Agreement reached for Mpatamanga in Malawi

A consortium of France’s state energy group EDF and Norwegian renewable energy developer Scatec has signed a binding commercial agreement to co-develop the 350 MW Mpatamanga hydropower project on the Shire river in Malawi.

The agreement, signed on 6 September with the Government of Malawi and the International Finance Corpor­ation (IFC), the World Bank Group’s private sector arm, concludes the selection process undertaken by the Government of Malawi for a private sector partner to finance, build, and operate the plant on a public-private partnership basis. The agreement also awards the role of project lead developer to the Norwegian-French consortium. Finance will be provided by EDF, Scatec, the IFC and the Government of Malawi, using funds from the World Bank, as well as debt from development finance institutions, to be co-ordinated by the IFC. “The Mpatamanga project will not only double the installed hydro capacity in Malawi, but also improve power supply security, provide opportunities to increase renewable energy capacity and contribute to the controlling of the flow of the Shire river downstream from the powerplant. The Government of Malawi is indebted to its partners in achieving this milestone, which is a major step in the development of this project,” said Malawi’s Minister of Energy, Ibrahim Matola. “IFC supports the Government of Malawi’s goal to accelerate access to affordable clean energy. The Mpata­manga hydro plant has the potential to increase Malawi’s electricity infrastructure and connect thousands of rural and remote households, while also spurring green, inclusive, and resilient growth in the country,” said Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa. Mpatamanga will include a 309 MW peaking plant and a 41 MW downstream plant. The project is ex­pected to help reduce energy shortages and enhance energy security in Malawi. The 309 MW plant with its reservoir storage is designed to provide much needed peaking power and overall grid stability, with its ability to ramp production up or down to meet actual demand. The environmental and social workstream for Mpatamanga will be completed first, and in parallel, the tender process for key construction contracts will be launched, according to the IFC. Construction of the two dams and associated infrastructure is expected to take around four years. The project’s majority shareholders will be EDF and Scatec, along with its joint venture partners British Inter­national Investment (BII) and Norfund, which will own 55 per cent of the project. EDF will hold 27.5 per cent, Scatec will hold 14 per cent, and BII and Norfund will each hold 6.75 per cent. The Government of Malawi will own 30 per cent, and IFC will hold the remaining 15 per cent. Malawi has endured a prolonged electricity supply deficit. The 129.6 MW Kapichira hydro plant, the country’s main generating facility, which normally represents almost 23 per cent of Malawi’s total installed capacity, and about a third of its domestic generation, has been out of action since January this year, when it was severely damaged during tropical storm Ana (see H&D Issue 2, 2022, and Malawi’s country report in the World Atlas 2022). Flash floods during the tropical storm caused extensive damage to the dam and fuseplug, resulting in the draining of the reservoir and the power station being out of operation. In July, the World Bank Group’s soft lending arm, the IDA, approved a US$60 million emergency power restoration project to rehabilitate Kapichira, as well as carry out repairs to the country’s transmission and distribution network (see H&D Issue 4, 2022). Although Malawi has had success in bringing utility-scale solar PV projects online, the grid cannot absorb more variable power. Deputy Director of the Department of Energy Affairs, Joseph Kalowe­kamo, commented in May 2021 that once Mpatamanga was developed, “We may be able to double what we can put into the grid from intermittent generation sources”.

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