Creation of more electricity companies has piled costs on consumers – ESCOM


Electricity Supply Corporation of Malawi (ESCOM) says there are many companies governing about 400 Megawatts in the electricity sector and this is pilling costs on the consumer.

ESCOM officials led by Chief executive officer Kamkwamba Kumwenda appeared before a Joint Parliamentary Committee today.

in ESCOM’s presentation to the committee, Kumwenda argued that many countries in Africa, even those with thousands of megawatts, have a single buyer within the utility company while Malawi has several companies managing generation, transmission and distribution of electricity.

“We should be looking at the amount of costs we are pilling costs on the consumers. Our consumers are already complaining about high tariffs and we don’t think creating so many companies will resolve the issue of high tariffs,” said Kumwenda.

ESCOM used to be responsible for generation, transmission and sale of electricity but the company was unbundled in 2017 and this saw the creation of Electricity Generation Company (EGENCO) and Power Market Limited.

Kumwenda said the unbundling has given raise to disputes in the power sector, taking away the focus from power generation.

He noted that there is the cost dispute between EGENCO and ESCOM as EGENCO bills ESCOM based on the capacity available in a particular month and not the energy actually metered to ESCOM.

Kumwenda said based on the energy delivered,  ESCOM has paid EGENCO K190 billion over the past four years  but EGENCO argues that there is a balance of K82 billion.

“Because EGENCO says that if it declares that such capacity is available this month then it should bill customers,” said Kumwenda.

He said such charges are passed on to consumers since ESCOM is making losses and cannot pay the money. Kumwenda further revealed that EGENCO has made an application to be paid in dollars which will also affect ESCOM.

On blackouts, Kumwenda  said EGENCO has been supplying ESCOM with 68% of electricity but what is required is 90 percent or more for there to be no blackouts.

“People are angry with ESCOM but their anger is misdirected, if they continue not to give us enough electricity then we will have no choice but to continue with the load shedding,” said Kumwenda.


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