Escom Registers 112 Billion loss in 4 years


The Electricity Supply Corporation of Malawi, Escom says it has registered a loss of K112 billion since its unbundling in 2018 to non-cost effective tariffs.

Speaking at the press briefing in Blantyre on Tuesday, the Company Chief Executive Officer Kamkwamba Kumwenda said Escom is currently buying electricity from producers at K140 per kilowatts per hour and selling the power to end-user consumer at K104 per kilowatts per hour.

Kumwenda has since requested the increase of the tariffs.

“Since the unbundling, we have made a loss of K112 billion. We are charged in US Dollars but our end-user tariffs have not changed.

Escom is slowly dying. It is either we close Escom or increase tariffs. We are proposing automated adjustments,” said Kumwenda.

Kumwenda added that the K112 billion loss includes their disputes with the EGENCO who charges them based on capacity.

“Egenco charges us based on capacity which is not a case in our payment. The difference over the year has also contributed to the loss.

Kumwenda said they are now negotiating with Malawi Energy Regulatory Authority to have their tariffs adjusted.

Energy Expert Grain Malunga said the Company should be allowed to be run as an independent business entity or government should be proving subversion to Escom.

“The history of unbandling is not an issue that is causing this. The issue is the shareholder which is government. They decide at what rate they have to sell the Electricity,” said Malunga.

Six year ago, Government confirmed that the Electricity Supply Corporation of Malawi (Escom) had been officially unbundled, creating two companies, one responsible for power generation and the other distribution.

A statement from the Ministry of Natural Resources, Energy and Mining indicated that the development was with effect from January 1, 2017.

The development also implied that the generation of power was carved out of Escom and that a new company called the Electricity Generation Company Malawi Limited (Egenco) was now operational.

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