The World Bank Board has approved a $350 million grant from the International Development Association (IDA) to fund Malawi’s Mpatamanga Hydropower Storage Project (MHSP).
According to a Reuters report, this project is one of Malawi’s largest energy investments, aiming to increase the Southern African country’s generation capacity.
The Bank stated that the project will connect over one million households to the national grid, significantly boosting electricity access from the current 25.9% to a targeted 70% by 2030.
“MHSP is a top priority for our government as the least-cost option in meeting our growing energy demand and achieving our access targets,” said Ibrahim Matola, Minister of Energy.
Strategic partnerships on the project
MHSP was co-developed by the Government of Malawi and the International Finance Corporation (part of the World Bank Group) as a public-private partnership (PPP) with an expected overall cost of over $1.5 billion, including financing costs during construction.
Furthermore, the Malawian Government selected a consortium consisting of Electricité de France (EDF), SN Power Malawi BV (backed by British International Investment, Norfund, and TotalEnergies) as MHSP’s strategic sponsors using an international competitive tender process.
In addition, the project’s financing is expected to consist of grants, equity contributions, loans, and guarantees from various development partners and private sector stakeholders, according to a World Bank report.
This represents the largest foreign direct investment in Malawi’s history.
The impact of the Mpatamanga hydropower project in Malawi
The project will have a total generation capacity of 358 megawatts, doubling Malawi’s installed hydropower capacity by building two dams along the Shire River between two existing hydropower facilities, according to a Reuters report.
Therefore, it would generate 1,544 gigawatt-hours of clean, renewable energy annually, lighting up over a million homes and creating thousands of job opportunities across the country, once completed, and pending full private financing.
“Once operational, this project will help drive long-term energy security and support lasting, inclusive economic growth. Energy access is fundamental to reducing poverty, fostering economic growth, and attracting private investment,” said Ibrahim Matola, Minister of Energy.
In addition, the hydropower facility will also boost the grid’s capacity to support the growing demand of the country’s mining companies, an industry that holds significant potential to boost the country’s economic development prospects over the coming decade.
MHSP is part of a larger World Bank-supported energy push in Malawi, alongside landmark initiatives like the Mozambique-Malawi Interconnector, Emergency Power Restoration at Kapichira, and the Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) deal, a newly launched project to accelerate last-mile energy access.
