Mining & Trade News

EGENCO says it is uncertain on when one of its four machines at Kapichira Power Station will get back online as its spare parts are failing to find a flight through which they can be shipped from Germany due to the Corona Virus outbreak, which has culminated into the suspension of many international flights.

This was revealed on Friday March 27 during a familiarisation tour of the power Station by the newly appointed Minister of Energy Atupele Muluzi.

Egenco CEO William Liabunya said the power generation company is currently maintaining two machines at Kapichira site that contribute 64.8MW to the national grid but spare parts for one of the machines are failing to arrive in the country from Germany where they were manufactured due to cancellation of flights amidst COVID-19 pandemic.

Liabunya said: “The company ordered some spare parts to be manufactured in Germany, and we are told that they are ready, but due to the pandemic it has been difficult to transport the parts into the country, and we were also anticipating commissioning engineers for these parts to come from Germany whose travel depends on the COVID-19 situation,” he said.

“The pandemic has also affected the country’s power construction projects including Likoma and Chidzumulu Island Solar hybrid projects which have been halted as the contractor is from China and is failing to ship in some required equipments.”

However, Liabunya said EGENCO is, currently, installing repaired parts of one machine that underwent specialized repairs in South Africa and arrived in the country on Wednesday March 25.

“At least we are on course of installing repaired parts for one of the machines that have arrived in the country before movement restrictions were effected in South Africa and we are expecting to complete this task within the next 10 days, where upon its completion 32.4MW will be added to the national grid,” he said.

Meanwhile Egenco is set to review its quarterly strategic plan, in which among others, it is to table various power projects including Salima Solar and Kamwamba Coal fired.

Muluzi commended EGENCO’S efforts made to install and repair malfunctioning machines which he said will help to mitigate load shedding.

“It was extremely important as a Minister of Energy to ascertain what is really causing continued blackouts in the country but good news is that parts are in, being fitted and an additional 32.4MW will be added to national grid in the course of a week or so,” he said.

Muluzi reiterated that his Ministry is also working with ESCOM and other key stakeholders to find long lasting solutions to load shedding as well as ensure more reliable power.

Malawi’s Ministry of Transport and Public Works has issued new regulations on public transportation as one way of preventing the spread of the global coronavirus pandemic.

This development comes barely a week after the Malawi government declared a national state of disaster and banned gatherings of more than 100 people.

The Ministry has set out some limitations and directives to public transportation on water, rail, road and air.

On rail transport, the Ministry has limited the number of passengers in the economy class section from 90 to 40 and from 52 to 28 passengers for the business class. Road transportation service providers have been directed to reduce the number of passengers to 60 % and water vessels are to reduce passenger capacity to 50%.

According to the press release signed by the Minister of Transport and Public Works Ralph Jooma, all international flights are suspended effective April 1, 2020.

“All international flights are suspended effective 1st April 2020 except for those aircrafts carrying health personnel, essential health equipment, emergency relief items, returning residents and cargo,” reads the press release

All public transportation service providers have since been directed to disinfect their cars and vessels before the commencement of any trip and to make sure that passengers wash hands before boarding a ship, bus or train.

The Ministry has further directed public transport service providers to have all their crew wear protective face masks and not to allow passengers carry any animals on any public vehicles.

Meanwhile, the ministry has also said that no public transportation service provider should allow any passenger showing general symptoms of COVID-19.

“Those with common flu and showing general symptoms of COVID-19 should not be allowed to use any public transport service,” says Jooma.

He says government inspectors have been deployed to enforce the implementation of the measures.

In the wake of the Covid-19 outbreak which has prompted countries to close boarders in so doing disrupting imports of essential commodities, the Malawi Energy Regulatory Authority (MERA) saysMalawi has sufficient internal fuel stock cover for approximately two months.

In a statement issued on its Facebook page, CEO for MERA Collins Magalasi explains that the country has sufficient petrol stock cover equivalent to 43 days and diesel of up to 83 days.

Magalasi says: “MERA would like to inform the public that the country continues to receive Liquid Fuels and Gas (LFG) from the ports of Beira, Nacala and Dar es Salaam without restraint; and stakeholders in the fuel supply industry are alert to ensure an effective and efficient response to any impending disruption to LFG supply.”

He says although the country has not registered any case of Covid-19, the pandemic requires a strategic approach in preparedness, management and recovery of a potential fuel and gas supply disturbance.

Magalasisays as one way of fighting the virus, MERA has activated the National Emergency Response Plan that will involve working with the National Liquid Fuels and Gas Emergency Management Committee and Operations Management Group which are provided in the response plan.

He applauds all key stakeholders and players in the fuel sector for their rolein facilitating sufficient fuel stock in Malawiwhile the country is under the threat of the pandemic.

