This National Compact for Malawi is a sectoral framework built on the approach outlined in the Africa Region Energy Compact to reaffirm the Government of Malawi’s commitment to implementing critical actions to ensure affordable, reliable, and clean energy services while substantially increasing the share of renewable energy in the country’s energy mix. It identifies the key challenges to achieving these objectives and sets out the Action Plan to address them. It sets out Malawi’s vision and commitment to increasing access to electricity, promoting clean cooking solutions, and increasing the share of renewable energy by 2030. The National Energy Compact for Malawi organizes its principal measures around 5 pillars, with the main objectives of expanding electricity access, accelerating clean cooking, increasing renewable energy, mobilizing private investment, and improving the financial and operational sustainability of the power sector. The main measures are as follows: (i) expansion of electricity generation and reduction of costs, particularly from renewable sources, while strengthening transmission and distribution infrastructure; (ii) expansion of regional electricity integration and power trade to strengthen interconnections with Mozambique, Zambia, and Tanzania, and participate more actively in the Southern African Power Pool (SAPP) and the East African Power Pool (EAPP). The strategy includes establishing a dedicated electricity-trading department and revising the power-market framework to permit electricity exports. Regional interconnectors are intended to improve system reliability and redundancy and facilitate cross-border electricity trade; (iii) expansion of grid and off-grid electricity access to raise overall electricity access to 70%, combining grid expansion with distributed renewable energy (DRE), Solar Home Systems (SHS), and mini-grids. The strategy includes using innovative financing mechanisms such as electric cooperatives, bonds, climate finance, and energy-transition financing; (iv) electrification of public institutions and productive sectors, including schools, health facilities, agricultural sites, mining operations, tourism, and industry. The strategy is to strengthen coordination among ministries and align energy investments and donor support with national development priorities; (v) transformation of the clean cooking sector to ensure 75% of households have access to cleaner cooking by 2030, reducing dependence on traditional biomass and expanding advanced woodstoves, LPG, electricity, biogas, and ethanol/paraffin solutions; (vi) standards and environmental management for off-grid solar, adopting the standards contained in the draft Framework for Enforcing Standards for Renewable Energy Technologies and developing implementation guidelines for managing e-waste from off-grid solar equipment and batteries; (vii) private-sector participation in the energy sector, maintaining appropriate tax and import-duty incentives, reviewing the National Energy Policy and Electricity Act to facilitate private participation in transmission and alternative distribution models such as cooperatives and private concessions, streamlining PPP arrangements, and prioritizing fiscal support for high-impact strategic energy projects; (viii) innovative financing for off-grid energy and clean cooking, granting subsidies, credit lines, access to foreign exchange, financial support for private mini-grid development, and carbon-finance mechanisms designed to make clean-energy technologies more affordable and commercially viable; (ix) energy efficiency and affordability measures while reducing demand and improving system efficiency. Strategies include free or subsidized connections, grid densification, ready boards, on-bill financing, Solar Home Systems for less privileged households, tariff reforms, and efficiency programmes; (x) institutional and governance reforms of utilities, concentrating on core functions, outsourcing non-core functions, building staff capacity, and improving leadership and management capabilities; (xi) digitalization and reduction of electricity losses to protect revenues and reduce operating costs. Measures include digitalizing customer databases and metering, completing GIS mapping of network assets, improving management dashboards, and establishing improved monitoring systems; (xii) climate mitigation and cleaner energy transition, promoting increased renewable generation and reduced dependence on fossil fuels and unsustainable biomass.
Malawi · 2025-01-01