Mining & Trade News

The Malawi Government has planned to construct a railway line from Central to Northern Region under a Public Private Partnership (PPP) model.

The Public Private Partnership Commission (PPPC) says in a statement that it is currently seeking transaction advisory service provider to assist the Ministry of Transport and Public Works in the implementation and development of project.

The statement explains that the transaction advisory services will assist in determining the technical, legal, financial and environmental feasibility of developing and implementing the railway line, under a PPP options report which will recommend the best way to structure the PPP.

The statement reads: “It will further determine the most economical route of the railway line from Central Region to Northern Region to offer best trade services to Malawi.”

“The transaction services will also determine best option mix with the existing ports of Chilumba and Chipoka; existing road network and existing railway lines on the Malawi and Tanzania side as the situation may dictate.”

“The transaction service with also support the Ministry of Transport and Public Works in identifying a private partner to design, finance, construct, operate and transfer the required railway track and associated services which include operations of the locomotives within a given timeframe, quality, budget and scope.”

PPPC states that the Advisor is required to undertake a comprehensive PPP feasibility analysis for the Ministry of Transport and Public Works to establish the viability and affordability of constructing the railway line and operation of associated services.

It says a PPP option is considered an optimal solution and if the client opts to proceed to the procurement stage after obtaining all necessary approvals, the Consultant may be required to provide the necessary technical, legal and financial advisory support for the procurement of the private partner to design, finance and develop the railway line.

“All activities shall comply with the provisions of the PPP Guidelines and procedures Manual and other applicable procurement and PPP principles and regulations,” the statement reads.

It says the consultant will provide the Commission with all the bidding administrative support necessary including advertising, bidder communication, drafting and other administrative support for the entire procurement process.

It further says that an Evaluation Team comprising various stakeholders, assisted by the consultants, will evaluate the bids following guidance given in the Bid procedure as a Best and Final offer (BAFO) process.

The Advisors will assist PPP in the final negotiations comprising of categorising issues appropriately, developing timelines for completions and planning negotiation strategies and processes for reaching an effective agreement as the selected consultant will be expected to provide services for all the two phases which will be covered under one contact.

“Interested consultants should provide their information demonstrating that they have the required qualifications and relevant experience to perform the services,” says the statement.

It says the preferred consultants should have demonstrable experience of at least seven years of providing similar services, that is PPP detailed feasibility studies and procurement support to either the public or private sector or both.

PPP says the firm should further demonstrate having knowledge of the African operating environment as it affects the implementation of the PPPs especially in the railway transport sector.

The statement reads: “In addition, the team should provide evidence of a proven track record in successfully transacting PPPs in the ranges of the required sums of money in the past five years in various sectors.”

“It should also demonstrate having solid team of professionals in the relevant areas such PPPs, Financial and Risk Analysis, Mechanical/Transport Engineering, and Quantity Surveying with individual experience of not less than five years.”

It says the consultants will be selected using Quality and Cost Based Selection (QCBS) method which is in accordance with the procedures set out in the Public Procurement and Disposal of Assets Act 2017.

The deadline for submitting expressions of interest is November 15, 2022.

The Malawi Government is seeking an investor to construct and manage a multi-storey market in the Capital City Lilongwe under a Public Private Partnership arrangement.

Malawi’s Public Private Partnership Commission (PPPC) says in a statement that the preferred investor will be selected in accordance with Quality and Cost Based Selection method (QCBS) procedures and in terms of the Full Technical Proposal (FTP) and Financial Proposal format as described in the request for proposals in accordance with the PPP policy and PPP Act as well as the Procurement Policy, Procedures and Guidelines of the PPPC which can be found on its website: www.pppc.mw.

It says interested eligible investors may obtain further information and inspect the Request for Proposal Documents at its offices.

A complete set of Request for Proposal documents in English language may be purchased by interested eligible Investors upon the submission of a written application and payment of a non-refundable fee of MWK10-thousand

The deadline for submission of proposals is November 9, 2022.

Lilongwe is the largest city in Malawi and is divided into four sectors namely; Old Town, Capital Hill, Kanengo and Lumbadzi.

The design clusters residential, employment and service areas around each centre, in order to optimise travel distances and avoid congestion. The city is further divided into 68 areas.