“MERA thanks all fuel importers, transporters, oil marketing companies, retailers, government ministries and departments, banks and all stakeholders for the great coordinated approach that has been taken and resulted in our country having healthy fuel stocks at a time that the world is under the coronavirus threat,” he says.

Magalasipledges to continue updating the public of the fuel supply situation in the country when necessary.

The COVID-19 pandemic has resulted in the declining of fuel prices on the international market forcing countries like Malawi to lower its fuel prices.

MERA recently slashed diesel prices from K924 per litre to K887 per litre while the price of paraffin was reduced from K710 to K693 per litre but that of petrol has been maintained at K930 per litre.

The Authority stated that the changes in the prices of diesel and paraffin were in line with the Automatic Pricing Mechanism (APM) where the two fuel’s landed costs were beyond the plus minus five percent trigger limit. 

Malawi Government’s strategic fuel reserves have a storage capacity of 60-million litres translating to 60 days’ stock cover, and there are plans to raise the capacity to 90-million litres thus 90 days of fuel stock cover.

The Mbelwa District Council has closed second hand clothes and cattle markets in the district as one way of preventing the spread of the global corona virus disease (COVID-19) pandemic into the district.

In a memo addressed toMzimba residents,the Councilsays the ban follows Malawi Government’s declaration ofthe state of disaster due to Coronavirus threat.

“In light of the declaration, Mbelwa District Council, in its full council meeting on March 25, 2020, has introduced a ban to prohibit operations of Salaula markets and cattle markets within the boundaries of Mzimba District forthwith,” reads the memo from the Council.

The ban has been received with regret by vendors in Mzuzuwho have expressed concern over loss of business.

“The ban is a big blow to my business as I usually go to different areas of Mzimba to sell second hand clothes to make money to take care of my family,” says Maria Gondwe, who sells second hand clothes.

Malawi is yet to record a case of the COVID-19 pandemic, which was discovered in the People’s Republic of China in 2019.

COVID-19 is affecting 199 countries and territories around the world and one international conveyance (the Diamond Princess cruise ship harbored in Yokohama, Japan).

Information from the World Health Organisation indicates that most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment but older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.

The best way to prevent and slow down transmission is to be well informed about the COVID-19 virus, the disease it causes and how it spreads.

To protect oneself and others from infection, it is recommended to wash hands or use an alcohol based rub frequently and avoid touching the face. 

The COVID-19 virus spreads primarily through droplets of saliva or discharge from the nose when an infected person coughs or sneezes, so it’s important that one also practices respiratory etiquette (for example, by coughing into a flexed elbow).

Currently, there are no specific vaccines or treatments for COVID-19. However, there are many ongoing clinical trials evaluating potential treatments.

The Malawi Government is scouting for investors to manage Lifupa Ecotourism Lodge in Kasungu National Park in a long term concession agreement.

Malawi’s Department of National Parks and Wildlife is, currently, requesting for expressions of interest from investors to take over management of the lodge complemented by a campsite, which accommodates 35 visitors and three existing tents.

“What adds to the beauty of the Lodge is the presence of Lifupa Damfacing the chalets and bar; reception and its information room,” says the Department in a Press Statement.

It states that among the recent additions at the site is a swimming pool within its vicinity, and the lodge has also staff houses including the Lodge Manager’s house.

The lodge is currently running at around 15 to 25% occupancy rate, which is on the lower side.

The Department says the objectives of the concession include to produce a tourism product within the framework of sustainable and responsible tourism for the optimum benefit of the stakeholders; rehabilitate the lodge facilities to the required standards so that the lodge remains attractive for ecotourism;improve revenue collection for the park; and help achieve conservation of the natural resources in and around the site and activity areas.

The concessionaire is expected to assess extent of damage on Lifupa lodge facilities, compile a report on the damage and recommend appropriate interventions, and cost the proposed interventions and finance and rehabilitate the facilities.

The Department says the preferred concessionaire should have at least three years’ experience in managing and operating an ecotourism lodge or related ecotourism ventures in protected areas, two years’ experience in ecotourism business marketing, well qualified staff, and experience in wildlife conservation and ecotourism development.

Electricity Generation Company of Malawi (EGENCO) has contracted German Company Fichtner GmbH to execute consultancy services to review and update the feasibility study for Kammwamba Coal Fired Power Plant in Neno.

EGENCO says in a statement that Fichtner emerged a preferred consulting firm for the assignment after submitting a Unit Price for the contract of 925,536 Euros.

The Company says unsuccessful bidders wishing to request for a debriefing session may submit their request in writing before March 24, 2020.

The Kammwamba project, which is expected to utilize coal imported from Mozambique’s Moatize Coalfield, is designed to produce 300MW of electricity.

Fichtner is the leading independent engineering and consulting company for the energy and technical infrastructure projects in Germany.

Fichtner technical discipline includes completing in-house engineering of hydropower plants of all types and capacities, comprising feasibility studies, design, procurement and site supervision both Greenfield and rehabilitation among other activities.

