Millennium Challenge Corporation (MCC) Deputy Vice President for Compact Operations in East and Southern Africa, Andrew Mayock, was in the country for a thirteen day visit. During the visit, Andrew Mayock held meetings with government officials, the private sector and donors.

Mayock’s visit comes at a time when the Government of Malawi and the MCC are finalising agreements on the energy project before negotiations.  His meetings with stakeholders was intended to provide him with an insight on the progress being made so far and to finalise some of the outstanding issues related to financial, regulatory and governance issues in the power sector.

Speaking during a meeting with the Millennium Challenge Account-Malawi (MCA-M) team, Mayock, who was visiting Malawi for the first time, said he recognized the progressive and constructive work that has been done to develop the Malawi Compact since the country became eligible for the investment grant from the MCC in December 2007.

To advance the progress of compact development, the Government of Malawi and MCC are putting on record areas of common understanding concerning the energy project.

The Malawi government and the MCC are focusing on how best the financial health of ESCOM can be restored, how best the Corporation can be rebuilt  into a strong and well-managed electric utility and how to develop a regulatory environment that supports private investment with new generation and expanded capacity. 

Under these three pillars, the MCC endeavors to assist the Government of Malawi to carry out tasks that will include developing a detailed financial plan and restoring ESCOM’s balance sheet, improving corporate governance framework and practices and developing and instituting a full cost recovery tariff that provides for system sustainability.

In addition, Mayock and the Government of Malawi have held discussions on the components of the Compact project for Malawi.  These discussions have covered pillars including the increased capacity that will result from the rehabilitation and modernization of the plant at Nkula A, as well as the rehabilitation and strengthening of the Transmission and Distribution networks in the country.

The Government of Malawi and the MCC are scheduled to negotiate for the compact in November, 2010.

The Malawi energy project which will be funded by the MCC is aimed at improving the reliability and quality of power, increasing generation capacity and access and strengthening the sector’s capacity and governance.