Thoughts on the Energy Situation in Malawi

Malawi is among the least electrified countries in the world, with an electrification rate of 9%, shrinking to only 2% in rural areas. About 14 million people do not have access to electricity in Malawi, and upwards of 85% of the population is reliant on biomass as their primary source of energy. Wood and charcoal use is a major driver of deforestation, leading to the destruction of an estimated 75,000 hectares of forest and woodlands annually (IRENA Energy Country Profiles 2010). Malawi is also among the poorest countries in the world, and the lack of infrastructural development reflects that.

Malawi is caught in a vicious cycle of underdevelopment that is characteristic of much of the underdeveloped world. It is a country in desperate need of income and revenue generation from the development of infrastructure, industry, and the agricultural sector, but with such pervasive impoverishment, lacks the revenue to invest in establishing and improving these sectors. The reasons for this are manifold; poor governance, corruption, low domestic industrial capacity – the list is long. That’s not to say there are not opportunities and vehicles within the country to drive growth and generate income. There is no doubt that there are many, but without sufficient investment capital and a lack of domestic capacity to grow certain key economic sectors, the outlook for socioeconomic development in Malawi is not good. Malawi needs investment from outside of its borders to stimulate the creation of key economic sectors and services if it is to begin to step out of the persistent state of poverty it has experienced throughout the entire existence of the country.

While I was in Malawi, Parliament was debating the unbundling of the national electric utility, Electricity Supply Corporation of Malawi (ESCOM). Currently, ESCOM is the sole player in the electricity market, owning and operating all aspects of power generation, transmission and distribution of electricity in Malawi. Eliminating the monopoly that ESCOM has on the electricity market is seen by many as a necessary step to opening up opportunities for foreign companies and investors to come in to the country and develop new electricity generation capacity. Increasing the availability of electricity is vital for the industrial and economic development of Malawi, as well as to increase access to many households and small to medium enterprises that could benefit greatly from electricity access. But these efforts alone to expand centralized electrification and the national grid will only make a small dent in the much broader and complex issues of energy poverty in rural areas that plagues the majority of the population.

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