Initially, Government tried to engage China Gezhouba Group of company to construct the coal fired power plant with funding from Export and Import (Exim) Bank of China.

Currently EGENCO operates four hydro power stations, Nkula, Tedzani, Kapichira and Wovwe.

It has total installed capacity of 372.64MW with 350.94MW from hydro plants and 21.7mw from standby diesel powered plants.

EGENCO was established following the unbundling of Electricity Supply Corparation of Malawi (ESCOM).

Minister of Natural Resources, Energy and Mining Bintony Kutsaira has stressed the need for the Southern Africa Power Pool (SAPP) member states to develop more power generation projects to ensure that the region has adequate power to support economic development.

Kutsaira made the remarks when he officially launched this year’s 54th SAPP meetings in Lilongwe.

He said the generation of adequate power can spearhead development projects that help in boosting economies in the Southern Africa Development Community (SADC) member states where power shortfalls are rampant.

He said: “In order to keep pace with developments taking place in our countries, it is incumbent upon us, as countries, to invest in electricity supply infrastructure more-so to avoid power deficits in future.”

“The SADC region’s economies are continuing to grow in fulfilment of the SADC industrialisation thrust and hence the region needs more power.”

Kutsaira encouraged experts in the energy sector to continue applying their efforts to harness solutions that will keep the lights on, commerce ticking, industry running and agriculture flourishing even in these challenging environments.

He stressed that electricity remains one of the critical driving forces for economic development and that the experts are at the centre of making it work.

Kutsaira urged SAPP to put in place enough measures to attract independent power producers (IPPs) to invest in the region.

He said it is a welcome development that SAPP already started enticing IPPs through revising membership categories to allow IPPs to participate in electricity trading in SAPP.

“I, therefore, urge you, SAPP member states, to continue to cooperate with these new players so that together you pursue the goal of providing reliable, sustainable and affordable power to all our citizens in the SADC Region,” he said.

Kutsaira also said Malawi is looking forward to becoming a beneficiary of SAPP through the Mozambique-Malawi Power Interconnector Project which is on course.

ESCOM CEO Alexon Chiwaya said Malawi is ready for the interconnector having improved its transmission and distribution infrastructure using financing from the Millennium Challenge Corporation (MCC) of the US Government.

“Through the MCC Malawi Compact, we recorded an improvement in the system infrastructure including: construction of 200MVA 400/132kV Phombeya and Nkhoma Substations and; a 400kV transmission line from Phombeya to Nkhoma,” said Chiwaya.

The Phombeya Substation will be the landing point for the 400kV Mozambique-Malawi Interconnection whilst the Nkhoma Substation will be the landing point for the 400kV Zambia-Malawi Interconnection.

He also thanked the World Bank for the financial support rendered through the Energy Sector Support Project (ESSP) which greatly assisted in the reinforcement of the transmission and distribution networks.

SAPP has nine interconnected countries, with a commitment to connect the remaining three member countries, namely Angola, Tanzania and Malawi.  

Standard Bank Group says it expects macroeconomic stability to continue in Malawi in 2020 on the back of normal agricultural season that would support the local currency and sustain low and stable inflation and interest rates.

“We remain committed to ensuring customer satisfaction in all we do. The Group will continue to focus and drive digitisation in order to improve customer experience,” says the Bank in its audited financial results for the year ended December 31.

The Group says it will continue investing for the future while prudent management of risk and liquidity, diversifying balance sheet and maintaining a healthy capital position remains at the core of its operations.

Standard bank registered a profit of about MK15.9-billion for the year, 50% more than the profits for the previous year due to an increase of 12% in the net interest income.

Growth in customer loans and advances was at 32% year on year while financial investments grew by 18%.

“Customer deposits grew by 6% which has contributed to the growth of interest earning assets,” says the Group.

The Group has, however, experienced subdued net interest income due to the declining net interest margins as a result of a decrease of the base lending rate in 2019 to 12.55% from 23% in 2018 while non-interest revenue was at 3% above the prior year due to growth in transaction volumes.

Credits impairments were 62% below prior year due to the declining in the size of the non-performing loan book.

It says: “The decline in credit impairments was due to the Group’s focus on robust credit risk management practices.”

“The group will continue to place emphasis on recoveries of loans previously written off.” On economic highlights, headlines inflation averaged 9.4% in 2019 which was higher than 2.9% registered in the previous year while food inflation remained in double digits and closed in December 2019 at 19.3%.

The Malawi Kwacha continued to lose ground against the United States dollar during 2019 on the back of excess local demand for the foreign currency as the policy rate remained relatively stable in the year closed at 13.5%. As the Standard Bank Group continued to focus on diversifying its revenue base and cost management, earnings per share for the year increased from MK45 to MK68 in 2020.