The Council has four markets in the Central Business District (CBD) namely Central, Tsoka, Lizulu and Area 3 Markets.

The city has experienced rapid urbanisation such that the two main markets are overcrowded with traders.

The congestion of traders in the market has led some of the traders plying their business in the streets hence a need for a new infrastructure to accommodate more traders.

The Lilongwe City Council ranks the planned construction of the market dubbed the Wenela Multi-Storey Market and planned construction of an International Bus Terminal in the city as its flagship projects.

The Cotton Council of Malawi (CCM) says multi-stakeholder approach is imperative in developing the country’s cotton industry and its associated value chains.

CCM’s chairperson Duncan Warren made the call when the council joined the global community in commemorating World Cotton Day that falls on October 7 under the theme “Weaving a better future for cotton.”

The event provides an impetus for economic development of farmers as well as developing nations and it is celebrated across the globe through events that disseminate knowledge and give assistance to cotton farmers, processors, researchers and all other stakeholders about cotton production and marketing.

Speaking to Mining and Trade Review, Warren hinted that among the key challenges facing the cotton industry in Malawi is inadequate production to meet processing demand which needs efforts from various industry players in improving the situation.

In the 2021/22 season, about 25,000 tonnes of seed cotton was produced in Malawi, down from projected 35,000 tonnes due to climate change related problems such as the early season droughts, and cyclones Anna and Gombe which hit most parts of the country.

Warren pointed out that in an era of growing impacts of climate change, increased cotton production offers hope for a healthier planet as it has a negative carbon footprint and degrades 95% more than polyester in wastewater, helping to keep land and water clean.

He explained: “Cotton is the most abundantly produced natural fiber in the world. In 2019, world natural fiber production reached 34 million tons of which cotton accounted for nearly 80% of the total. More than 103 million tons of textile fibers were consumed in 2019, out of which cotton accounted for 24%”

“Within Malawi, cotton is grown by about 100,000 to 400,000 farming families in more than 15 districts in the country, and in some of the districts, stands in as a proxy food crop through which farmers are assured of both food and income security.”

In 2015 alone, the value of the textiles and garments industry in Malawi was estimated at US$ 410 Million which is about 6% of the GDP. Warren said this signifies one of the potential benefits available from growing and developing the cotton value chain.

 “We have also changed our mode of operations, previously we were using zoning system but we have changed to club system whereby farmers are encouraged to form clubs and cooperatives so that they stand a chance to enter into a contract with a buyer, that arrangement has improved the situation a lot in terms of access to inputs particularly seeds which are expensive and it has also improved marketing,” he said.

In his remarks CEO for Cotton Farmers Association of Malawi (COFA) Synowden Mbalafana hailed CCM for championing several noteworthy developments such as introduction of contract farming and hybrid seeds in the cotton industry that has seen local farmers substantially benefiting from their labour.

Mbalafana said Malawi is among a few countries to introduce Bt cotton, which has raised the seed cotton yield from an average of 800 kg/ha to more than 1,500 kg/ha over the past three years. Potentially, these average yields can further be enhanced through improved husbandry practices to about 3,000-4,000 kg/ha.

He said: “From 2018 when we started working with Cotton Council of Malawi we have registered significant improvements in our cotton farming as we have been introduced to contract farming which has seen closer and stronger links between buyers and farmer groups which has led to phenomenal improvements in loan recovery from a poor 15% to over 90%. It has also enhanced competition among the buyers resulting to increase in farm gate prices of cotton.”

In Malawi, cotton anchors more economic activities from agro-dealerships in pesticides, seeds, fertilizer, sprayers; employment in transportation; oil crushing and animal feeds. Cotton also directly employs more than 322,000 people in production, ginning, spinning and fabric production, garments and textiles industries.

A local non-governmental organisation Community Energy Malawi (CEM) says it has planned to construct over 100 mini grids in Malawi’s rural areas that have no access to power from the national grid.

The mini-grids which will utilise either micro solar or hydro technologies will be cabled to economic enablers such as irrigation and agro-processing projects, entrepreneurship activities, clinics, schools and households.

The project is targeting to connect at least 2,000 customers and benefit 10,000 people directly per mini-grid site.

