal wiring costs

The component will bridge the financing gap faced by solar companies operating in Malawi and hence address the challenges to developing the Off-grid solutions market. Finance will be required for (i) importers to increase stock and buy down the cost of the system through larger volumes; and (ii) distributors for working capital that currently is locked to provide PAYGO, the most accessible end-use financing. This component will set up a financing facility managed by a qualified fund manager that will provide access to loans and grants to eligible enterprises offering quality assured solar off-grid systems. Solar companies will use funds to finance stock, develop business models and build the distribution channels to reach consumers.

This component will finance various technical assistance (TA) and capacity building activities to ensure ESCOM, MoNREM and other sector stakeholders have adequate technical, planning, and operational capacity to implement the electrification roll-out activities.

Access to Clean and Renewable Energy

The ACRE Project has four main strategies, namely:
Strategy 1: Developing and strengthening clean energy mini-grids that promote productive uses of energy for rural economic transformation
Rural electrification – both on-grid and off-grid – must be linked to productive uses of energy if they are to produce real development outcomes and be cost-effective. ACRE Project will focus on coupling electricity generation, distribution, household connectivity and productive uses based on viable business plans. Private Mini Grid Operators or social enterprises will be selected based on the viability of their proposed business plans, with a focus on capital expenditure, operational expenditure and robustness of commercial revenue projections on pre-selected potential mini-grid sites. The Project will work hand in hand with the selected Mini Grid operator who will be provided with technical assistance grants and assisted with procurement of goods and services for the installation of a greenfield mini grid.
Productive uses will focus on agriculture as well as small and medium enterprises. These productive users will provide anchor loads to improve the economic viability of clean mini-grids. Mini grids (both existing and new) will be supported in the establishment of Productive Use Energy Hubs and cooperatives.
Rural cooperatives will be formed in specific energy dependent agro-enterprises targeting 50% women representation in both the existing and new mini-grid project areas. The Project will work in close collaboration with agriculture, trade and community development services extension workers in identifying, training and registration of the cooperatives. The registered cooperatives will be provided with seed capital financing through grants based on their requirements from the cooperative business plans so developed. The MITC will work in linking up the products from the cooperatives to both local and /or international markets.

Strategy 2: Accelerating and de-risking the clean energy transition in the country
The Project component aims at de-risking the industries and commercial enterprises that invest in renewable energy technology as back-up power system either in isolation or hybrid combination with the fossil fuel genset and utility grid. Qualifying entities will be selected based on the level of impact of the operations, commitment to environmental safeguards, commitment to gender promotion in its practices, size of the proposed systemand ability to provide matching grant. The beneficiaries will be selected through a competitive selection process similar to the Malawi Challenge Innovation Facility (MCIF) methodology.In order to increase the flows of finance and reduce the cost of capital, there are a range of actions that must be taken. These include improving communication with investors, building expertise in climate finance operations, and de-risking of the sector. ACRE Project will support GoM in outward communications on foreign investment opportunities, business incentives, and domestic market growth. ACRE will support establishment of an innovative energy fund that will promote or enhance transition from biomass to clean energy cooking. The UNDP accelerator Lab will engage beneficiary communities in consultations and conduct global searches for biomass alternatives to clean and sustainable energy for cooking.
ACRE will embark on awareness campaign on use of gas for cooking, promoting LPG, Biogas, sustainable charcoal and briquettes for rural, peri-urban and urban areas in the country. Furthermore, ACRE will work with qualifying employers to guarantee loans to staff to procure alternative cooking appliances through a revolving fund. In addition the project will seek to advocate for the development of streamlined regulations for the LPG supply chains.

Strategy 3: Promotion of private sector participation in renewable energy deployment in the health sector
The population demographics in Malawi have over 85% of the people living in rural areas with structural deficits in energy services. In addition to improving quality of service provision by powering technology adoption in social sectors, energy access also serves as a catalyst for retention of public service workers in the rural areas. Noticing the energy poverty prevailing in rural areas, many development partners have invested significant resources supplying energy in health facilities. However, such support has been disjointed and has not fully benefited from professional energy and investment planning, commissioning, and operations and maintenance. Even in rare situations where modest allowances for O&M has been catered for, there are no clear systems and in-situ capability for cost-effective maintenance and scale-up of reliable energy services in the health sector. This has rendered a lot of dysfunctional solar PV systems lying idle in health and education facilities, some of which require minimal investment to resuscitate.To illustrate the importance of energy in supply chain of medicines, each pharmacy needs adequate conditions for storage and handling for the following uses controlling temperature and hygrometry, adequate lighting, refrigeration, information and communication technology systems including for security. The absence of effective management systems for roll-out and operation of solar PV in the social sectors risks undermining public confidence in the transformative potential of renewable energy.

