ASX-listed Intra Energy Corporation, which is developing a 120 MW coal-fired power station in Malawi’s lakeshore district of Salima, has signed a term sheet relating to a power purchase agreement with the Southern African country’s power utility.

CEO Tarn Brereton says the Pamodzi plant will source its coal from its Tancoal mine, in Tanzania, and not from Intra Energy’s Malcoal mine, in Malawi, as previously announced, as the company is mulling over the sale of the mine and its other Malawi subsidiaries.
Intra Energy previously announced that it had suspended mining operations at the Malcoal mine, owing to low sales, as most of Malawi’s coal users opt to import coal from Mozambique.

Malawi is opening up its power market, which is dominated by the national utility – the Electricity Supply Corporation of Malawi (Escom) – to independent power producers (IPPs) to solve power shortages in the country, which are the result of a low generation capacity and over-reliance on hydropower plants on the Shire river, which are susceptible to the vagaries of rainfall patterns.

In total, Malawi has signed term sheet agreements with 27 IPPs that will generate power from coal, liquid fuels, biomass, solar, wind and hydro sources. The IPPs include French company CDEN, which aims to generate 100 MW of solar energy in the north of the country. CDEN has similar projects in Europe and other African countries, including Rwanda, Chad, Tanzania, Uganda, Guinea and the Democratic Republic of Congo.

CDEN CEO Hugues Antoine-Guineseau says the company has earmarked $200-million for the solar energy project, starting with feasibility studies.

Further, a company called Su-KAM Energy plans to build the 41 MW Bongozi hydropower project, on the Bua river. Su-Kam signed a memorandum of understanding with the Malawi government in 2011 through a locally registered special-purpose vehicle, Hydro Electric Power (HE Power).

HE Power conducted both feasibility studies and environmental- and social-impact assessments, concluding these in 2013. “The investor is now looking for financing for the project and it is expected that, once financing is finalised, HE Power will develop the 41 MW Bongozi hydropower plant and connect it to the Escom grid,” says Joseph Kalowekamo, energy affairs spokesperson at the Ministry of Natural Resources, Energy and Mining.

Low water levels in the Shire river, due to insufficient rains over the last few years, have resulted in power shortages, forcing Escom to implement load-shedding.

Malawi generates 351 MW of electricity, compared with peak demand of about 400 MW.