The World Bank Board of Executive Directors approved a $350 million grant from the International Development Association (IDA) to support Malawi’s Mpatamanga Hydropower Storage Project (MHSP), a large infrastructure operation aiming to transform the country’s energy landscape and its economic development trajectory.
At completion, subject to the mobilization of private financing, MHSP will significantly increase the country’s installed capacity, delivering 1,544 gigawatt-hours of clean energy annually. This additional energy will help supply electricity to over a million new households in the country and will create thousands of job opportunities.
MHSP is a top priority for our government as the least-cost option in meeting our growing energy demand and achieving our access targets. 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.
Ibrahim Matola, Minister of Energy
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. In September 2022, the Malawian Government selected a consortium consisting of Electricité de France (EDF) and SN Malawi BV (owned by British International Investment, Norfund and Total Energies) as MHSP’s strategic sponsors using an international competitive tender process. The project’s financing is expected to consist of grants, equity contributions, loans and guarantees from various development partners and private sector stakeholders; and will represent the largest foreign direct investment in Malawi’s history.
MHSP’s main and regulating dams on the Shire River will generate clean energy and store power to supply electricity during peak demand hours, helping to improve the reliability of Malawi’s national grid. The hydropower facility will also boost the grid’s capacity to support the growing demand of the country’s mining companies, an industry which holds significant potential to boost the country’s economic development prospects over the coming decade.
This new hydropower project is a game-changer for Malawi, capable of catalyzing transformative change in productive economic sectors such as mining, agri-business and tourism. As the country works on driving its economic development agenda, this new source of clean and reliable energy will help drive business growth, create jobs, and improve the lives of millions of Malawians.
Nathan Belete, World Bank Division Director for Malawi, Tanzania, Zambia and Zimbabwe