The Maravi Post has received reports indicating that the Ministry of Economic Planning & Development; and the Public Sector Reforms have facilitated an agreement between Electricity Supply Corporation of Malawi (ESCOM) and Electricity Generation Company (EGENCO) pertaining to the dispute on electricity payment arrears which has existed for a long time consequently choking operations of the two institutions.

Vice President Saulos Chilima claims that this follows the meeting he had on 7th August, 2020, with ESCOM, EGENCO, Malawi Energy Regulatory Authority (MERA), the Ministry of Finance, the Ministry of Energy and the Public Sector Reforms team to find solutions to the dispute under the ongoing reforms on Parastatal organisations.

According to the same reports it has been agreed that ESCOM will pay K11.7 billion out of the K53 billion which it owes EGENCO by 31st December 2020. Sixty percent of the balance equivalent to K25.2 billion to be paid by 31st December 2021. The Ministry of Finance will also facilitate that EGENCO issues a Credit Note for the remaining 40 percent balance. This means no bail out for ESCOM.

The Vice President also said that another bone of contention was the billing for energy transmitted between ESCOM and EGENCO. The Vice President also said this has been resolved that ESCOM and EGENCO should use the existing metering facilities to determine actual energy transmitted between the two entities effective 17th August 2020.

It has also been agreed that the Ministry of Finance will facilitate the review and amendment of the current Power Purchase Agreement (PPA) and ensure that the new signed PPA is put in effect by 1st November 2020.

Meanwhile, a Task Team has been set up to drive ESCOM’s turn-around strategy. The Task Team members will come from the following ministries: Ministry of Finance, Ministry of Economic Planning and Development, Ministry of Energy, Ministry of Justice and Department of Statutory Corporations.

The vice President also said Once this is done, the turn-around strategy and the roadmap will be made public and monitored under the Public Sector Reforms Programme in the administration of Dr. Lazarus Chakwera, President of the Republic.

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