CEM’s Country Director Edgar Kapiza Bayani told Mining and Trade Review that the organisation intends to electrify over 100 rural communities that have no access to sustainable energy.

CEM already operates the 80kW Sitolo Solar Mini-grid in Mchinji which has 735 customers connected with potential to grow to 1,200 customers, benefiting over 6,000 people.

Bayani explained: “The success, impact and experience in operating the 80kW Sitolo mini-grid and our activities in Malawi communities since 2011 have in turn generated demand for similar services across the country.”

“The 100 mini-grids project is envisaged to catalyse creation of 126,000 jobs, enhance performance of existing small to medium scale businesses, catalyse 1,000 new enterprises as well as enhance social services in education, health and general well-being for 1-million men, women, boys and girls. By powering schools, clinics and police units/posts and providing street lights around villages, the project will also support social capital development.”

He also expressed optimism that the project will fast-track economic growth of rural areas and ensure community resilience as it is grounded in climate justice concepts to utilise renewable energy technologies in decentralized energy systems that are resilient and robust, and reduce carbon foot print.

“It will ultimately advance environmental protection by reducing the use of kerosene for lighting and charcoal for cooking,” he said.

Bayani said the project is backed by diverse energy policies in the country such as the Malawi Renewable Energy Strategy which observes that mini-grids have the potential to connect 27% of Malawians in remote off-grid areas.

He said: This vision is also espoused in the Malawi National Energy Policy (2018) and the Malawi Least Cost Geospatial Electrification Plan which posits that minigrids are a cost effective means to electrify communities that are more than 10km from grid.”

“The project will favourably complement government’s goal of increasing access to electricity for Malawians. As Government works on increasing grid access, we are working with off-grid communities and catalyzing small scale factories as is the case at Sitolo where there is a sunflower oil processing facility. The mini-grids will be deployed in accordance with the Mini-grid Regulatory Framework.”

Meanwhile, CEM is working with another NGO Challenges WorldWide in conducting a prefeasibility study for the project and it is also finalizing plans to expand Sitolo Mini-grid to accommodate a new village as well as growing demand to cater for facilities like a third maize mill and other productive loads.

“We secured support from The Pebble Trust of Scotland and some Scottish Friends which is enabling us to visit the communities that expressed interest in mini-grid projects. So far we have visited Mchinji, Ntchisi, Salima, Nkhotakota and part of Lilongwe where about 25 villages have shown potential. We are on course to visit isolated villages that cannot be easily accessed in the rainy season in northern and southern regions before mid-November.”

The organization has also secured preliminary investment deals from different equity, grant making and loan financiers from mainly United States and Scotland, who are anticipating a full investment plan and finalization of other details. 

“A financial institution Green Max Capital is also working with us in a deal that will see the United States Trade and Development Agency financing some of the activities. We are working on setting up a Special Purpose Vehicle called CEM Minigrids Ltd to accommodate equity investors and also operate on business lines”

CEM has executed several leading initiatives in Malawi’s remote areas impacting thousands in 17 districts.

Other than the 80kW Sitolo Solar Minigrid, CEM has also implemented projects such as solar powered irrigation and cold storage; resilient solar systems in hospitals; sun ovens for rural bakeries; and policy advocacy.

Recently, CEM has been shortlisted for the ASHDEN 2022 International Award in the Energy Access Skills category.

Cement production in Malawi is expected to increase due to continued demand for the commodity resulting in an increase in production of about 20 percent of the raw materials like limestone, iron ore and kaolinitic clays also known as podzolana.

This is stated in Malawi’s 2021 Annual Economic Report published by the Ministry of Finance and Economic Affairs.

The Report states that in the Cement Industry, Shayona Cement Corporation, Cement Products Limited and Lafarge Cement (Malawi) Limited remain the only three biggest players in cement manufacturing in Malawi.

It, however, reads that only Shayona Cement Factory based at Chamama in Kasungu District and Cement Products Limited (CPL) Factory based at Njereza in Mangochi District are currently using the locally mined limestone and iron ore to produce cement in Malawi with a daily production rate pegged at 1,500 and 1,200 metric tonnes of cement per day, respectively.

