Mutharika, Goodall contradict on Chinese funding

Malawi President Peter Mutharika and his minister of finance Goodall Gondwe have contradicted each other on the source of funding for a major energy project.

The $600 million Kam’mwamba Coal Fired Power Project is among the priority projects the Mutharika government will implement over the next few years.

In his State of the Nation Address (SONA) on Friday, Mutharika said the power project will be financed through a loan which will be obtained from a Chinese Bank.

“In the coming fiscal year, government will continue providing solutions to challenges faced in the energy sector. Among priority projects, government will soon sign a financial Agreement with the Exim Bank of China for Kam’mwamba Coal Fired Power Project,” said Mutharika.

However, in December last year Gondwe led Malawians to believe that the project will be financed by a grant from the Chinese government.

Commenting on the contradiction, one of the country’s social commentators Jose Safarao said government should come out clearly on the issue considering that in the past several funds which were obtained through loans have been abused.

“It is essential that the government is clear from the start what we are getting ourselves into here. The country is already reeling from the abuse of $156.5 million Malawi borrowed from Export-Import Bank of India between 2007 and 2014, which has never been accounted for.

“The government machinery as a whole lacks mechanism for properly accounting the numerous loans it takes from banks in India, China and elsewhere,” said Safarao.