In its quest to address constraints facing the country’s power sector, the Millennium Challenge Account (MCA) Malawi says there is effective corporate governance within Electricity Supply Commission of Malawi (Escom) and other power supply partners in Malawi.
This was disclosed on Thursday in Lilongwe at a dissemination workshop where the evaluator recruited by MCA Malawi presented results after assessing the performance for the power sector reform project under the Millennium Challenge Corporation’s Infrastructure Development and Power Sector Reform projects in Malawi implemented from 2013 to 2018.
The evaluator was to explore energy challenges and changes over time at the household level where several case study communities expected to benefit from the Infrastructure Development Project (IDP) investments, to represent multiple regions, and a combination of income and access to electricity.
MCA Malawi Power Sector Reform Director, Grace Simwaka said the report is a mixed bag because it shows that there has been progress but with some challenges remaining.
She said the project which among other issues focuses on the issue of governance within Electricity Supply Commission of Malawi (Escom), Malawi Regulatory Authority (Mera) and Electricity Generation Company (Egenco) who are the partners of the project working with the government of Malawi has done a good job.
Simwaka said it was pleasing to note there are great improvements in the way Escom is operating after several discussions that included government.
“We have been having discussions with government to ensure that we bring to the attention that we would want Escom to have effective governance processes and procedures in place as well as to ensure that government appoints the right people into the board of Escom and Egenco in terms of the qualifications, skills and their standing in society,” said Simwaka.
She said half way through the project, government has tried to appoint the right people and there has been less conflict of interest in terms of representation of the board of Escom from the ministry responsible for energy.
“As of now, the principal secretary only sits on the board of Egenco and not Escom. There is still room for improvement but at least there is a step forward,” she explained.
According to her, there is also an improvement in financial management as compared to the previous years both in terms of position since they were assisted on processes and procedures to be followed.
“They are collecting more revenue now because Mera granted them some tariff increases and we also provided capacity building to their staff in terms of financial management, planning and on how best they can use the income they get and develop a procurement plan where they will know what they need and when they need,” she said.
However, responding to this, one of the participants at the workshop raised a concern for the future of tariff increases in which he highlighted that MCA should consider tackling this so that it benefits Malawi’s small and medium-sized businesses.
In response to this, Simwaka said the use of generators is a short term intervention hence an increase in tariffs just to lessen the blackouts and once the long term interventions are fully implemented all challenges will disappear.
She added that MCA’s facilitation in the provision of management information system, has enabled Escom to have the right tools in ensuring that they are more efficient in their operations visa-vi the time they started the project.
Commenting on the same, MCA Director for Monitoring, Evaluation and Economics, Themba Chirwa said they continue to focus on results through monitoring to make sure that they have the right data and through evaluation they learn from the interventions they implement.
He said through the compact, they have three key objects they want to achieve, to make sure that there is a reduction of the cost of doing business, to make sure that there is an expansion in terms of access and value addition in terms of production and the study focused on how these businesses are being affected by the way electricity is being produced.
“We did a baseline in 2015 and a midline in 2016 and the three key issues are positive and these are a result of an improvement in Escom’s finances, the way they operate and corporate governance,” Chirwa said.
He said the achievements in the compact should assure people that there is light at the end of the tunnel though it is a long way but heading in the right direction.
The Millennium Challenge Corporation is working with the Government of Malawi to address the structural, operational and financial inefficiencies of power subsector institutions, and the generation, transmission and distribution capacity constraints facing the country’s power subsector.