Kamwamba power station

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Kamwamba (Kam'mwamba) power station is a proposed 300-megawatt (MW) coal-fired power station planned for the Kamwamba area in Zalewa, Malawi.

Location

The map below shows Kamwamba, the proposed location for the plant.

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Background

In 2012, China Gezhouba Group of China Energy Engineering Corporation said it planned to build a US$500 million, 1,000 megawatt thermal plant in Malawi.[1][2][3]

In 2013, an MoU was signed between the Malawi Government and the China Gezhouba Group Company for a power station of up to 1,000 MW, but the first phase would be 300 MW. The plant would use about 400,000 tonnes of coal annually from Moatize in Mozambique. The coal would be transported by rail that was being constructed by Vale.[4][5]

In April 2015, it was reported that construction would begin once the US$600 million from the China Exim Bank was approved. The Malawi ministry planned to have the power plant operational by 2018.[6] In July 2015, it was reported that China Railways No. 3 Engineering Group would finance the power station and rail line, but no details were given.[7]

In December 2015, Finance and Economic Development Minister, Goodall Gondwe, signed a Memorandum of Understanding on behalf of the Malawi Government, while CGGC president Lv Zexiang signed on behalf of his company. Zexiang said that he hoped that construction could begin as early as the first months of 2016.[8]

In September 2017, the The Nation (Malawi) reported that the government of Malawi would own 85 percent of the power station, while China Gezhouba Group Company of China would own 15 percent of the power station. Vale of Brazil would provide the coal needed, over a 30 year contract period. The challenge at that time was that the agreements called for the government to put down US$104 million in "commitment money." However, the government had only US$12.4 million available, and had requested to pay the balance in installments.[9]

In April 2018, it was reported that construction was planned for the end of the year, and commissioning in 2021-2022.[10][11]

In September 2018, it was reported that Malawi had met all the conditions to receive a loan from the China ExIm Bank, and that CEEC would soon be on the ground to start implementing the project.[12]

In May 2019, the Ambassador of the People’s Republic of China Liu Hongyang said construction works were underway, but went on to say the work was "some visibility studies on some infrastructure like roads, railways systems and other things to enable easy transportation of coal as well as distribution," not physical construction.[13]

In September 2019, the Malawi Energy Regulatory Authority (MERA) advised Electricity Generation Company Malawi Limited (EGENCO) to speed up the building of the Kamwamba Coal Plant, saying the delay could affect electricity tariffs. EGENCO said it was reviewing the plant's feasibility study and updating it to ensure that it was economically viable.[14] Later that month, EGENCO said the plant was facing financial challenges. EGENCO was lobbying the government to inject some funds from the Malawi Rural Electrification Project (MAREP) into the project.[15]

In May 2020, EGENCO contracted German Company Fichtner GmbH to execute consultancy services to review and update the feasibility study.[16] It confirmed this update in October 2020, noting that the new feasibility study commissioned would update the feasibility study that was done in 2014 and was expected to take six months.[17]

As of May 2021, the project remained on EGENCO's website. The website noted that the feasibility study underway was expected to be completed by September 2021. The study was focused on updating the previous techno-economic feasibility study and ESIA (Environmental and Social Impact Assessment), as well as local coal resource exploration. Upon completion of the feasibility study, EGENCO expected to seek project financing. EGENCO wrote: "The project will take about three years to completion after reaching financial closure. Tentatively, we are looking at 2024."[18]

In December 2021, EGENCO's website did not provide any additional updates.

