A feasibility study that will undertake technical, economic, financial, legal and institutional analyses, environmental and social impact assessments was launched in Blantyre on 26 January 2010. The study will help bring out key outputs in finalising the compact development process.

The feasibility study will help define project activities, costs, key risks and issues, implementation arrangements, beneficiaries and benefits of the Malawi Energy Project.

Millennium Challenge Corporation’s (MCC) Country Director Deidra Fair thanked management of Electricity Supply Corporation of Malawi (ESCOM) for the support rendered during the Compact development process.  ’’MCC is looking forward to a fruitful study and productive contributions from members of staff,’’ she said.

The technical feasibility study will be carried out using  part of  the US$14.8 Million  released in pre- compact financing to assist Malawi carry out requisite studies and enable it sign a compact agreement later in the year. .

ICF-CORE is the consultant carrying out the study that will include collecting information at various sites in the country.  The Project Manager of the  ICF-CORE team, Vinod Shrivastava said the team would visit seven sites to collect information on equipment, physical conditions, engineering data and economic growth among other requirements.

A final report of the study will be completed in August 2010. “It is an extremely fast track schedule given the number of projects,  sites to be visited and data to be collected,’’ said Shrivastava. He added that the ICF-CORE team and their counterparts in ESCOM need to work diligently and efficiently.

The MCC has, since 2008, been working with the Government of Malawi through the Millennium Challenge Account – Malawi (MCA-M), to develop a compact program for the country. In the process, the Government of Malawi identified an overvalued exchange rate, lack of adequate and reliable electricity supply, lack of human capital and high transportation costs as four areas that constrain  economic growth. After an evaluation and due diligence by the MCC, the energy sector was considered a binding constraint to economic growth.

In addition to the feasibility study, a capacity assessment of the power sector (CAP-SCAN) Environmental and Natural Resource Management (ENRM) and Legal-financial due diligence studies will also be carried out to determine some of the interventions that will be implemented as part of the power sector project