On Monday Malawi signed two agreements with the European Union (EU) totalling 93 million euros (about K182 billion) in which the EU has committed to financing two projects that respond to the objectives of Malawi 2063.
EU Ambassador to Malawi Rune Skinnebach said the first financing agreement comprises a €55 million concessional loan from the European Investment Bank and a €30 million grant from the EU.
He said the project, which will be implemented by Escom, will construct a new 132 kV line on steel-latticed towers to replace the now unreliable 42-year-old wooden pole-mounted lines. The line serves important domestic, agro-based industries, mining projects and rural growth centres.
The new line will cover 293km starting from the existing Nkhoma substation in Lilongwe and run east to Nanjoka substation in Salima.
It will then extend northwards along Lake Malawi, connecting to existing substations at Nkhotakota, Dwangwa and Chintheche in the Northern Region.
He added that the second financing agreement commits €8 million from the EU’s budget to support civil society organisations in Malawi in their role as actors of development.
“The only sustainable path out of the present difficulties goes through private sector dynamism.
“Creating a business environment that attracts private investments in productive sectors, domestic and foreign, and that encourages businesses to grow, creating jobs, is at the core of our development cooperation with Malawi. The two new initiatives that we have signed are testament to that,” he said.
He observed that improving the business environment is also extremely important for the millions of young people that are unemployed or underemployed.
Finance Minister Simplex Chithyola Banda has since described Monday as a great day for Malawi.
He said the financing agreements are testament to the confidence that development partners have in the leadership of President Lazarus Chakwera.
According to Chithyola Banda, the energy project will support economic growth in the targeted districts by increasing the reliability, security and sufficiency of power supply.
The project, according to Chithyola Banda, will focus on secondary cities of Karonga, Nkhata Bay, Kasungu, Chipoka, Monkey Bay, Liwonde, Luchenza and Bangula to align with Malawi’s development aspirations as outlined in the MW2063.
It also supports the Urbanisation Pillar of MW2063 with a geographical focus on urban and peri-urban areas in the secondary cities where the prevalence of rural-urban migration is notably high.
“The project will explore innovative and scalable strategies for self-employment prospects for unemployed or underemployed youths, on the promotion of greater industry involvement in workforce development and on the creation of decent and green jobs through the piloting of viable business solutions and the establishment of new micro, small or medium enterprises, particularly in the digital, green and circular economy,” Chithyola Banda said.
Escom Chief Executive Officer Kamkwamba Kumwenda said the construction of a new 132 kV line on steel-latticed towers to replace wooden pole-mounted lines will help reduce power outages in the Northern Region.
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