Malawi Doubles Down on Diesel for Power
WHY YOU SHOULD CARE
The future of this strategy could shape the future of Malawi’s fragile economy.
By Samuel Majamanda
Daylong power outages are common for Malawians. Since mid-2017, they’ve at times had to wait 36 hours for power to return, only to have electricity go again 12 hours later. Now, the firms in charge of the country’s electricity generation and power supply are turning to diesel-powered heavy-duty generators to stop the East African nation’s already fragile economy from sliding further. But in the process, some fear the country may only be bringing on another disaster.
The country’s Electricity Generation Company (EGENCO) and the Electricity Supply Corporation of Malawi (ESCOM) have planted three giant generators in the northern city of Mzuzu, and 179 trucks are expected to arrive in the country this summer with consignments of generators from China. The machines will then be spread out across the country. The aims: to boost generation capacity in Malawi and help citizens and businesses that rely on power.
The ESCOM currently faces a possible 351-megawatt demand, and that’s to supply power to the only 11.9 percent of Malawians who, according to the World Bank, have electricity connections. Even that demand far surpasses the country’s current production capacity of around 220 MW. When the crisis hit Malawi last summer, the power supplier and generator blamed low water levels and debris in the country’s main sources of hydropower — Lake Malawi and the Shire River. But those factors also compounded an already dire challenge confronting Malawi: Electricity generation has dwindled but demand for power by both the domestic and industrial sectors has almost doubled over the past decade.
We cannot rule out the fact that this project might just turn out to be another disappointment in the future.
Anthony Ligoya, businessman
The generators are critical, ESCOM and EGENCO are arguing, because they are expected to top up the current production of power by another 78 MW, slicing the deficit between demand and generation by more than half. But critics are questioning whether the generators may end up just papering over a larger problem — and even the agencies acknowledge that the shortfall, which the generators will only partially take care of, has forced them to ration power.
“Imposition of power rationing,” says William Liabunya, chief executive officer for EGENCO, is essential “in order to ensure that every part of the country receives some electricity.”
An end to the current crisis could bring relief to low- and middle-class Malawians who survive on small- and medium-scale businesses that rely on electricity — such as welding and hairdressing. Many major investors running industrial-scale businesses in the country have welcomed the move too.
But other concerns are emerging as well. Some fear the project — ESCOM is unwilling to reveal its cost — could end up raising the price of electricity, hurting ordinary citizens. Diesel generators are hardly the best for the future air quality of a country. And their cost makes them, at best, a temporary solution — one that may win the country’s power agencies kudos for now, but could again plunge Malawians into a power crisis soon enough, especially since Malawi imports all of its fuel. The dependence on Chinese generators, some worry, could also strengthen the Asian power’s grip on Malawi’s economy. China is already Malawi’s second-largest trading partner after South Africa.
“Our country does not produce fuel, nor does it have any fuel reserve currently,” says Anthony Ligoya, a businessman in the capital city, Lilongwe. “We cannot rule out the fact that this project might just turn out to be another disappointment in the future when we shall wake up one day to find no fuel and no electricity in the whole country.”
Some, like Kenwell Kadango, manager for Petroleum Importers Limited — a Malawian firm that buys oil mostly from Tanzania and Mozambique — argue that concerns about the future are overblown. After all, he says, the last major power crisis Malawi faced before the current one was in 2011, suggesting that large-scale electricity shortages are intermittent at worst.
But the 2011 crisis sparked mass demonstrations against then President Bingu wa Mutharika, during which 12 people died in clashes between police and civilians. His brother, Peter, is now the president. The country did face a less severe but nonetheless significant power shortage in September 2012 as well.
And the first signs that Ligoya’s fears have a basis are already appearing. Currently, electricity tariffs in Malawi are reviewed every four years. But when the first generators arrived in Mzuzu in December, EGENCO and ESCOM proposed a tariff hike of nearly 25 percent, which means Malawians will start paying 73.23 kwacha (10 cents) instead of 53.80 kwacha (7 cents) per unit as a result of the shift from the hydropowered to diesel-powered electricity generation. In a country where the average daily income is less than a dollar — South Sudan is the only poorer country in the world — that’s a hefty hike.
Generating electricity from renewable sources like water and wind is the only lasting solution to Malawi’s power woes, says Arnold Kadziponye, a senior executive at Bondo Micro-Hydro Scheme, an independent electricity producer and provider. “Fuel cannot be relied upon in this adventure because it comes from other countries,” he says.
ESCOM’s own public relations officer, George Mituka, concedes the agency doesn’t have a backup plan for scenarios where Malawi faces shortages in imported fuel to power the generators. For the moment, Malawians are waiting in hope. But already, there’s a fear lurking for many: that the diesel generators may just prove another road to nowhere, in the country’s quest for a permanent fix for its energy woes.
- Samuel Majamanda, OZY Author Contact Samuel Majamanda