Utilities of Malawi
Public utilities that have been identified as a priority area for private investment by the Malawian Government include water, irrigation, and municipal and liquid waste management and sanitation.
Key priority areas have been identified in the energy sector for public–private partnerships, namely electricity, oil and natural gas. The state-owned Electricity Supply Corporation of Malawi (ESCOM)
petrol and usually comprises 10–25 per cent of the fuel. The leading oil company in Malawi is Oilcom, which is 50 per cent owned by Malawian interests and 50 per cent by British Petroleum.
Five government-owned parastatal water boards representing Blantyre, Lilongwe and the Northern, Central and Southern regions, supply water and sewage services in Malawi. In 2007, all of these were making a loss. Malawi is increasingly facing water stress as its population density accelerates and resources become more inadequate.
The water supply is often intermittent, thanks to regular blackouts and a limited power generating capacity. Independent reports suggest that many households in Malawi’s rapidly expanding urban areas are not connected to a clean water supply and that less than one in ten households are connected to a sewer. Since the early 2000s, the Ministry of Irrigation and Water Development has been implementing the National Water Services Development Master Plan, supported by the African Development Bank and various international non-governmental organisations, including Water Aid. A key part of Malawi’s development strategy is the ‘expansion of irrigated agriculture’ and widening access to safe drinking water. Irrigation is considered essential to increasing agricultural efficiency and rural economies thereby. The Shire Valley Irrigation Project in the Lower Shire Valley will follow a PPP process, with its procurement notice released in January 2014. The project is intended to widen Malawi’s export market and alleviate the risk of ‘dry years’. The International Development Association will finance US$90 million.
There are 13 main telephone lines, 76 mobile cellular subscribers and ten internet users per 1,000 people (2007). In recent years, growth in mobile telephony has been much faster than in landlines; however, after the privatisation of Malawi Telecommunications (MTL) was completed in 2006, the numbers of landline subscribers and internet users was set to grow rapidly. MTL is now 80 per cent owned by Telecomm Holdings Limited, a consortium in which Press Corporation is the majority shareholder, with 20 per cent retained by the government. The first mobile networks to be licensed were Telekom Networks (1996) and Celtel (1999), and coverage around urban areas is now good. The industry regulator is the Malawi Communications Regulatory Authority. Some five per cent of households have TV sets (2006). There are two personal computers per 1,000 people (2005).
The Electricity Supply Commission of Malawi (ESCOM) solely controls electricity in Malawi. In 2004, and again in 2008, privatisation was considered by the government to fill the gap between energy capacity and future predicted demand. However, this was not progressed, so ESCOM remains public. Facing increasing pressure to reduce the frequency of blackouts, the government opened a hydroelectric plant, US$55 million Kapichira II, on the Shire River in Chikhwanda in January 2014 and has plans to open further equivalent sites, as well as diversify from hydroelectricity into thermal energy and coal-driven electricity. The Kapichira plant was funded as an EPC turnkey project contracted to China Gezhouba (Group) Corporation and completed two months ahead of schedule. Hydropower plants on the Shire River in the south of the country provide most of the electricity consumed in Malawi. However, production is constrained by an inadequate flow of water in the river, especially in periods of drought when supply often fails to meet demand. The high cost Electricity Interconnector Project with Mozambique, announced in 2007, has also been implemented to link Malawi to the Southern Africa Power Pool (SAPP) through Mozambique. SAPP could, potentially, bridge the energy gap, though the pool itself is not always able to meet demand in the region.
Malawi’s modest requirements of oil and gas are imported via the ports of Dar es Salaam and Mbeya in Tanzania, and Nacala and Beira in Mozambique. No reserves of oil or gas have been discovered in the country. Locally produced ethanol is added to petrol, and usually comprises 10-25% of the fuel. The leading oil company in Malawi is Oilcom, which is 50%-owned by Malawian interests and 50% by the British company BP.