Rural Electrification in Malawi

1. Project Submission for Finacing for Development
By Elsie Elizabeth Munthali
Photo by Stig Enemark

2. The United Nations in September, 2015
adopted the Sustainable Developments
Goals. One of the Goals, Number 7 calls for
provision of affordable and clean energy.
Malawi, as a member of the United Nations,
is expected to achieve this goal by 2030.
This artifact, therefore, highlights how Malawi
can achieve rural electrification taking into
consideration the concept of Financing for
Development.

3. Source: Grassroot Soccer
General Indicators:
Region: South Eastern Africa
Surface area: (sq km) 118484
Population (est.) 16,829,000
Population density (per sq km) 142.0
Capital City: Lilongwe
Currency: Malawi Kwacha (MWK)
Economic and Social Indicators:
GDP per capita (current US$ in 2013) 314.5
Energy production, primary (Petajoules in 2013) 86
Energy supply per capita (Gigajoules in 2012) 6.0
Exports (million US$ in 2013) 1208.0
Imports (million US$ in 2013) 2844.6
Balance (million US$ in 2013) 1636.6
Major trading partners (% of exports in 2013) Canada (11.5), Belgium (8.3), South Africa (7.6)
Major trading partners (% of imports in 2013) South Africa (21.7), Mozambique (12.1),
China (9.3)
Population growth rate (average annual % from 2010 to 2015) 2.8
Source: The United Nations

4.  In 2008 less than 1% of rural |population had electricity
 Total demand for energy per sector in 2008 was as below:-
 Population distribution by source of energy for lighting and cooking
Source of Energy Cooking Lighting
Charcoal 8 0
Electricity 2 7.2
Firewood 88 2.6
Gas 0 0
Paraffin 1 85.7
Candles 0 3.2
Others 1 1.3
Sectors Energy Demand by type of Fuel Total % of Total
Biomass Coal Electricity Petroleum
Household 127,574 5 1798 672 130,049 83.2
Industry 18,625 11.9
Transport 270 15 35 5640 5960 3.8
Service 452 174 477 558 1661 1.1
Total 138,300 3675 4320 10,000 156.29
% of Total 88.5 2.4 2.8 6.4 100
Source: National Biomass
Energy
Strategy Document, 2009
Source: Malawi Census Main Report, 2009

5.  Geographical - Malawi is more than a 1000 km long. Covering this distance with electricity
grid is a challenge.
 Demographics – More than 75% of Malawians are in the rural area.
 Resources - Rural electrification is not cheap and Malawi being a Least Developed Country
does not have the resources to provide electricity to the rural.
 Infrastructure – Most rural areas in Malawi have limited infrastructure such as road
networks as well as telecommunication
 Economics - Disposable income in Malawi is very low as such cannot afford high electricity
tariffs.
 Reliability of electricity - Malawi electricity is hydro generated as such is affected by issues
of siltation and rainfall.
 Housing structures – Rural structures are grass thatched and can be a hazard.
 Technologies – Although Malawi is migrating to solar energy, the countries still relies of
hydro electricity. The main challenge is that most of the new technologies are note as
reliable.

6.  For the sake of rural development – various
studies have shown a direct link between energy and
development and households that use energy tend to
increase their incomes.
 For Industrialization purposes - Areas that have
electricity tends to be industrialize.
 For Security Reasons - crime is reduced in areas that
have electricity
 Environment and Pollution – Use of charcoal damages that environment and pollutes
the air.
 Health – constant burning of charcoal affects the lungs and persistent use of candles damages
. Lack of electricity also affect provision of medicines and vaccines in rural areas.
Source: Unknown

7.  Support from the Government of Malawi
 The Government may review its legal framework to allow for more players in the electricity systems and
consolidate the operations of the players in the systems;
 Offer Incentives to providers of rural electrification;
 Offer finance to supply the electricity;
 Develop strategic and bankable projects;
 Offer technical assistance to electricity companies;
 Negotiate international supplying contracts wish such countries as Mozambique and Democratic Republic of Congo
that already have excess capacity.
 Support from national energy supplying institutions
o Institutions such as the Electricity Supply Commission of Malawi, who are already offering electricity to Malawians,
may be encouraged to offer electricity to the rural areas by being given incentives;
o Decentralisation of its operations to allow for stand alone power generation;
o Allowing other actors in the electricity industry to be connected to the main grid in order to buy and sell electricity
for rural use; and
o Adopting new technologies other than depending only on hydro .
 Identifying other sources of finance
 Working with Multilateral Financing Institutions;
 Working with private sector organisation and the diaspora that finance rural electrification programmes;
 Negotiating for bilateral and multilateral aid from donor agencies;
 Working with philanthropists who can bring new technologies to the rural communities; and
 Working with Non Government Organisation that offer financing as well as technical assistance.

8.  Domestic Resource Mobilisation - The Government of Malawi needs to increase
resources bases in order to fund rural electrification. This can be in a form of a levy on electricity as well
as increase the number and range of people paying tax. The Government may also reduce the amount of
subsidies it offers to other players in the systems.
 Official Development Assistance - Malawi’s budget is 40% funded by ODA. The
country therefore needs to develop strong bilateral relations with ODA countries and institutions in order
to fully benefit from the resources provided.
 Multilateral Financing Institutions – Malawi has developed very good relations with
multilateral institutions. The country can therefore work closely with institutions such as the African
Development Bank, the World Bank, the International Monetary Fund and the European Investment Bank.
 Non Governmental Organisations (NGOs) – There are various NGOs working
in the field of electrification. Malawi could develop close relations wish such NGOs in order to secure
financing for rural electrification. Some countries such as Luxembourg provide a part of its development
assistance through NGOs.
 Private Sector Resources – Considering the fact that returns for the private sector will
be low, most of the resources will be in a form of social responsibility. There are, however, resources that
are set aside by the private sector for research and promotion. Malawi could also benefit from such
resources.
 Philanthropists – This is another very important source for Malawi. The country should identify
a number of philanthropists who are willing to assist the country in its development efforts. Already, a
number of billionaires such as the Bill and Melinda Gates as well as Mark Zuckerberg have offered their
resources to supporting clean energies.

9. Thank you