This strategy will:

(a) Provide technical and financial support for establishment an Energy Services Management Unit (ESMU) in the Ministry of Health, in collaboration with Department of Energy Affairs, ESCOM, MERA, selected districts councils, and other partners.
(b) Strengthen energy service planning, investment, scale-up, operations and maintenance in the health sector to improve the contribution of energy services for better health outcomes.
(c) Facilitate the aggregation of existing and new solar PV systems across public health facilities.
(d) Promote private sector participation in the operation and maintenance of energy systems in the social sector.
Strategy: Enhancing Power sector coordination, building institutional capacity development, and enhancement of conducting research and developmentMalawi’s power sector has most of the building blocks in place to drive forward with the build-out of systems that can bring reliable, affordable energy to people across the country, through on- and off-grid solutions. However, to optimize this process, the country will need a power sector that is closely coordinated, with strong government leadership and a clear vision shared across stakeholders. The project will take a lead role in use of the Accelerator Lab to develop evidence-based opinion pieces to influence research and Development in alternative cooking fuels. Relevant government ministries and departments will be engaged to develop policies to ensure the identification and participation of young women and in staff development initiatives in the energy sector.
ACRE Project will seek to support the DoE in the implementation of the propositions in both the National Energy Policy (2018) and the Renewable Energy Strategy that were developed during the implementation of the two UNDP precursor programs of Sustainable Energy Management and Increasing access to energy. Among several propositions, the country would like to develop a measurement framework for energy access adopting the Global Tracking Framework as well as promoting standardisation of renewable energy technologies.

This component will finance cost-effective, priority investments in grid electrification by providing households living in close proximity to an existing distribution infrastructure leveraging on the geospatial analysis to maximize the number of connections per provided financing. Specifically, the component will finance low voltage (LV) extensions, service drops, and prepayment meters. Some of the new connections may also require reinforcing hardware elements of the supplying MV feeder for ensuring quality and reliability of supply for new connections. The project will also support the elimination of connection barriers due to unaffordable internal wiring costs by providing ready boards to the low-income households that cannot afford internal wiring costs

The component will bridge the financing gap faced by solar companies operating in Malawi and hence address the challenges to developing the Off-grid solutions market. Finance will be required for (i) importers to increase stock and buy down the cost of the system through larger volumes; and (ii) distributors for working capital that currently is locked to provide PAYGO, the most accessible end-use financing. This component will set up a financing facility managed by a qualified fund manager that will provide access to loans and grants to eligible enterprises offering quality assured solar off-grid systems. Solar companies will use funds to finance stock, develop business models and build the distribution channels to reach consumers.

This component will finance various technical assistance (TA) and capacity building activities to ensure ESCOM, MoNREM and other sector stakeholders have adequate technical, planning, and operational capacity to implement the electrification roll-out activities.

Access to Clean and Renewable Energy (ACRE)

The Ministry of Energy with support from the United Nations Development Programme (UNDP) is implementing the Access to Clean and Renewable Energy (ACRE) project for a period of four years which started in 2020 and is expected to end in December 2023. This project is a successor to the Increasing Access to Clean and Affordable Decentralized Energy Services (IACADES) project which was aimed at increasing access to energy in selected remote, rural areas in Malawi by promoting innovative, community-based mini-grid applications in cooperation with the private sector and civil society which concluded in December 2019.

The goal of the Access to Clean and Renewable Energy (ACRE) Project is to increase access to clean, affordable, reliable, and modern energy by enhancing the sustainability, efficiency and cost effectiveness of energy technologies. The Project aligns to the UNDP CPD, specifically:  Inclusive and sustainable solutions adopted at the national and sub-national levels to achieve increased energy efficiency and universal modern energy access (especially off grid sources of renewable energy).    The ACRE Project contributes to UNDAF Outcome 3 – “By 2023, Malawi has strengthened economic diversification, inclusive business, entrepreneurship and access to clean energy”.

Expected results are: (1) Expanded generation capacity through scale-up of clean energy mini-grids targeting productive users in rural areas. (2) De-risked financial investments on clean and renewable energy technologies through innovative financing;  (3) improved access to renewable energy in health sector through implementation of GoM “Power for Health” Master Plan;   and, (4) strengthened institutional capability for effective renewable energy sector coordination, improved energy efficiency, research and development.

