Chilima tells Escom 'AVOID AGREEMENTS THAT DON’T MAKE FINANCIAL SENSE'

By Misheck Msumba

The State Vice President Saulos Klaus Chilima has warned the Electricity Supply Corporation of Malawi(ESCOM) to avoid making agreements that do not make Financial sense.

In an update posted on his(Chilima) official Facebook page, after a meeting which the Vice President Chilima had chaired on Friday, August 7 2020 with ESCOM, the Electricity Generation Company (EGENCO), the Ministry of Energy, the Malawi Energy Regulatory Authority (MERA) and the officials from the Public Sectors Reforms team, Chilima said he is concerned with the exorbitant price of fuel for diesel which ESCOM purchases from the Aggreko company.

“One resolution that has been made that I can pre-empt here is that ESCOM will stop buying fuel(diesel) for Aggreko to generate power using generators. We have given 30 days to ESCOM to resolve this with Aggreko.

“It does not make any economic sense for ESCOM to be buying fuel to supply to Aggreko and then the same Aggreko sells power to ESCOM using the same fuel that ESCOM provided. We have advised ESCOM to stop signing agreements that do not make Financial sense,” said Chilima.

Chilima has also advised EGENCO and ESCOM to resolve outstanding loans, which ESCOM owes EGENCO.

According to Chilima, EGENCO charges ESCOM bills of over K1.8 billion monthly.

“EGENCO presented a number of Issues choking it’s operations of billions of unpaid bills sold to ESCOM and the non-conclusive unblindling process that has left EGENCO without legal title of assests,” added Chilima.

However, according to Chilima ESCOM feels EGENCO overcharges it(ESCOM) interms of the bills which EGENCO sells to ESCOM.

Chilima has since promised the two companies that Treasury will on next week Tuesday convene a meeting with the two to resolve the outstanding issues of financial and assets disputes. And also to complete a process of unbundling the two power generation companies.

“After resolving these outstanding issues, what remains now is to put down a two year roadmap between ESCOM and EGENCO that will ensure that the current stable power supply is maintained or improved. With surplus within the stipulated two-year time frame.” Said Chilima.