It says during the period under review, the two companies had a combined consumption of limestone of up to 575, 397.02 metric tonnes from their respective mines and used 5,018.16 metric tonnes of iron ore sourced from Artisanal Small-scale Miners (ASMs) at Nthare Hills in Chiradzulu district to manufacture cement.

Lafarge Cement (Malawi) also manufactures cement using locally mined kaolinitic clays sourced from Senzani in Ntcheu District.

“This clay is part of the raw materials used in the manufacturing of cement due to its binding element and properties,” reads the report.

During 2020, Lafarge now known as Portland Cement Company, used a total of 26,599.62 metric tonnes of kaolinitic clays valued at MK239.165 million.

Nonetheless, Malawi’s cement industry is encountering a number of problems which are hindering its growth which include electricity blackouts, shortage of foreign exchange to import raw materials for production and unfair market competition posed by imported cement brands.

Shayona Cement Operations Manager Prajeesh Padmanabhan told Mining and Trade Review in an earlier interview that influx of imported cement is impacting on the company’s revenue to invest in expansion as it is forcing it to sell cement at very low prices.

“We are facing the challenges from imported cement on supply demand scenario which are pushing us to sell our cement at a very thin margin,” he said.

He said foreign exchange problems are making it difficult for Shayona to import raw materials for cement production such as gypsum which the company sources from Oman and sometimes Tanzania.

Padmanabhan, however, said due to the Company’s passion to support local industry and save foreign exchange, there have been attempts to source gypsum locally but levels of sustainability were hard to attain.

 “We have discussed with the gypsum mining groups in Dowa several times and once we even issued a purchase order but unfortunately they could not supply. If we can secure gypsum as per required quality in Malawi, it will help us lot,” he said.

MD for Cement Products Limited (CPL) Akbar Gaffar told Mining & Trade Review in a separate interview that due to scarcity of foreign exchange, the Company is facing challenges in importation of materials not only used for cement manufacturing but also cement packaging and procurement of spare parts for its heavy duty machines. 

Gaffar said: “As a company, we are failing to procure essential products in order to run a smooth and efficient production line.”

“Delays in remittances of foreign exchange have impacted our output marginally whereby we have been forced to produce less until sufficient raw materials are available.”

“In figures, this has translated to lost production of approximately 6,000 tonnes of cement.”

Padmanabhan and Gaffar also lamented prolonged electricity blackouts saying they force the cement producers to use diesel generators, which is more expensive.

Chairman for CPL Aslam Gaffar also told Mining & Trade Review that added to the host of problems is the current diesel shortages which are impacting on the production line.

Assignment: Supply and delivery speed cameras

Client: Roads Authority

Bidding procedure: National Competitive Bidding

Deadline: 28 October, 2022

Contact:  The Chairperson, Internal Procurement and Disposal Committee, Roads Authority, Functional Building, Room No. 21, Off Paul Kagame Road, Private Bag B346, Lilongwe 3.  

Contact: +265 1 753 699

Email: ipc@ra.org.mw / schipala@ra.org.mw

Website: www.org.ra.mw  

Assignment: Supply and delivery of scholar patrol equipment, reflective vests and reflective bulbs

Client: Roads Authority

Bidding procedure: National Competitive Bidding

Deadline: 28 October, 2022

Contact:  The Chairperson, Internal Procurement and Disposal Committee, Roads Authority, Functional Building, Room No. 21, Off Paul Kagame Road, Private Bag B346, Lilongwe 3.  

Contact: +265 1 753 699

Email: ipc@ra.org.mw / schipala@ra.org.mw

Website: www.org.ra.mw 

Assignment: Supply and delivery breathalyzers, mouthpieces and printers

Client: Roads Authority

Bidding procedure: National Competitive Bidding

Deadline: 28 October, 2022

Contact:  The Chairperson, Internal Procurement and Disposal Committee, Roads Authority, Functional Building, Room No. 21, Off Paul Kagame Road, Private Bag B346, Lilongwe 3.  

Contact: +265 1 753 699

Email: ipc@ra.org.mw / schipala@ra.org.mw

Website: www.org.ra.mw 

Assignment: Supply and delivery of calendars, notebooks/diaries, card holders and business cards

Client: Electricity Supply Corporation of Malawi

Bidding procedure: National Competitive Bidding

Deadline: 03 November, 2022

Contact:  Procurement and Disposal Office, ESCOM House Annex Building, 9 Haile Selassie Road, P.O Box 2047, Blantyre.     

