Malawi Government is seeking to change the value of the Lilongwe-Salima water project loan from Mk105 billion to MK171.1 billion.

Khato Civils Limited: Awarded the project

Last year, Parliament authorised Government to borrow MK105 billion from local banks, through Financial Bill No. 11 of 2023 to finance the Lilongwe- Salima water project.

The flagship water project is worth MK552 billion and is awarded to Khato Civils Limited and South Zambezi joint venture.

However, Government is now seeking to amend the NBS Bank plc and National Bank of Malawi plc Lake Malawi  Water Supply Project Loan Authorization Act of 2023 to change the value to Mk175.1 billion.

The revision of the amount follows last year’s 44 percent devaluation of the Kwacha.

According to the Bill, the initial MK105 billion is also falling short of the 30 percent that Government planned to invest in the project.

“The sum of MK105 billion authorized by Parliament now, due to the recent currency realignment, falls short of the $100 million equity contribution from Government into the project,” reads part of the Bill.

From the onset, however, the Bill has been facing strong resistance from multilateral donors such as the World Bank.

In its latest Malawi Economic Monitor, the World Bank says the planned Lilongwe- Salima Water Project raises governance concerns from the modality of its implementation, especially related to a lack of transparency around the borrowing of resources for government.

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