K77.1bn funding gap stalls Kapichira Dam

Electricity Generation Company (Egenco) says it is facing a $44 million (about K77.1 billion) shortfall for the $84 million rehabilitation of Kapichira Dam, raising fresh concerns over the stability of the country’s power supply. Egenco chief executive officer William Liabunya told the Parliamentary Committee on Commissions, Statutory Corporations and State Enterprises on Friday that feasibility studies and designs for the permanent dam are complete, but the project cannot proceed without securing the remaining funds. Kapichira Dam was destroyed by Tropical Storm Ana in January 2022, taking off 129.6 megawatts (MW) from the national grid and triggering prolonged power rationing of up to 10 hours.

Malawi Government later constructed a temporary dam to restore generation at the hydropower station. Liabunya said Egenco is engaging the Ministry of Finance, Economic Planning and Decentralisation and the World Bank to mobilise resources, with the bank expected to lead other cooperating partners. “We have engaged the Ministry of Finance to lobby donors, and the World Bank is able to lead the donor table.

Through that, we believe we will raise the $44 million shortfall,” he said. “Tendering for the project is expected next month once financing is secured,” he said. The World Bank previously provided $60 million, but the funds were shared with the Electricity Supply Corporation of Malawi (Escom) to repair transmission lines damaged by the storm.

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Minister of Finance, Economic Planning and Decentralisation Joseph Mwanamvekha said he was yet to receive a formal report but stressed the project’s national importance. Treasury spokesperson Williams Banda also said the ministry is awaiting Egenco’s submission, adding that Treasury will engage donors once it receives the concept note and detailed designs. Tropical Storm Ana caused severe damage to Kapichira Hydroelectric Power Station on January 24 2022, washing away the training dyke and breaching the fuse plug. This destroyed key infrastructure, causing the Shire River to bypass the intake, resulting in the shutdown of 129.6MW of generation capacity.

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