World Bank gives Malawi US$60m credit to ease power blackouts

The World Bank has approved a credit of US$60 million to Malawi to rehabilitate Kapichira Hydro Power Station which was damaged by cyclone Ana induced floods.

The bank says the restoration of the power station would drastically reduce power cuts the country is currently experiencing.

According to the World Bank, the credit has been given through the International Development Association (IDA) which has approved a credit of US$36 million and a grant of US$24 million from the disaster response window for the emergency power restoration project in the country.

The country lost its power generation capacity and part of its transmission and distribution network due to Cyclone Ana that hit the country early this year.

A letter dated 17 June 2022 from IDA and addressed to the Minister of Finance Sosten Alfred Gwegwe states that the credit has a final maturity of 38 years including a grace period of 6 years and will be on standard IDA terms.

“The objectives of the project is to rehabilitate and increase resilience of Kapichira hydropower dam and spillways, and transmission and distribution infrastructure damaged by tropical storm Ana in January 2022 which is responsible for about 23% of the country’s power generation capacity,” reads the letter.

The project will also focus on restoring transmission and distribution lines which were also affected by the storm.

“The project has two components, Kapichira dam rehabilitation and strengthening and transmission and distribution network restoration.

“Project beneficiaries will include households and businesses, health facilities, schools, water pumping stations, as well as institutions that lost power,” adds the letter.

The January 2022 floods that came as a result of Tropical Storm Ana caused severe damage to the 129.6 MW Kapichira hydro electric power plant’s dam and spillways, putting the power plant out of operations.