Assignment: Provision of health insurance scheme for Former Presidents, Former Vice Presidents, Cabinet Ministers, Deputy Ministers, Former Secretary to the President and Cabinet, Secretary to the President and Cabinet, Deputy Secretary to the President and Cabinet and their dependents for period of three years 2022 – 2025  

Client: Office of President and Cabinet  

Bidding procedure: National Competitive Bidding

Deadline: 24 October, 2022

Contact:  The Chairperson, Internal Procurement and Disposal of Public Asset Committee, Office of president and cabinet, P/Bag 301, Capital City, Lilongwe 3.

Assignment: Supply and delivery of ESCOM transformers (3)

Client: Southern Region Water Board

Duration: 3 weeks

Bidding procedure: National Competitive Bidding

Deadline: 4 November 2022

Contact:  The IPDC Chairperson, Southern Region Water Board, Off Namiwawa Road, Private Bag 72, Zomba, Malawi.

Assignment: Construction of transmission line at MUST in Thyolo (2400 meters)

Client: Southern Region Water Board

Duration: 4 weeks

Bidding procedure: National Competitive Bidding

Deadline: 4 November 2022

Contact:  The IPDC Chairperson, Southern Region Water Board, Off Namiwawa Road, Private Bag 72, Zomba, Malawi.

Assignment: Environmental and Social Impact Assessment (ESIA) and Resettlement Action Plan (RAP) for Kholongo Multipurpose Dam for Mponela Town

Client: Ministry of Water and Sanitation

Duration: 6 months

Bidding procedure: National Competitive Bidding

Deadline: 16 October, 2022

Contact:  The Principal Secretary; Attention: Internal Procurement and Disposal Committee, Ministry of Water and Sanitation, Tikwere House, City Centre, Private Bag 390, Lilongwe, Malawi.

Assignment: Construction of two classroom blocks complete with desks, 2No double VIP and 2No single VIP latrines under GESD

Client: Dedza District Council

Bidding procedure: National Competitive Bidding

Deadline: 31 October, 2022

Contact:  The Chairman of IPDC, Dedza District Council, DC’s Receprion, P.O Box 140, Dedza.

Assignment: Construction of a new staff house complete with solar system, one single – hole VIP latrine and all other associated works at Kamtambo Primary School in T/A Chilikumwendo under GESD

Client: Dedza District Council

Bidding procedure: National Competitive Bidding

Deadline: 31 October, 2022

Contact:  The Chairman of IPDC, Dedza District Council, DC’s Receprion, P.O Box 140, Dedza.

Assignment: Construction of a health post complete with 2No Double VIP latrines. 1No staff house complete with plumbing, solar power and 1No single VIP latrine at Madzumbi in T/A Kasumbu under GESD

Client: Dedza District Council

Bidding procedure: National Competitive Bidding

Deadline: 31 October, 2022

Contact:  The Chairman of IPDC, Dedza District Council, DC’s Receprion, P.O Box 140, Dedza.

Assignment: Construction of a police unit with 2No double VIP latrine at Namakasu in T/A Chilikumwendo under GESD 

Client: Dedza District Council

Bidding procedure: National Competitive Bidding

Deadline: 31 October, 2022

Contact:  The Chairman of IPDC, Dedza District Council, DC’s Receprion, P.O Box 140, Dedza.

Assignment: Drilling of high yield borehole, construction of tower with 10,000 litres water tank, 6No water kiosks and water distribution works to six villages and other associated works under GESD

Client: Dedza District Council

Bidding procedure: National Competitive Bidding

Deadline: 31 October, 2022

Contact:  The Chairman of IPDC, Dedza District Council, DC’s Receprion, P.O Box 140, Dedza.

Assignment: The Lilongwe City Council Flagship Project, International Bus Terminal   

Client: Public Private Partnership Commission

Bidding procedure: National Competitive Bidding

Deadline: 9 November, 2022

Contact:  The Chairman, Internal Procurement and Disposal Committee, Public Private Partnership Commission, 2nd Floor Livingstone Tower, P.O Box 937, Blantyre.

