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Article first published in ICLG . Contributors to the article: Shabir Latif, S.C., Hamza Latif, Omega Sambakunsi from LEX Africa member Sacranie, Gow & Company, Malawi
1.1 What is the basis of renewable energy policy and regulation in your jurisdiction and is there a statutory definition of ''renewable energy'', ''clean energy'' or equivalent terminology?
Renewable energy policy and regulation in Malawi stems from the Malawi Growth and Development Strategy III (MDGS), National Energy Policy 2018 (NEP) and the Malawi Renewable Energy Strategy 2017 (MRES).
The goal of the NEP is to establish a guiding framework including policy and strategic direction for achieving increased access to affordable, reliable, sustainable, efficient and modern energy for every person in Malawi. The NEP emphasises the importance of private sector participation in the energy sector and providing an environment conducive for such participation, in the form of direct investment, public private partnerships (PPPs), independent power producers (IPPs) or other participation vehicles. The NEP further emphasises sustainable and clean energy accessible to all. Energy efficiency is another priority area of the NEP. The objective of the NEP is to increase access to modern, clean, affordable and reliable energy.
MRES sets out the priorities and actions to achieve "Universal access to renewable electricity and a sustainable bioenergy sector" in Malawi, and specifies strategies targeting on-grid renewables, off-grid solar, clean energy mini grids, and bio energy.
The energy sector in Malawi is governed by the Energy Regulation Act, Electricity Act, and the IPP Framework. Renewable Energy is defined in the Energy Regulation Act as "sources of energy available to mankind arising from natural processes in the interaction between the sun and the earth''s surface and regularly replenished and these include the sun as the primary renewable energy resource and the secondary renewable energy resources that derive from the sun including wind energy, hydro, ocean thermal, ocean wave, ocean tidal and electricity from photovoltaic effects, biomass, geothermal, etc.".
1.2 Describe the main participants in the renewable energy sector and the roles which they each perform.
The Ministry of Energy oversees the energy sector and establishes energy policies and sets strategic direction for the sector.
The Malawi Energy Regulatory Authority (MERA) is the regulatory body mandated to grant licences for electricity generation, transmission, distribution and sale of electricity in the energy sector, as well as issuing the single buyer licence. MERA also regulates electricity tariffs, mediates and arbitrates any disputes falling under its mandate, and oversees the energy sector overall.
The Electricity Supply Corporation of Malawi Limited (ESCOM) is a state-owned entity and is the system market operator, holds the single buyer licence, is responsible for transmission and distribution, and the sale of electricity to the public. ESCOM performs the single buyer function and is mandated to enter into power purchase agreements, grid connection agreements, transmission connection agreements etc. with the IPPs.
The Electricity Generation Company (EGENCO) is a state-owned electricity generation company and is the largest generator of electricity in Malawi.
The Malawi Rural Electrification Programme (MAREP) implements the rural electrification programme and develops and updates the renewable energy master plan considering area specific requirements.
The Malawi Environment Protection Authority (MEPA) reviews the Environmental and Social Impact Assessment and grants project approval.
The Ministry of Local Government is responsible for physical planning and provision of local Authority''s land rights, including any land resettlement.
The Ministry of Lands facilitates the acquisition of land for energy infrastructure development.
The National Water Resources Authority (NWRA) is responsible for regulation and management of water resources and issuance of permits for hydro power projects.
1.3 Describe the government''s role in the ownership and development of renewable energy and any policy commitments towards renewable energy, including applicable renewable energy targets.
Firstly, the Government of Malawi, through the Ministry of Energy, is responsible for policy formulation and implementation, as well as ensuring there are effective energy legislation and policy frameworks in place. The Ministry of Energy has established an IPP framework for private sector development in the renewable energy sector, to provide a conducive environment and framework for awarding and implementing renewable energy projects in Malawi.
The Government, through the Minister of Finance, provides sovereign guarantees to Independent Power Producers for the development of power generation projects, and is responsible for negotiating the implementation of such projects in Malawi.
The Government has, through the Malawi Revenue Authority, provided tax incentives for priority sector industries, which includes the electricity generation sector.
Through EGENCO, the Government, owns, operates and maintains hydro and solar power plants in Malawi.
Lastly, the Government also enters into PPP agreements for the development of power projects, such as the 350MW Mpatamanga Hydro Power Project. The Government has also awarded IPP projects on a Build Own Operate Transfer basis.
2.1 Describe the market for renewable energy in your jurisdiction. What are the main types of renewable energy deployed and what are the trends in terms of technology preference and size of facility?
The overwhelming majority of the electricity generation mix in Malawi is dominated by hydropower, which accounts for up to 90% of the entire electricity generation capacity of Malawi, which is mainly produced by EGENCO. However, there are other projects in the pipeline including the 350MW Mpatamanga Hydro which is a World Bank funded PPP, as well as other IPPs such as 8.5MW Mulanje Hydro (operational), 3MW Cedar Energy Hydro (operational), 41MW Mbongozi (under development), among other projects which are available under tender process, consisting of 100MW to 280MW.
The Wind sector is an underdeveloped sector in Malawi, with only one project reported to be under development of 50MW as part of the first phase. There is a lack of research and data relating to potential wind sites in Malawi. Further, there are potential opportunities in the wind sector.
Coal has not been used as an energy source for electricity generation, despite the country having proven reserves. The main challenges facing Coal Power Generation is the lack of funding available due to environmental concerns on climate change. However, given the impact the climate has had on hydro, the Government may consider an IPP''s investment in a coal fired power plant.
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