Malawi—Technical Assistance to the Energy Program (Wala Malawi)

Inadequate electricity generation capacity and limited access to modern energy have combined to inhibit Malawi’s economic development at all levels. Characterized by aging infrastructure and overreliance on hydropower, with most of the generating stations located on one river, the electricity supply system is highly susceptible to climatic shocks, leading to persistent outages.

Malawi’s national energy policy focuses on the following key areas:

• Strengthening the electricity sector, particularly by increasing the adoption of renewable energy solutions, integrating emerging and accessible technologies, and promoting the export of surplus green energy to the Southern Africa Power Pool through regional interconnectors.
• Expanding energy access across all segments of the population from 25.9 percent in 2024 to 70 percent of the population by 2030.
• Promoting the use of decentralized renewable energy solutions and clean cooking technologies, including e-cooking, particularly in rural areas.
• Ensuring sufficient energy supply to support sectors prioritized as anchors for economic growth: agriculture, tourism, mining, and industrial manufacturing.

Against this backdrop, our technical assistance supports the industrialization and diversification of the electricity sector by implementing reforms and promoting private investment. This assistance is part of a wider program called the Malawi Energy Program (Wala Malawi), a central component of the Team Europe Initiative, “Green Growth for Malawi,” which supports the resilient transformation of Malawi’s economy and energy systems.

Sample Activities

• Support the next stage of reforms in the electricity sector and the formulation of an electricity market restructuring roadmap.
• Review business relationships among electricity supply industry players and recommend measures for improvement.
• Transition to a competitive procurement scheme for renewable energy.
• Strengthen energy sector planning for generation expansion and supply to meet demand.
• Improve the creditworthiness of the off-taker, ESCOM, and support the counterparty in areas including financial sustainability, operational efficiency, governance, and foreign exchange risks.

Selected Results

• Drafted a Creditworthiness Improvement Program for the national utility and off-taker to improve its creditworthiness score from D+ (55 percent) in 2024 to C (68 percent) in 2025—improving return on assets from -12 percent to +0.03 percent and EBITDA margin from -28.34 percent to +16.83 percent. The utility is targeting a B- rating (investable) by 2028–2030.
• Designed core regulatory reforms (forex facilitation directive, direct supply license, standard development services agreements and PPA templates), with delivery expected by Q4 2026.
• Assessed options for the establishment of the Rural Electrification Authority.
• Developed a competitive independent power producer (IPP) e-procurement framework, complete with draft IPP procurement guidelines and model agreements covering power purchase agreements (PPA), implementation agreements, transmission connection agreements, and land lease agreements.
• Drafted energy balance and Renewable Energy and Energy Efficiency Strategies and Action Plans.
• Recruited and deployed female graduates to energy agencies to promote the participation of women in the energy sector.
• Delivered training on feasibility study development for 30 participants from the national generation company, EGENCO, and other IPP market entrants.
• Trained 20 staff from local commercial banks and financial institutions on small-scale energy project finance and microfinance/microinsurance mechanisms.