Tell: +265 1 823 655 / 821 248

Email: info@pppc.mw

Assignment: The Lilongwe City Council Flagship Project – Wenela modern multi – storey market

Client: Public Private Partnership Commission

Bidding procedure: National Competitive Bidding

Deadline: 9 November, 2022

Contact:  The Chairman, Internal Procurement and Disposal Committee, Public Private Partnership Commission, 2nd Floor Livingstone Tower, P.O Box 937, Blantyre.

Tell: +265 1 823 655 / 821 248

Email: info@pppc.mw

Malawi’s Minister of Energy Ibrahim Matola has cautioned Independent Power Producers (IPP) over “unrealistic delays in implementing various power generation projects despite being given a consent to execute the projects.”

Matola made the caution at the launch of the Malawi Power Industry Compendium, which exhibits potential power generation projects in Malawi, by Power Market Limited (PML).

The Minister said there are some power purchase agreements signed as early as 2019 whose respective projects are yet to start.

Matola said: “I wish to express my sadness with the delays that some IPPs are making once given a go ahead to develop a power project. It does not make sense to hold on to agreements at the expense of the country that desperately needs electricity.”

“Therefore, am asking PML to review all these idle Power Purchase Agreements and find a way of making the holders accountable and responsible. Otherwise, it will be good for the investors to relinquish the agreements so that other potential investors are allowed to develop the sites.”

Commenting on the Compendium, Matola emphasized that the compendium has been developed at the right time when the country is in immense power crisis which is weighing on the development of key growth sectors for Malawi’s economy.

He explained that the compendium will provide the much needed information on key projects to be pursued and the incentives that government is providing to the investors.

Matola said: “There has been a continued imbalance between electricity demand and supply due to low generation capacity. Similarly, the independent power producers have not satisfactorily been able to come online as anticipated.”

 “The successful implementation of the projects in the Compendium will assist in achieving energy self-sufficiency for sustainable development. I am aware of the directive that was given by the President to deliver 1,000 megawatts by 2025. I have confidence that together, we will achieve this target and even more.”

Meanwhile, government has reviewed the Independent Power Producers Framework in a quest to align it to the recent developments and to ensure speedy implementation of energy generation projects.

Energy expert and Civil Society Organizations (CSOs) working in the extractives sector have advised mining companies to consider utilization of off grid power sources to avoid interruptions on production as the country is still struggling with power shortages.

The remarks come as the Malawi Government is negotiating Mine Development Agreements with three companies intending to launch large scale mining operations namely: ASX-listed Lotus Resources for Kayelekera Uranium Mine in Karonga district; Canada and UK listed Mkango Resources to mine rare earths at Songwe Hill in Phalombe district and ASX-listed Globe Metals & Mining to open a niobium and tantalum mine at Kanyika in Mzimba district.  

Currently, the country’s generation capacity stands at 355MW including a cross border import of 6.5MW against 2022 projected demand of 618MW.

Mining and energy expert Grain Malunga said despite that the Electricity Generation Company and Independent Power Producers (IPPs) have a number of energy generation projects in pipeline, the mining companies should consider setting up their own power plants in case the Government fails to meet the projected demand by the time the companies venture into actual mining.,

Malunga said: “Though it might be cost effective but with the electricity challenges we are experiencing, the mining companies need to have a back-up for them to excel in the industry.”

“Some of the companies will require over 10MW which might not be possible for the Government to supply if the energy situation remains unchanged.”

While concurring with Malunga, Natural Resources Justice Network (NRJN) Programs Coordinator Joy Chabwera bemoaned that currently the Government is not providing a conducive environment for mining investors in as far as energy is concerned.

Chabwera said: “When the company is coming to Malawi it considers three things; one the value of the mineral, two an enabling environment and three revenue management.

“And when we look at these aspects it is where government has to come in to provide an enabling environment for the investors including provision of needed energy.”

“If we are going to have about five large scale mines, the dream of raising Gross Domestic Product (GDP) to 20% will be realized. It is the duty of the government to provide necessary energy to the investors.”

He said though there are alternative sources of energy like coming up with their own power plants, that will come with higher costs to weigh on the feasibility of the project.