So far the project has conducted feasibility studies for Chisi Island in Zomba, Mwansambe in Ntheu and Malidadi in Mzimba. On productive use of energy the project has established 3 Cooperatives with the aim of enhancing productive use of energy in the communities and 3 more are yet to be registered. The project has also procured testing equipment for Solar PV system components for ensuring quality products. The project has also supported the development of net-metering guidelines and conduction of energy survey in Malawi. The project is also supporting the upgrading of Kasangazi Mini-grid Project.

PLANNED

CHISI ISLAND MINI_GRID PROJECT

The mini-grids site is located at Chisi Island in Zomba district. Malawi. The total electricity demand for the project area is projected at 125.45 kWh per day with a power profile that ranges from 0.12 kW to 17.47 kW, having a daily average of 5.23 kW.  The optimal capacity of the PV power plant for the mini-grid is recommended as follows:

Parameter- Chisi Island Value
Required Installed PV Capacity (kWp)

                        29.58
Number of Parallel PV module strings

13
Number of PV modules in series

                          7
Number of Modules (325 W each)

91
Inverter Size (kVA)

25
Inverter AC Output Voltage (V)

400
DC System Voltage

                         241
Battery Capacity in kWh

                      300.6
System days of autonomy

                           2.00
Recommended battery technology

Lithium-ion

The processes to construct this mini-grid are underway and will be supported by the Ministry with funding from UNDP.

MALIDADI MINI_GRID PROJECT

The Ministry of Energy conducted a study to detamine the potential of having a mini-grid at Malidadi in Mzimba district. The total electricity demand for the project area is projected at 275.348 kWh per day with a power profile that ranges from 6.92 kW to 31.08 kW and having a daily average of 11.47 kW.  The optimal capacity of the PV power plant for the mini-grid is recommended as follows:

Parameter- Malidadi Value
Required Installed PV Capacity (kWp)

                         95.6
Number of Parallel PV module strings

42
Number of PV modules in series

                          7
Number of Modules (325 W each)

294
Inverter Size (kVA)

50
Inverter AC Output Voltage (V)

400
DC System Voltage

                         241
Battery Capacity in kWh

                      823
System days of autonomy

                           2.00
Recommended battery technology

Lithium-ion

The financial and economic viability for the mini-grid at the base cost scenario are as follows:

Without productive use With productive use
The capital cost for the project is US $664,141 The capital cost for the project is US $687,250.95
The average revenue requirement tariff is US $0.49

Proposed base tariff for domestic/households is US $0.06

Proposed base tariff for commercial customers is US $0.40

Proposed base tariff for social amenities is US $0.03
The LCOE including CAPEX is US $ $1.06 The LCOE including CAPEX is US $0.75
The net present value is -US $482,918.88 The net present value is -US $203,742.83
The Internal rate of return is -15% The Internal rate of return is -4.42%
The payback period is higher than the planned plant life of 15 years The payback period is higher than the planned plant life of 15 years
Current annual loss to the economy due to unserved cost of energy is US $19,955

MWANSAMBE MINI-GRID PROJECT

The Ministry of Energy instituted a feasibility study for Mwansambe in Ntcheu District as a potential minigrid site. The total electricity demand for the project area is projected at 206.94 kWh per day with a power profile that ranges from 4.60 kW to 21.61 kW and having a daily average of 8.62 kW. The optimal capacity of the PV power plant for the mini-grid is recommended as follows:

Parameter- Mwansambe Value
Required Installed PV Capacity (kWp)                         59.8
Number of Parallel PV module strings 23
Number of PV modules in series                           8
Number of Modules (325 W each) 184
Inverter Size (kVA) 40
Inverter AC Output Voltage (V) 400
DC System Voltage                          241
Battery Capacity in kWh                       437.2
System days of autonomy                            2.00
Recommended battery technology Lithium-ion

The financial and economic viability for the mini-grid at the base cost scenario are as follows:

Without productive use With productive use
The capital cost for the project is US $610,658.75 The capital cost for the project is US $ 621,798.75
The average revenue requirement tariff is US $0.54

Proposed base tariff for domestic/households is US $0.02

Proposed base tariff for commercial customers is US $0.48

Proposed base tariff for social amenities is US $0.04
The LCOE including CAPEX is US $1.17 The LCOE including CAPEX is US $0.90
The net present value is -US $364,342.71 The net present value is -US $156,209.41
The Internal rate of return is -10% The Internal rate of return is -3.77%
The payback period is higher than the planned plant life of 15 years The payback period is higher than the planned plant life of 15 years
Current annual loss to the economy due to unserved cost of energy is US $14,997

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