Funding

In May 2014, the Export & Import (Exim) Bank of the People’s Republic of China granted a loan for the 300 MW project. The plant was to be built over 24 months at a cost of about $667-million.[19] The China Ex-Im Bank said it was still considering funding the additional 700 MW.[20]

According to an October 2016 report, Exim Bank Chairman Zhu Ying told a media conference for African journalists at Exim Bank headquarters in Beijing that the final approval of financing depended on the completion of the Power Purchase Agreement between Exim Bank and Electricity Supply Corporation of Malawi (Escom).[21]

In January 2018, the Export and Import (Exim) Bank of China agreed to fund the project to the tune of US$667 million.[10] According to the IEA, the Government of Malawi is required to source US$104 million as a commitment fee.[22]

In October 2019, it was reported the coal plant would be financed by the Malawi government, and not the China ExIm Bank as planned.[23] However, in January 2020, it was reported the China ExIm Bank would provide US$667 million in funding for the plant.[24]

As noted above, as of May 2021, EGENCO expected having to seek project financing.[18]

Project Details

  • Sponsor: Government of Malawi (85%), Gezhouba Group (15%)
  • Parent company: Government of Malawi (85%), China Energy Engineering Corporation (15%)
  • Location: Kamwamba, Zalewa, Neno District, Malawi, Africa
  • Coordinates: -14.95,34.783333 (approximate)
  • Status: Phase I: Pre-permit development; Phase II: Cancelled
  • Gross Capacity: Phase I: 300 MW (Units 1-6: 50 MW); Phase II: 700 MW
  • Type: Subcritical
  • Start date: 2024
  • Coal Type:
  • Coal Source: Moatize, Mozambique
  • Source of financing: US$667 million in debt from the Export & Import Bank of the People’s Republic of China; US$104 million in equity from the Government of Malawi[24]

Articles and resources

References

  1. "China to build $500 mln, 1,000 MW plant in Malawi," Reuters, August 23, 2012
  2. "$500 MW coal fired plant for Malawi," Reuters, August 24, 2012.
  3. "Malawi will build 300 MW coal-fired power plant," Wolrd Coal, May 8, 2014
  4. "Malawi Signs Multimillion Kwacha Energy Deals With Chinese Company," All Africa, June 6, 2013
  5. "Kammwamba 6*50mw Coal Fired Power Plant Project in Malawi signed by CGGC," China Daily, June 6, 2013
  6. "Coal Fired Power Plant in Neno awaits US$600 million loan approval," Mana online, April 10, 2015
  7. "Malawi government to push for MIF deals," Malawi Times, July 17, 2015
  8. "Malawi in coal-fired power plant MOU with China group: To boost economy," Nyasa Times, December 3, 2015
  9. "Kam'mwamba Poject to Start in November 2018," The Nation (Malawi), September 27, 2017
  10. 10.0 10.1 "Bank of China : Exim Bank to Finance Malawi Coal Fired Power Plant Project," 4-traders, January 22, 2018
  11. "Malawi: Power Situation Will Improve," Malawi News Agency via AllAfrica, April 10, 2018
  12. "Malawi: President Mutharika Pushes for Coal-Fired Power Plant With China Energy Group," All Africa, September 1, 2018
  13. "300MW Kam’mwamba coal-fired power project in Malawi underway," CR, May 3, 2019
  14. "Coal power plant critical for electricity tariffs—Mera," The Nation, September 6, 2019
  15. "Financial challenges cripple Kamwamba coal fired power plant project," Yoneco.FM, September 24, 2019
  16. "German firm to review Kammwamba Power Plant Study," Malawi Online News, Mining & Trade News, May 17, 2020
  17. "EGENCO commissions feasibility study for Kammwamba Power Plant," Mining & Trade News, October 1, 2020
  18. 18.0 18.1 "Kammwamba Coal Fired Power Plant," EGENCO, accessed June 1, 2021
  19. "Chinese bank looks to finance Malawi power station," Engineering News, May 23, 2014
  20. "Chinese bank yet to approve Malawi’s power plant loan," bnl Times, April 21, 2014
  21. "Coal power project awaits government," The Times, October 25, 2016
  22. "Malawi: Chinese Ambassador Says Kam'mwamba 300MW plant still on," IEA Clean Coal Center, April 26, 2019
  23. "Malawi abandons financier China Gezhouba on Kam’mwamba coal project," Malawi Nyasa Times, October 26, 2019
  24. 24.0 24.1 "Chinese bank pumps $667 million into Kam’mwamba Power project," MBC, January 19, 2020

Related GEM.wiki articles

External resources

External articles