Parliament Endorses Law To Split Escom

Parliament has endorsed a bill to split Electricity Supply Corporation of Malawi (Escom) into two companies to improve its efficiency and revenue generation.

The split will fall under the Power Market Restructuring (PMR) by government which, among others, involves the unbundling or splitting of Escom into two Parastatals; one for generation of power and the other for transmission and distribution.

No change reform for escom

Mutharika and MCC’s Dana Hyde- file photo

Parliament on Tuesday passed the law to foster the splitting of the company, which is aimed at improving access to quality and reliable power in order to stimulate economic growth and reduce poverty in the country.

However, in May this year, President Peter Mutharika contradicted earlier confirmation by top government officials about the split.

Mutharika after meeting Chief Executive Officer for Millennium Challenge Corporation (MCC) Dana Hyde, told the local media that there would be no split but another energy company will enter the market as part of the restructuring of the electricity power market under the power sector reform component of the Millennium Challenge Account Energy Compact project.

Mutharika said the Cabinet Committee on Legal Affairs had already reviewed the amendment of the Electricity Bill and Cabinet will approve it for tabling in Parliament.

Currently Escom generates 351 Mega Watts power generation which serve about 10 percent of Malawians. It is estimated that by 2025, about 30 percent of the population will be connected to electricity as government intends to increase the power generation to more than 2,500 Mega Watts in the next 5-10 years.

Under the Millennium Challenge Account Energy Compact project, Malawi is expected to be connected to the Southern Africa Power Pool (SAPP).

Malawi’s $350.7 million (245 billion Kwacha) MCC Compact is a single-sector program designed to increase incomes and reduce poverty by revitalizing Malawi’s power sector and improving the availability, reliability, and quality of the power supply.

Meanwhile, about 31 independent power service companies have shown interest to help Escom in the energy sector.

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