- The African Trade Insurance Agency through the RSLF will provide 37MW solar power plant will
- The RSLF provides hedging for up to 10 years and covers delayed payment risk national power utilities.
- Malawi is seeking to diversify its energy mix, the current generation is dependent on hydroelectricity
The African Trade Insurance Agency (ATI) will provide a $67 million guarantee for the 37MW solar power plant to be constructed in Nkhotakota district, Malawi. The solar plant will be developed by Kenyan energy company responsAbility Renewable Energy Holding (RAREH) and UAE-based renewable energy developer Phanes Group. The companies have secured a 20-year power purchase agreement for the project in 2019.
This project will be only the second project supported by the ACA’s Regional Liquidity Support Facility (RSLF). The RSLF provides hedging for up to 10 years and covers delayed payment risk from off-takers, usually state-owned power utilities. The RSLF supports projects with an installed capacity of up to 50 MW and in some cases 100 MW. These projects must be powered by renewable energy, either wholly or co-generation with renewable feedstock.
It is hoped that the solar plant would reduce Malawi’s dependence on hydropower. Hydropower which accounts for over 90 per cent of current generation capacity of 363MW leaves the country prone to supply shortages during periods of drought. Access to power is low; 12 per cent nationally. The government aims to increase that by about 28 per cent over the next ten years using renewable energy.
Project financing has been one of the major barriers to renewable energy development across the continent. The success of this project will only serve to increase the number of projects under the facility and accelerate renewable energy deployment across the country.