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AfDB and Malawi Sign Budget Support and Hydroelectric Feasibility Study Grants


The African Development Bank and the Government of Malawi (GoM) signed two grants amounting to UA 6 million (about US $9 million) on May 23, for budgetary support and a Hydroelectric Power Plant Feasibility Study. The US $6 million additional Crisis Response Budgetary Support follows the initial US $39 million provided in July 2012 to support Malawi’s reforms aimed at restoring macroeconomic stability and enhancing public finance management, as well as support social protection measures.

The Kholombidzo Hydroelectric Power Plant Feasibility Study grant amounting to US $3 million will be used to produce a full feasibility study for the future development of the Kholombidzo power generation plant to contribute to the expansion of electricity generating capacity in Malawi.

Speaking during the signing ceremony, the Bank’s Resident Representative in Malawi, Andrew Mwaba, said the Bank was encouraged by the Government’s renewed commitment and determination in undertaking bold macroeconomic reforms, which were beginning to yield some positive gains as evidenced by fuel and foreign exchange availability on the market, and signs of decelerating inflation. On support for the hydro power study, he pointed out that the Bank Group will be contributing to facilitating investment in the energy sector needed to support private sector investment and economic growth.

For his part, the Minister of Finance, Ken Lipenga, thanked the Bank for the support it is providing to Malawi and showing that it is indeed an African multilateral development bank of choice. He said that the budgetary support will bridge the financing gap in the current (2012/13) fiscal year, provide resources for safety nets, and help in increasing the foreign exchange reserves for the country. Considering the demand for power surpasses its supply, the Minister noted that the hydro study will help in exploring opportunities for improving Malawi’s power generation capacity.

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