Good afternoon,
This is to further update you that the Ministry of Economic Planning & Development; and the Public Sector Reforms have facilitated an agreement between Electricity Supply Corporation of Malawi (ESCOM) and Electricity Generation Company (EGENCO) pertaining to the dispute on electricity payment arrears which has existed for a long time consequently choking operations of the two institutions.
You may recall that on 7th August, 2020, I held a meeting with ESCOM, EGENCO, Malawi Energy Regulatory Authority (MERA), the Ministry of Finance, the Ministry of Energy and the Public Sector Reforms team to find solutions to the dispute under the ongoing reforms on Parastatal organisations.
It has been agreed that ESCOM should pay K11.7 billion out of the K53 billion which it owes EGENCO by 31st December, 2020. Sixty percent of the balance equivalent to K25.2 billion to be paid by 31st December, 2021. The Ministry of Finance will also facilitate that EGENCO issues a Credit Note for the remaining 40 percent balance. This means no bail out for ESCOM.
You may also recall that another bone of contention was the billing for energy transmitted between ESCOM and EGENCO. To this end, it has been resolved that ESCOM and EGENCO should use the existing metering facilities to determine actual energy transmitted between the two entities effective 17th August, 2020. It has also been agreed that the Ministry of Finance will facilitate the review and amendment of the current Power Purchase Agreement (PPA) and ensure that the new signed PPA is put in effect by 1st November, 2020.
Meanwhile, a Task Team has been set up to drive ESCOM’s turn-around strategy. The Task Team members will come from the following ministries: Ministry of Finance, Ministry of Economic Planning and Development, Ministry of Energy, Ministry of Justice and Department of Statutory Corporations.
Once this is done, the turn-around strategy and the roadmap will be made public and monitored under the Public Sector Reforms Programme in the administration of His Excellency Dr. Lazarus Chakwera, President of the Republic.
After finalising chairing Cabinet Orientation in Lilongwe this afternoon, I will later in the day travel to Blantyre where I will engage individual Parastatal Organisations on the progress of reforms in their organisations.
Tomorrow I will start with Malawi Posts Corporation (MPC), Malawi Broadcasting Corporation (MBC) and Malawi Communication Regulatory Authority (MACRA).
Wishing you a fruitful day.