Swedfund International has  given Electricity Supply Corporation of Malawi (Escom) a $745 000 (about K759 million) grant for the rehabilitation and implementation of two transmission lines in the Central and Northern regions.

The two lines are the Eastern Backbone from Nkhoma-Nanjoka-Nkhotakota to Chintheche in Nkhata Bay and the Nkhotakota-Chinyama-Kanyika transmission line.

The commitment follows the signing of the financing agreement yesterday in Blantyre between the fund and Escom.

Swedfund International manager Johan Bostrom Heiskala said the commitment was made in view of the fact that energy is one of the main drivers of inclusive and sustainable growth and job creation.

He said lack of access to reliable power is currently preventing Malawi from achieving its full economic growth and development potential.

Heiskala with Kumwenda after signing the deal

Said Heiskala: “We work with several countries in sub-Saharan Africa and we see that there is a general problem of transmission to be upgraded to provide energy access. It is in this context that we got in contact with Escom to discuss the Eastern Backbone.

“We expect that the study will capitalise on the development of the project so that it can reach financial clause. After this is built, we are hoping to see more reliable energy access to the population of the Northern and Central Region of Malawi.”

The funds are meant to go towards Environmental Social Impact Assessment and for Escom to engage a consultant to perform the study in par with international standards.

Speaking during the ceremony, Escom chief executive officer Kamkwamba Kumwenda said the project will provide Malawi’s private business sector with a more secure power supply which in turn can create an environment where business development can accelerate.

He said the grant has come at a right time when the company is planning to develop and strengthen the transmission and distribution of infrastructure in tandem with the country’s electricity generation plans.

Kumwenda said: “This transmission line called Eastern Backbone was built in 1981 and it is on wooden poles. It is usually off every two weeks for maintenance and we lose significant resources replacing these.

“This financing is thus critical as it would form a catalyst to open financing and soliciting of funding from multilateral financing institutions for the rehabilitation and expansion of the transmission lines.”

On his part, Escom chief operations officer Maxwell Limakwenda said the utility firm is focusing on the terms of reference for the recruitment of a consultant.

“In parallel, we have started discussing with potential financers so that as soon as we can reach an agreement, we should start the main project which is expected to cost about $90 million to $100 million [about K1 billion],” He said.

The scope of the project is to construct a new 51 kilometre, 132 kilovolt (kV) circuit line from Nkhoma Substation to Nanjoka Substation in Salima which also includes upgrading Nanjoka Substation, among others.

Swedfund is Sweden’s Development Finance Institution for sustainable investments in developing countries.

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