The Government of Malawi, IFC, Scatec JV and EDF Sign Agreement to Develop Hydropower

Lilongwe, Malawi, September 6, 2022-The Government of Malawi (GOM), IFC, Scatec and EDF today sign a binding commercial agreement to undertake the co-development of the Mpatamanga hydropower project.

The agreement, signed under Malawi’s Public-Private Partnership framework, concludes the selection process undertaken by the Government of Malawi to competitively select a private sector partner to finance, build, and operate the Mpatamanga hydropower plant.

Today’s signing officially awards the role of project lead developer to a consortium composed of Scatec and EDF. 

IFC worked closely with the Government of Malawi to support the early-stage project development and provided funding for activities that allowed the government to launch the competitive tender process. 

Located on the Shire River, the 350-megawatt (MW) facility will be a first-of-its-kind in Malawi.

The generation facility is composed of two plants – a 309 MW peaking plant and a 41 MW downstream plant.

The project is expected to contribute to reducing energy shortages and enhancing energy security in Malawi.

The 309 MW plant with its reservoir storage is designed to provide much needed energy during peak demand hours of the day and overall grid stability with its ability to ramp up or down production to meet actual demand. 

Scatec, and its venture partners British International Investment (BII) and Norfund, and EDF are majority shareholders in the project and will own 55 percent of the project, split between them.

EDF will own 27.5 percent, while Scatec has an ownership of 14 percent, and the venture partners the remaining 13.5 percent.

The Government of Malawi will own 30 percent, and IFC 15 percent of the total project shareholding.

Hydropower can play a critical role in Africa’s renewable energy development. Mpatamanga will deliver electricity to approximately two million people and save 520,000 tons of COemissions per year. 

“The 350 MW Mpatamanga hydropower project will not only double the installed capacity of hydropower in Malawi, but also improve power supply security, provide opportunities for increased renewable energy generation capacity in the country and contribute to controlling the flow of the Shire River downstream of the power plant.

The Government of Malawi is indebted to its partners in achieving this milestone, which is a major step in the development of this project,” said Minister of Energy in Malawi, Honourable Ibrahim Matola. 

“IFC supports the Government of Malawi’s goal to accelerate access to affordable clean energy.

The Mpatamanga hydropower plant has the potential to grow Malawi’s electricity infrastructure and connect thousands of rural and remote households while also spurring green, inclusive, and resilient growth in the country,” said Jumoke Jagun-Dokunmu, IFC Regional Director for Eastern Africa. 

“This is a significant development in the realization of the Mpatamanga project. We are excited to build on our hydro portfolio in Africa – and are proud to have finalized development plans alongside our partners.

The country of Malawi will receive a significant investment into its power sector, which in turn will stand to benefit a major portion of the nation’s population.

We look forward to reaching further development milestones for this project – and contributing to Africa’s renewable energy journey,” said Terje Pilskog, Scatec CEO. 

“We are proud to contribute to the Mpatamanga project, which is a great opportunity to bring our technical expertise in hydropower and our strong environmental and social commitment in favor of local communities and biodiversity.

The signing of this partnership strengthens EDF’s position in Africa, a strategic region for our development.

This competitive project will significantly enhance the access to electricity in Malawi and is fully in line with EDF’s ambition to build a net zero energy future with electricity and innovative solutions that drive economic development,” said Béatrice Buffon, EDF Group Senior Executive Vice-President, International Division. 

The partners will work extensively with all stakeholders and support project implementation, building on EDF’s and Scatec’s strong ESG track-record in development of hydropower projects across the globe, in alignment with IFC’s environmental and social standards.