Africa-Press – Malawi. Quay Energy Corp (Aus) Pty Ltd has dismissed Finance and Economic Affairs Minister Sosten Gwengwe’s claims that it is struggling to find finances to roll out the Salima-Lilongwe Water Project. On Wednesday, Gwengwe indicated that Quay Energy has been struggling to raise the necessary financing for the Salima-Lilongwe Water Project.
But, in a statement released Thursday and signed by Quay Director Anthony Leenders, the company says the truth of the matter is that Quay has been in constant negotiations with the Government of Malawi since November 2021 to agree on terms of the financing for the project.
Leenders said while it may appear that the negotiations have taken an unreasonably long time, this has been necessitated by the need to ensure that all local legal requirements are fully complied with and that the settled terms are agreeable and beneficial to all parties to the transaction.
“Quay wishes to confirm that the correct status of this transaction is that the final drafts of all contractual documents have been submitted to the government of Malawi for its final vetting and possible execution. Once the contractual documents are executed, disbursement of the loan amount will commence. As is clear from the foregoing, if at all there has been a delay in the conclusion of the transaction [it has nothing to do with us].
“In fact, an examination of the correspondence between the representatives of Quay and the Government of the Republic of Malawi will reveal that Quay has been anxious to have the transaction concluded as soon as possible,” the statement reads.
But Gwengwe said Thursday that if debt financing is proving difficult, equity is another option on the table. He said the government is not signing the agreement as Quay has changed and increased the interest from 1.5 percent to 3.5 percent, which is way expensive for Malawi.
“We are considering [the] equity option. So, people can buy shares in the company and get their dividend from the sale of water,” Gwengwe said.
The scope of the contract is for the extraction of water from Lake Malawi to Lilongwe, surrounding areas and town centres along the M14 Lilongwe-Salima Road.
The project also involves abstraction and treatment of 100,000m3/ day water from the lake in Salima and transportation of the treated water through a 120 kilometre transmission pipeline.
The contract required the contractor, Khato Civils and South Zambezi, to identify a financier of the project while the government’s obligation was to issue a sovereign guarantee for the loan.
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