The energy sector in Malawi is governed by the National Energy Policy of 2018 whose main goal is “To increase access to affordable, reliable, sustainable, efficient and modern energy for every person in the country”.
The policy has been formulated taking into consideration changes that have taken place in the structure of the economy and the energy sector such as liberalization of markets, increased private sector participation and formulation of the Malawi Growth and Development Strategy III. International developments such as the formulation of the Sustainable Development Goals (SDGs) and the sustainable Energy for All Initiative (SE4ALL) have also played a pivotal role in the formulation of the National Energy Policy.
This current policy has three main goals namely;
- Make the energy sector sufficiently robust and efficient to support GoM’s socio-economic agenda of poverty reduction, sustainable economic development, and enhanced labour productivity.
- Catalyse the establishment of a more liberalized, private sector driven energy supply industry in which pricing will reflect the competition and efficiency that will develop in the reform process; and
- Transform the country’s energy economy from one that is overly dependent on biomass to one with a high modern energy component in the energy mix.
The main priority areas of the National Energy Policy are electricity, biomass, petroleum fuels, bio-ethanol and other biofuels, liquefied petroleum gas, natural gas, biogas, nuclear energy and demand-side management.
1.1 Energy Policy Objectives
The current Energy Policy for Malawi has the following objectives;
- Improve efficiency and effectiveness of the commercial energy supply industries;
- Improve the security and reliability of energy supply systems;
- Increase access to affordable and modern energy services;
- Stimulate economic development and rural transformation for poverty reduction;
- Improve energy sector governance; and
- Mitigate environmental, safety, and health impacts of energy production and utilization.
1.2 Energy Sector Legal Instruments
The National Energy Policy, being an overarching policy in the Malawi Energy sector, has some instruments that create an enabling legal environment for its implementation. These instruments include the following:
1.2.1 Rural Electrification Act (2004)
This act provides for the promotion, funding, management and regulation of rural electrification and for matters connected with it.
1.2.2 Liquid Fuels and Gas Act (2004)
This has provisions for production, blending, extraction, conversion, importation, transformation, transportation, storage, distribution and selling of liquid fuels and gas in a liberalized market and for matters connected therewith or incidental thereto.
1.2.3 Energy Regulation Act (2004)
An Act to establish an Energy Regulatory Authority to regulate the energy sector, to define the functions and powers of the Energy Regulatory Authority, to provide for licensing of energy undertakings, and for matters connected therewith and incidental thereto.
1.2.4 Electricity Act (2004)
An Act to make provisions for the regulation of the generation, transmission, wheeling, distribution, sale, importation and exportation, use and safety of electricity and for matters connected therewith or incidental thereto.
1.2.5 Electricity (Amendment) Act 2016
The Electricity Act (2004) was reviewed and amended in 2016 to become the Electricity (Amendment) Act 2016 in order to accommodate power-market restructuring process. With this amendment ESCOM was unbundled into two state owned power utilities: namely the Electricity Generation Company of Malawi Limited (EGENCO) and the Electricity Supply Corporation of Malawi Limited (ESCOM). The Amendment signified liberalization of the generation sector of the electricity industry by allowing new entrants/participants in the electricity generation business.