Official Handover of Nkhoma Substation and MCA-M Compact Exposition

I am delighted to celebrate this historic milestone today with Honorable Minister Masi and all of you – the leaders and stakeholders in Malawi’s power sector. I have served in my role as the United States Ambassador to Malawi for close to four years so have been witness to the impressive transformation of Malawi’s power sector not only in infrastructure but also reform and environmental management. The completion of the $350.7 million dollar Millennium Challenge Compact (MCC) Compact and the handover of the Nkhoma substation and central region infrastructure investments are significant milestones in the Malawi-American partnership. For those of you in the power sector and for all Malawians, the successful end of the Compact, demonstrates that the United States and the MCC Compact are delivering on their promise to modernize the power sector and improve the lives of people across this beautiful country.

The fundamental impact of this large scale investment in Malawi will be to provide greater access for all of Malawi to a modern electrical grid. You have all worked tirelessly to transform the power sector and bring economic opportunities a dynamic power sector creates for millions of Malawians. You are the innovators and risk takers who took on the challenge of making the tough decisions over the past five years to improve and reform this sector. I encourage you all to continue with the same rigor in executing aggressive plans to sustain these achievements and implement remaining reforms. There is no more important stimulus for Malawi’s development than a well-functioning and growing power sector, and no more important moment for continued reform than now.

Today is the second of three ceremonies throughout Malawi to celebrate the completion of the five-year MCC Compact.

The MCC investment was ambitious from the start: a bold plan to simultaneously transform power infrastructure, reform its institutions, and improve environmental protection in hydropower production.  All aiming to fulfill our shared goal of reducing poverty through economic growth. Together, we created a solid foundation in the power sector. A foundation that provides ESCOM, EGENGO and MERA with:

  • the power to move energy more quickly and efficiently than before throughout Malawi;
  • the power to identify problems quickly and fix them before the electricity network goes down;
  • the power to better regulate the sector and bring in private investors for generation production; and
  • the power to expand electrification in bustling cities and districts that previously had limited coverage.

From the impressive exposition on display here today, it is clear that the the Compact was not only a success but has also served as a stimulus for growth and innovation in Malawi’s power sector. The Nkhoma substation, handed over this morning to the Government and ESCOM, will serve a critical role in moving electricity more efficiently throughout Malawi.  It will create more reliable and stable power for businesses, industry and families – especially in Lilongwe.  In addition, the substation will serve as Malawi’s point of interconnection with Zambia.   Malawi will no longer be an electricity island.  With improved and expanded access to power, Malawians can exercise their full potential to unify the country in a common effort toward a strong economic future and strengthened productivity.

The American people and the United States Government are proud to have partnered with the Government of Malawi. The Compact development process began in 2008, ten years ago. Today, the celebrations are the culmination of this decade of hard work.

I would, first and foremost, like to thank the Millennium Challenge Account-Malawi, the primary implementers of the MCC Compact. Under the leadership of its Board and their Board Chair, Simon Itaye and its CEO, Dye Mawindo, the MCA-Malawi team and their contractors worked tirelessly to complete this ambitious initiative. I would also like to thank the project partners – the Ministry of Natural Resources, Energy and Mining, ESCOM, EGENCO and MERA – for their dedication to complete the compact projects, and more importantly for their commitment to sustaining these investments and ensuring completion of remaining reforms.

We all know that this cutting-edge infrastructure alone will not guarantee the power network’s long-term effectiveness. Sustainability of these investments will require well-planned and financed maintenance, diversified sources of electrical power generation, and most notably, a tariff that covers the costs of producing and maintaining a power network. Modernization of the power grid requires continued rigor on tariff adjustments by MERA to ensure a rational tariff structure, sustainable and well-governed ESCOM and EGENCO operations, and rapid integration of additional generation into the network from independent power producers.

It is only with these commitments to sustained engagement that the people and businesses of this country can fully realize the benefits of reliable, improved and expanded access to electricity. The United States Government, MCC and the people of Malawi look to the Ministry of Natural Resources, Energy and Mining to assure that these critical elements and initiatives are managed by MERA, ESCOM and EGENCO with the same dynamism moving forward as they were during the Compact.

Continuing progress is what the MCC investment is all about. From the beginning, the US Government’s investment in the MCC Compact has been an investment in the future of Malawi. The US Government will continue to support Malawi through Power Africa to strengthen and build on this modern power sector.

As we conclude the Millennium Challenge Compact – or as I like to say, Malawi’s first Compact, we turn naturally to thoughts of a second Compact.  The bar is high for a second Compact – the first critical hurdle for eligibility for a Second Compact is a successful first Compact.  It’s critical that power sector reform be sustained and that ESCOM be well run, well governed and financially sound so that Malawi can afford to purchase power from from Zambia and South Africa through the Mozambique connector – maybe even sell them power!; and private power companies will invest in electricity generation in Malawi.  It is also critical that Malawi’s government continue to govern well on behalf of its citizens.  One crucial measure of this is that the fight against corruption must continue and must be won.

So, as we celebrate progress today, I encourage everyone to remain focused and committed to sustaining the momentum. Together, we can ensure that Malawi and Malawians experience first-hand the power of power, connecting Malawians into the electricity grid and plugging them into a brighter economic future.

Zikomo kwambiri.