By Wahard Betha
Though the country is struggling to deal with power shortages that are hitting many sectors of Malawi’s economy, there is uncertainty over the construction of the proposed 300MW Kam’mwamba Coal-fired Power Plant at Zalewa in Neno District amidst the global campaign against use of fossil fuels.
Various Civil Society Organizations (CSOs) are advocating for a ban on utilization of coal saying it is a dirty source of energy which is damaging to the environment through air pollution from the power plants.
Mining and Trade Review has established that in light of the global campaign to promote renewable energy sources, many financiers are reluctant to finance the 300MW coal-fired power plant project which is being implemented by Electricity Generation Company (EGENCO).
A feasibility study on the power plant which started in August 2019 was completed by September 2021 with two main components of updating previous techno-economic feasibility study and Environmental and Social Impact Assessment (ESIA) and; local coal resource exploration.
Following completion of the study, EGENCO embarked on seeking financing for the project but is yet to secure funds for the plant whose construction was projected to run from 2022 to 2024.
Public Relations Officer for EGENCO Moses Gwaza could not respond to both emails and calls to comment on the development.
But in a an interview, Coordinator for Chamber of Mines and Energy Grain Malunga tipped the Government to use local resources to fund the project if financial institutions will continue shunning it.
Malunga said: “Government should mobilize local resources to invest in Kam’mwamba Coal Fired Plant project and these resources can be in form pension or insurance funds.
“For your information German has re-commissioned their coal fired plants. It is not about academics, it is about economic development and livelihood sustainability. Thermal power plants need technology innovation and this is possible.”
“Coal will always play a role in steering industrialization and energy generation. Let us be careful against use of climate change initiatives as a means of decarbonizing Africa when it is meant to slow African industrialization.”
Malunga also expressed concern that CSOs and African governments are easily influenced by campaigns that can injure them because they rely on foreign finance and, therefore, stressed the need to start creating wealth using local resources.
In her remarks, Public Relations Officer in the Ministry of Energy Upile Kamoto, however, sounded optimistic that funds will be secured for implementation of the project saying not all financial institutions are reluctant to fund the project.
Kamoto said: “As a country and as stipulated in the National Energy Policy 2018, we need to diversify our sources of energy for power production for efficient and reliable power supply and coal is on the list for achieving this goal.”
“As such the ministry will explore all available options for financing the Kam’mwamba coal fired power plant including local financing.”
Kam’mwamba Coal-Fired power plant project pre-feasibility study was financed by a loan from Export and Import (Exim) Bank of China to the tune of US$667-million project with Lilongwe required to source US$104-million as commitment fee.
The plant which is set to use coal from Moatize in Mozambique to be hauled using rail transport is projected to have a life span of 30 years.
Once fully operational, the plant would help Malawi to diversify from using hydro power which has proved to be unreliable due to problems emanating from climate change.
The project is will be implemented under the Engineering, Procurement and Construction (EPC) model, which is a particular form of contracting arrangement used in big projects where the contractor is responsible for all the activities from design, procurement, construction to commissioning and handover of the project to the end user or owner.
Kam’mwamba project is in line with EGENCO’s diversification objectives where by the company seeks to improve its power generation mix from being 95% hydro based to 76% hydro based in 5 years.