Why ESCOM and EGENCO Are Failing To Improve Electricity Supply In Malawi

Tadala Khonje

January 13, 2022

It is no secret that Malawi has a very low rate of access to electricity, currently estimated that only 10 percent of the population has access to electricity – the lowest in the Southern Africa Development Community (SADC) region.

Installed generation capacity as of November 2018 is 417 megawatts (362.8 megawatts being hydro and 54.15 megawatts from diesel generators run by the Energy Generation Company (EGENCO) Limited) against a peak demand of over 470 megawatts. The main source of electricity is hydropower which generates nearly 90 % of the power in this country. The country has committed to achieving “Sustainable Energy for All”, as enshrined in Sustainable Development Goal (SDG) number 7. Energy is a means to an end; it provides a platform for social and economic development, and a pathway for achieving many of the other SDGs.

The third Malawian Growth and Development Strategy (MGDS III) recognizes this central role of energy, citing it as “the lifeblood of the economy”, and laying out a goal to “provide sufficient sustainable energy for industrial and socio-economic development”. Improved access to reliable and sustainable energy supply is one of the core outcomes the MGDS III seeks to achieve. Malawi has three of the four power generating stations which are situated along the Shire River in the southern region of the country. Apart from the low energy generation capacity, there is also a problem of insufficient transmission and distribution facilities. As a result of all these problems, the country faces frequent power outages rendering economic and social development difficult.

Two other natural challenges have emerged in the sector, namely:

Effects of climate change which are leading to less rainfall and therefore less water available for generating power;
Environmental degradation with one of the causes is deforestation, which is leading to siltation of water intakes at hydropower stations. However, one would want to know whether or not the Energy Sector is contributing to the national goals of poverty reduction, industrialization and economic growth?

ENERGY SUPPLY IN MALAWI

In terms of the environment, modern energy services can drastically reduce reliance on wood fuel and begin to tackle the widespread deforestation which is causing massive environmental damage across the country and contributing to climate change. Renewables are the only energy option which can achieve these aims without producing hazardous and polluting emissions. Given these benefits, and the cost and impacts of continuing to source energy from environmentally and socially damaging sources, the time to act to increase renewable energy across Malawi is now. However, the ordinary Malawian continues to cut down tresses for firewood and industries clear land for infrastructural development without planting more trees to replace those they cut down.

In addition, the energy sector has proved to be a source of revenue for the Malawi Government in the form of royalties, taxes, among others. Its production and distribution industries provide a livelihood to thousands of people who are employed therein. Although the electricity supply corporation collects many funds, the funds are misused and have not been used to improve the services being offered to customers such as the faults response which takes forever to attend to crucial reported cases.

On the same, planning is essential in formulating policies for, and investing in energy; but the approach to it is changing rapidly because of change of government leadership and appointments into these public offices. This challenges the delivery of energy services from the growing national demand and national response over environmental concerns, particularly the adverse effects of greenhouse gas (GHG) emissions on the global climate.

One effect of these contributing developments has been a change in the meaning of, and approach to, energy planning. It can no longer be a matter of central government calculating energy demand and then determining the investment needed to meet it. Energy planning now needs market liberalization to create competition for the existing electricity supply corporation to meet the demand of electricity. With increase in electricity shortage, macro-economic loss accelerates, due to the rigid demand for energy, as Malawi is currently in the stage of industrialization and urbanization.

How to improve electricity supply in Malawi

In all honesty, it is simple. First step, nationalize the energy sector in Malawi, asap. A lot of you reading this might disagree with this statement but if you check the facts around the world, it is a must. Any country/nation that is serious about elevating the status of the energy supply and at the same time increasing local jobs, they always nationalize, from America to Japan, to China, to Singapore. This method of nationalizing the electricity supply would secure government funds and resources for decades to come. It minimizes the usual theft from international companies. This is a must, no debate about it, the likes of Julius Malema want to push for nationalizing of electricity in South Africa because even SA is facing similar challenges of energy output despite a robust economy. Nationalization would instantly start to solve these issues because nationalization makes sure that all the money and resources are locally based(minus the corruption).
After this step, we would also have to stop assigning random ministers of Energy with no connection or degree in engineering. If you are going to be a minister of Energy, you have to come from a background of engineering or anything relating to energy. This would solve a lot of ours. How can you, for example, delegate a position that requires deep knowledge of engineering, to someone who is a lawyer, a medical doctor, a teacher etc, that makes absolutely no sense and it needs to stop asap. No debate about this.
Once this is out of the way, the other step would be to investigate every CEO and top executive of Escom and Egenco to make sure they actually know what they are doing. Their performance and jobs should be based on what improvements they are making, if after a year or two we see no changes, we should automatically replace/fire the top management of these two companies and move on to more capable people. The CEO’s and executives need to be independently reviewed after each 6 month or 1 year by the Public Committee or even Anti-corruption bureau when necessary, because we all know their is plenty of corruption between these two companies.
This is a simple step, we need to invest in nuclear energy(yes, we do, every nation who is serious about energy has nuclear as a focus), we also need to invest in wind energy and of course solar energy. We need to make sure only the government is producing electricity, foreign companies should only be able to invest but not compete with the government, they can support the government only. It’s a harsh step but in the end, this would help Malawi grow as an independent nation in the future.
The final step is to make sure all tenders, deals etc are made completely transparent and available to the public along with status updates of each project that is approved, we need to be seeing where all this money is going and they should be updating the CEO needs to be updating the public on what he/she is doing to improve the situation, do not tell us things will change in 10 years, that is a long time away, work on things now. These two companies make billions in revenue yet they pretend as if they don’t have a surplus in the bank accounts.

In conclusion, the closure of big investment companies is a negative impact on the economic development and this is due electricity shortage in the Country. The possible solutions would be securing the capacity of hydropower generation facilities as this will help to increase Malawi’s power generation. Another rehabilitation and upgrade of transmission and distribution facilities in urban area to stabilize electric power supply and reducing transmission loss which also result in contributing to improvement of ESCOM’s and EGENCO’s service delivery.

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