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Malawi misses out on US$4 bln SADC power interconnector?

While four of Southern African Development Community enjoy the power sharing facility to prop up industrial and domestic growth, including meeting demand from mining sectors, Malawi, one of the neighbors affected by power deficit, has been left out.

Zimbabwe, Zambia, Botswana and Namibia, four of the 15-member states in the regional bloc have initiated a project to share power amongst each other to meet increasing energy deficit in the region as they all jostle to increase economic developmental programmes under the ZiZaBoNa project.

Under the Southern African Power Pool (SAPP), all member states are expected to initiate power sharing projects in an effort to grow the economies-that all face power shortages to meet the increased demand from domestic and industrial end users.

However, Malawi, despite its growing economy and potential to increase Gross Domestic Product (GDP), is not among the four enjoying the energy facility availed to the other four countries.

According to Nyasa Times, the country’s leading online publication, Malawi has been excluded in the SADC high-priority energy transmission projects valued at more than US$4 billion for promotion and marketing to investors.

Citing information availed to the web-based publication during the just ended 34th Summit of SADC Heads of State and Government held in Victoria Falls, Zimbabwe from August 17-18, the nine projects are at various stages of development and include the flagship ZiZaBoNa Interconnector Project to be implemented by Zimbabwe, Zambia, Botswana and Namibia.

Other projects accorded high priority include the Central Transmission Corridor (CTC), the Mozambique Backbone Project, the Zambia-Tanzania-Kenya Interconnector as well as the proposed Namibia-Angola Interconnector that will connect Tanzania and Angola to the Southern African Power Pool (SAPP).

Power interruptions in Malawi continue to affect both private and public sectors, Nyasa Times adds.

Director of Infrastructure and Services at the SADC Secretariat, Remmy Makumbe said a joint utility steering committee comprising officials from the Zimbabwe Electricity Authority (ZESA) and ESKOM of South Africa has been formed to steer the CTC project and that draft terms of reference for technical and commercial teams have been developed.

The Southern African Power Pool (SAPP), which coordinates the planning, generation, transmission and marketing of electricity on behalf of utilities in the region, completed the tendering process for the ZiZaBoNa project in May 2013 and a number of investors are reported to have expressed interest in developing the electricity transmission interconnector.

The transmission interconnector project has the capacity to increase power trading among participating utilities, as well as providing an alternative route to decongest the existing central transmission corridor that passes through Zimbabwe.

However, in April 2013 Mozambique’s president Armando Emilio Guebuza travelled to Lilongwe to sign a power interconnection agreement with the Government of Malawi.

This energy deal has been discussed for a few years but was dismissed by the former late president Bingu wa Mutharika on the grounds that it would be too costly for the tax payer.

The agreement was amended in January 2013. The two countries, both members of the SADC Southern African Power Pool, agreed to import and export electricity to each other. Previously, Malawi had agreed to only import electricity from but not export to Mozambique, Nyasa Times adds.

One study conducted in 2012 suggested that Malawi loses USD 4,215 million per year due to power outages. This is evidently a challenge for mining operations in the country.

Recently Zambia’s mines energy and water development Minister Christopher Yaluma said there is need to make the power deficit that the region is experiencing into an investment opportunity and make power available and that demand for electricity has increased at an average rate of three Percent per year in the region. It is no secret that the region is currently experiencing a power supply deficit adding that the southern African Power pool members should find a lasting solution. Yaluma urged people to invest in power looking at the availability of natural resources. Yaluma also expressed concern of the inertia that characterises the implementation of projects after meetings, adding that the apathy has made it very difficult to move at a fast rate. He regretted that some projects have been discussed at meetings for a long time and has since urged the participants to change the perception that exists that SAPP meetings are a talking shop.

However, despite SADC having most of the mining activities taking place in various countries, the regulator-SAPP-has seen a decline in electricity exports in the region, and the development of the Zizabona project is intended to reverse this. The envisaged Zizabona electricity interconnector will link Zimbabwe, Zambia, Botswana and Namibia.

The Zizabona project is a key component of the SADC’s regional infrastructure master plan that could involve cross-border projects with a combined investment value of up to US$500 billion over the 15 years from 2012 to 2027.

The African Development Bank, the Development Bank of South Africa, the French Development Agency and Stanbic Bank of Botswana have reportedly pledged to fund the Zizabona interconnector. The agreement, signed and ratified by the four countries in 2008 is worth US$224 million. About US$67 million of equity finance is needed, with US$157 million required for debt financing.

The French Development Agency will provide about US$40million, the Development Bankof South Africa will provide US$50 million and the African Development Bank will meet about 40 percent of the debt financing.

Consultations with financiers are expected to be conducted in October or December 2012, with intended financial proposals due by March 2013.

When fully operational, the Zizabona will, among other things, make it possible for Namibia to import power directly from Zimbabwe. Currently electricity from the Hwange power station is being routed to Namibia through South Africa.

The project is also expected to help decongest the existing transmission corridor that passes through Zimbabwe.

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