ASX-listed Paladin Resources operated the Kayelekera Mine using power it generated using diesel generators before it put the project on Care and Maintenance.

Meanwhile, Lotus indicates in a statement that apart from relying on connection to the national grid, the Company has looked into a number of options for power supply including: generating power from excess heat generated in the onsite acid plant (estimated at 2MW); renewable options, including solar and hydro; and replacement of the existing diesel gensets with a Build-Own-Operate (BOO) contract arrangement

It explains that discussions are ongoing with the Electricity Supply Corporation of Malawi (ESCOM) and a local electric power consultant has been contracted to undertake an assessment of availability and capital and operating costs for connecting to the grid either at the nearby town of Karonga (~50km from Kayelekera) or other potential substations in close proximity to Kayelekera.

It also says a consultant Metso Outotec is preparing the study for recovering energy through a steam turbine from the acid plant and solar providers have been requested to send proposals for various solar options.

The Company has conducted a detailed power assessment as part of the Definite Feasibility Study (DFS) that has considered both the cost implications and the carbon emissions for the Project.

Though the country is struggling to deal with power shortages that are hitting many sectors of Malawi’s economy, there is uncertainty over the construction of the proposed 300MW Kam’mwamba Coal-fired Power Plant at Zalewa in Neno District amidst the global campaign against use of fossil fuels.

Various Civil Society Organizations (CSOs) are advocating for a ban on utilization of coal saying it is a dirty source of energy which is damaging to the environment through air pollution from the power plants.

Mining and Trade Review has established that in light of the global campaign to promote renewable energy sources, many financiers are reluctant to finance the 300MW coal-fired power plant project which is being implemented by Electricity Generation Company (EGENCO).

A feasibility study on the power plant which started in August 2019 was completed by September 2021 with two main components of updating previous techno-economic feasibility study and Environmental and Social Impact Assessment (ESIA) and; local coal resource exploration.

Following completion of the study, EGENCO embarked on seeking financing for the project but is yet to secure funds for the plant whose construction was projected to run from 2022 to 2024.

Public Relations Officer for EGENCO Moses Gwaza could not respond to both emails and calls to comment on the development.

But in a an interview, Coordinator for Chamber of Mines and Energy Grain Malunga tipped the Government to use local resources to fund the project if financial institutions will continue shunning it.

Malunga said: “Government should mobilize local resources to invest in Kam’mwamba Coal Fired Plant project and these resources can be in form pension or insurance funds.

“For your information German has re-commissioned their coal fired plants. It is not about academics, it is about economic development and livelihood sustainability. Thermal power plants need technology innovation and this is possible.”

“Coal will always play a role in steering industrialization and energy generation. Let us be careful against use of climate change initiatives as a means of decarbonizing Africa when it is meant to slow African industrialization.”

Malunga also expressed concern that CSOs and African governments are easily influenced by campaigns that can injure them because they rely on foreign finance and, therefore, stressed the need to start creating wealth using local resources.

In her remarks, Public Relations Officer in the Ministry of Energy Upile Kamoto, however, sounded optimistic that funds will be secured for implementation of the project saying not all financial institutions are reluctant to fund the project.

Kamoto said: “As a country and as stipulated in the National Energy Policy 2018, we need to diversify our sources of energy for power production for efficient and reliable power supply and coal is on the list for achieving this goal.”

“As such the ministry will explore all available options for financing the Kam’mwamba coal fired power plant including local financing.”

Kam’mwamba Coal-Fired power plant project pre-feasibility study was financed by a loan from Export and Import (Exim) Bank of China to the tune of US$667-million project with Lilongwe required to source US$104-million as commitment fee.

The plant which is set to use coal from Moatize in Mozambique to be hauled using rail transport is projected to have a life span of 30 years.

Once fully operational, the plant would help Malawi to diversify from using hydro power which has proved to be unreliable due to problems emanating from climate change.

The project is will be implemented under the Engineering, Procurement and Construction (EPC) model, which is a particular form of contracting arrangement used in big projects where the contractor is responsible for all the activities from design, procurement, construction to commissioning and handover of the project to the end user or owner.

Kam’mwamba project is in line with EGENCO’s diversification objectives where by the company seeks to improve its power generation mix from being 95% hydro based to 76% hydro based in 5 years.