The Ministry of Economic Planning and Development and Public Sector reforms which is headed by Vice President Salous Chilima has successfully helped to resolve a long standing dispute between Electricity Supply Corporation of Malawi (ESCOM) and Electricity Generation Company (EGENCO) over electricity payment arrears.
A statement released on Tuesday and signed by the Vice President’s Press Officer Pilirani Phiri says following the agreement, ESCOM will pay K11,7 billion out of the K53 billion it owes EGENCO by 31st December 2020.
“Sixty percent of the 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,” reads the statement.
Phiri says the agreement means that there will be no financial bail out for ESCOM.
The agreement follows a meeting which the Vice President Dr Salous Chilima held on 7th August, 2020, with ESCOM, EGENCO,Malawi Energy Regulatory Authority (MERA), ministry of finance, the ministry of energy and the public sector reforms team to find solutions to the dispute.
The statement says the dispute on electricity payment arrears was choking operations of the two power institutions.
Phiri says the ministry has also facilitated agreement on another area of dispute regarding charges 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 the actual energy transmitted between the two entities effective 17th August, 2020.
The sides have also agreed that the ministry of finance will facilitate review and amendment of the current Power Purchase Agreement (PPA) and ensure that a new signed PPA comes into effect by November 1, 2020.
Phiri says meanwhile a Task Team has been set up to drive ESCOM’s turn-around strategy.
The team will consist of members 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,” reads the statement.
The setting up of the task team follows a meeting Chilima had with the leadership of ESCOM and EGENCO on 22nd July, 2020, to discuss a two year roadmap for power generation to achieve steady power supply.
Source: Nyasa Times