Malawi: Salima Solar
Starting the journey to solar power
Malawi has an electrification rate of just 12.7%. The country’s existing installed power generation capacity is dominated by hydro power. Low water levels following the country’s recent dry season have impacted power supplies, resulting in weekly power outages and constraining the development of Malawi’s growing mining and manufacturing industries. The Government of Malawi recognised energy as a key driver of economic growth in their Growth and Development Strategy (2011-2016) and is working to establish the regulatory frameworks needed to attract private sector investment to the sector. The government is also keenly aware of the need to diversify Malawi’s energy mix to mitigate the vulnerability of its power supply to drought and fluctuating oil prices. High solar irradiation levels suggest that solar power could offer a viable addition to Malawi’s energy mix.
InfraCo Africa was approached by JCM Clean Power Development Fund (JCM) – a leading developer of renewable energy projects in sub-Saharan Africa – and a local developer, Matswani, to co-develop the Salima Solar project. Situated 75km east of Malawi’s capital, Lilongwe, the project will deliver up to 60MWAC of power to Malawi’s national grid and mobilise approximately US$40 million in investment from Development Finance Institutions (DFIs) and the private sector. Salima Solar is expected to begin supplying power in 2020.
The Salima Solar project ties in with Power Africa initiatives in the region which aim to connect more people to the national grid. By addressing the shortfall in energy supply, Salima Solar will serve to enhance the ability of these initiatives to meet demand from newly connected consumers. As well as catalysing new opportunities for local businesses, the project will also create new jobs in the area and reduce reliance upon expensive diesel generators, improving indoor air quality and cutting carbon emissions.
The project has secured $320,000 of grant funding from PIDG’s Technical Assistance (TA) to support specialist studies, including the exploration of beneficial community initiatives with potential to be developed close to the project site. TA has also provided a further $6 million Viability Gap Funding grant to the project to accelerate progress to the construction phase.
As one of the country’s first commercial-scale solar IPPs, Salima Solar has considerable potential for replication; promoting further development of Malawi’s solar resource. By also demonstrating the efficacy of government regulatory frameworks, the project is expected to increase investor confidence and so facilitate future private and DFI investment into Malawi’s renewable energy sector.
Being jointly developed with JCM Power and Matswani Capital PTY.