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The Minister of Finance Honourable Ken Kandodo says government is very keen to restore the financial health of ESCOM, and rebuild it into a financially strong and well managed company in order to ensure sustainable economic growth in Malawi. Honourable Ken Kandodo was speaking during high-level consultations with the Millennium Challenge Corporation (MCC) team that was in the country from 9 to 13 May, 2011 to discuss pre- implementation planning for the Malawi Compact. 
“When we signed the Compact (in April 2011) we had agreed to provide an ESCOM turnaround facility, it’s just that at that time we did not agree on the value of that facility and this is what we are doing now, but we are committed that whatever figure will be arrived at, will be included in the budget of 2011/12,’’ said Kandodo. During the discussions, a task force from the MCC and Malawi Government was set up to determine the Turnaround Facility(TAF). The ESCOM TAF comes under the power sector reform activity which complements the infrastructure development activity in the Malawi Compact, by providing support for the government’s policy reform agenda and building capacity in key sector institutions.
Under the Malawi and MCC Compact Agreement which was signed on 7 April, 2011, the Government of Malawi is required to create and fund the ESCOM TAF to support ESCOM’s working capital and investment needs which will be identified through the development of a detailed financial plan for the 2011-2016 fiscal years. Under the ESCOM turnaround sub-activity, the MCC funding will support the provision of technical assistance and equipment to ESCOM, including the development of the financial plan for the 2011-2016 fiscal years, deployment of a financial turnaround team, the rebuilding of the customer database and assistance in rapid billings and collections improvements, through the acquisition of an improved MIS system.  Honourable Ken Kandodo further said he is ready to include an acceptable figure for the ESCOM TAF in the budget, because he recognises that energy is possibly the number one issue that the government has to be in control of, as it drives the private sector which is in turn crucial to sustaining economic growth.
Conditions set to ensure that the Malawi Compact enters into force include an acceptable construction schedule for Kapichira II hydro-power plant, employment of a professionally qualified Chief Executive Officer at ESCOM and a continuation in meeting the MCC eligibility criteria (mcc.gov). The Minister of Finance Hon. Ken Kandodo says Government has already shown its commitment on the Kapichira II hydro-power plant as work has commenced with about US$ 11 million out of the possible US$ 55 million already spent on the project.
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Project Development