Legal Requirements for Electricity Generation and Transmission in Malawi.
Ahmed Mussa (Head of Legal – Transaction Services)
- Introduction
Malawi is a landlocked southeastern African country bordering Tanzania, Mozambique, and Zambia. For a developing country such as Malawi, electricity supply is essential for its development goals. This fact is against the background that electricity supply is significantly deficient most times than not.[1] According to the World Bank statistics, only 18.02% of Malawians had access to electricity in 2018.[2] Generation of electricity is conducted by the Electricity Generation Company (Malawi) Limited (EGENCO).[3] EGENCO was formed following the unbundling of the Electricity Supply Corporation of Malawi (ESCOM) Limited into two separate institutions; one for generating electricity (thus EGENCO) and another one for transmission and distribution (thus ESCOM). EGENCO started its operations as a separate and independent company on January 1, 2017. Currently, EGENCO operates four hydropower stations, namely: Nkula; Tedzani; Kapichira; and Wovwe. The Company also operates thermal power plants in Lilongwe, Mzuzu, and Mapanga, Blantyre. Overall, EGENCO has a total installed generation capacity of 372.64 MW, with 350.94 MW from hydropower plants and 21.7 MW from standby diesel power plants.
It is patent that electricity generation in Malawi is majorly hydro-powered, and it is vastly inadequate.[4] Therefore, there is an urgent need to revitalize electricity generation and transmission to meet the growing demand of the developing economy and concomitant industrialization.[5] There is excellent investment promise for Independent Power Producers (IPPs).[6]
This commentary shall discuss the procedure and requirements for licences to generate and transmit electricity in Malawi.
- Who regulates electricity and energy in Malawi?
Laws governing the generation and transmission of electricity in Malawi are the Energy Regulation Act, the Rural Electrification Act, and the Electricity Act. The Electricity Act provides for the licensing for electricity generation, transmission, and distribution. The Energy Regulation Act establishes the Malawi Energy Regulatory Authority (MERA) as the regulator for the electricity and the energy sector in Malawi. The MERA also issues various licences for the generation and transmission of electricity in Malawi.
- Procedure and Requirements for Licences
To be engaged in the supply of electricity in Malawi, a person must obtain either a generation, transmission, importation, exportation, distribution, and single buyer licences.[7] A licencee can only hold one type of licence at any given time.[8] The applications for these licences are made to MERA in a prescribed manner.[9] MERA advertises the said application, and the applicant bears the costs of advertisement.[10] These applications must be accompanied by prescribed and Gezetted application fees by the Authority.[11] The applicant must further furnish a schedule of the proposed tariffs to be charged customers.[12]
Rural electrification activities are also required to be licenced by MERA.[13] An applicant for the rural electrification activities must apply for a Rural Electrification Licence (REL).[14] Once the REL has been granted, the holder may apply for other licences such as; generation licence, distribution licence, or renewable energy licence in the prescribed form under the Rural Electrification Act. For MERA to issue these licences, the applicant must satisfy the stipulated requirements such as; having access to financial, technical, and human resources to enable them to install and operate a rural electrification scheme; valid accreditation certificates issued by the Malawi Bureau of Standards, among others.
4 Concluding remarks
In conclusion, the ESCOM and EGENCO cannot meet the Malawian citizens’ electricity demands and growing industries. There is a rising need for independent electricity generating and transmitting entities to come forth and invest. My next commentary shall discuss this investment opportunity in great detail.
[1] An Overview of the Energy Sector in Malawi Gregory E.T. Gamula, Liu Hui, Wuyuan Peng School of Environmental Studies, School of Economics and Management, China
[2] The World Bank “Access to Electricity (% of population) – Malawi” (2018) The World Bank <https://data.worldbank.org/indicator/EG.ELC.ACCS.ZS?locations=MW> (accessed 07-01-2021)
[3] is a limited liability company incorporated under the Companies Act (Cap. 46:03) of the Laws of Malawi on 7th September 2016
[4] Privacy Shield Framework “Malawi-Energy” < https://www.privacyshield.gov/article?id=Malawi-Energy#:~:text=Hydro%20electricity%2C%20fossil%20fuels%20and,biogas%20and%20renewable%20power%20generation.> (accessed 07-01-2021)
[5] An Overview of the Energy Sector in Malawi Gregory E.T. Gamula, Liu Hui, Wuyuan Peng School of Environmental Studies, School of Economics and Management, China
[6] Privacy Shield Framework “Malawi-Energy” < https://www.privacyshield.gov/article?id=Malawi-Energy#:~:text=Hydro%20electricity%2C%20fossil%20fuels%20and,biogas%20and%20renewable%20power%20generation.> (accessed 07-01-2021)
[7] Section 3(1) of the Electricity Amendment Act, 2016
[8] Section 4 of the Electricity Act, 2004
[9] Section 5 of the Electricity Amendment Act, 2016
[10] Section 6 of the Electricity Act, 2004
[11] Section 6 of the Electricity Act, 2004
[12] Section 6 of the Electricity Act, 2004
[13] Section 24 of the Rural Electrification Act, 2004
[14] Rural Electrification Regulations, regulation 3
