Africa-Press – Malawi. Cash-strapped Electricity Supply Corporation of Malawi (Escom) has spent a whopping K117 billion to keep its deal with Aggreko running over the past four years.
Escom Director of Finance Clement Kanyama disclosed this in Lilongwe during a briefing which Energy Minister Ibrahim Matola organised. Kanyama told reporters that K32.7 billion was paid to Aggreko as capacity fee while K4.5 billion was paid as energy cost for the power generated.
He said the remaining K79.8 billion was used for purchasing diesel for running generators since 2018. According to Kanyama, Escom paid Aggreko capacity fees because Aggreko invested in the machines, adding that “whether we run the machines or not, that is not their problem”, he said.
He said, on average, Escom was using K1 billion every month to meet the cost of producing power using generators. Kanyama said such resources would now be used for capacitating Electricity Generation Company (Egenco) for its own stand-by power.
“That is an average. There could be months when we could use the machines more, which meant we would buy a lot of fuel in those months [and] the bill could be more than K1 billion,” said Kanyama, adding that sometimes it was less than K1 billion.
According to Escom, the government contracted Aggreko in 2017 to complement power generation at a time water levels in Lake Malawi had gone down, a development which saw hydro power generating machines working at 60 to 70 percent of their capacity.
But according to Kanyama, now that the water levels have hit record high in 10 years, the machines are back to 100 percent capacity. He said in the absence of Aggreko generators, Escom expects the intensity of power blackouts to increase from four to six hours per day.
However, both Matola and Kanyama dispelled fears that there could be prolonged blackouts after the pulling out of Aggreko, which was providing 78 megawatts to the national grid.
They said Egenco was ready to cover the gap as, among other means, the company also owns generators; as such, there would be no prolonged blackouts. Matola also cited a number of power generating projects under the Independent Power Producers initiative that would add power to the national grid to cover the gap.
He said, after a review was done, stakeholders agreed that the contract had to come to an end because it was expensive and that Escom has been using its revenue to pay the costs.
Aggreko started operating in Malawi in 2018. Aggreko’s contract has been terminated at a time Tropical Storm Ana destroyed some structures Kapichira Power Station, taking off some power from the national grid.
Mathews Kasanda is a journalist who holds a Bachelor of Arts in Journalism from University of Malawi (The Polytechnic). In 2015, Media Institute of Southern Africa awarded him the Best Print Media Education Journalist of the Year accolade. He joined Times Group Newsroom in September 2019.
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