This has been disclosed by the Minister of Natural Resources Energy and Mining, Atupele Muluzi, in an interview with Capital FM.
The interconnection is expected to allow Malawi to have access to the Southern Africa Power Pool (SAPP) market through the Mozambique interconnected grid with Zimbabwe and South Africa.
The power bill deal between the two countries will see a power transmission line constructed from the Matambo sub-station in Mozambique to Blantyre West.
If finalized new lines would transmit at least 200 megawatts.
The project seeks to increase access to diversified, reliable, and affordable supplies of energy in the country.
The restructuring will retain the investments to upgrade inadequate power infrastructure at the national level. The components of the original project that relate to the cross-border transmission line will be removed. The restructured project will be re-named the Transmission Upgrade Project.
The Malawi and Mozambique interconnection power project entails that Malawi import electricity from Mozambique’s Cahora-Bassa Dam to avert power shortages at a cost that was expected to be financed by the World Bank’s $200 million package.
Presently, the demand for power in the country for about 180,000 clients and private and private sectors is about 300MW. However, the available power generation capacity is 266MW.
According to a study by the Millennium Challenge Account-Malawi (MCA-M), projections for generation requirements for 2010, 2015 and 2020 are 408MW, 603MW and 829MW respectively.
This is in line with a survey done by the Malawi Business Climate Survey (MBCS), which has spoken out about the erratic power supply as being one of the country’s major challenges of doing business or attracting foreign investment.
According to the findings by MBCS, cuts in power transmission have contributed to losses beyond the minimum acceptable level of seven percent. The MCA-M estimates that the country is losing $215.6 dollars a year due to the power outages.