The aim of MEAP is to increase access to electricity through ‘Grid Densification’- a component being implemented by the Electricity Supply Corporation of Malawi (ESCOM) as well as ‘Off-Grid Market Development (OGMD), a component which is under the Ministry of Energy.

 

Under OGMD, the Ministry of Energy has established the Ngwee Ngwee Ngwee Fund, amounting to US$D 20 million to enable off-grid solar companies to import and distribute over 200,000 solar home systems to rural households across Malawi.

 

The Fund will provide loans to eligible off-grid solar companies up to US$D14 million as working capital to expand their operations and speed up procurement and importation of the off-grid solar home systems.

 

 The project will also offer Result Based Grants up to US$D 5.5 million to provide end-user with subsidies to close the affordability gap of rural customers that cannot afford solar home systems at the current commercial prices.

 

The Fund will also create a Market Catalyst Fund (MCF) of US$D 500,000 to support small-scale off-grid market-based transformative solutions to scale-up the renewable energy transition, particularly by engaging the local off-grid solar companies in Malawi.

 

The idea is to make these local off-grid solar companies grow to the extent of being able to access capital on the market for the expansion of their businesses.

 

Not only will this project benefit off-grid solar companies, but financial institutions will also benefit through the Technical Assistance Window, which will provide training and capacity-building.

 

This technical assistance will include promotion and awareness building; quality assurance activities including the adoption and enforcement of verasol quality assurance framework, efficient financial management and monitoring of collection efficiency; training of trainers, customers, and technicians to facilitate the efficient installation and maintenance of solar home systems.

 

Overall, the initiative is expected to add five (5) percent to the national electrification access rate by 2024 and allow Malawians living far from the national grid, especially in rural areas, to access electricity.

 

Currently, the electrification rate is at 18 percent with 11.4 percent coming from the national grid and 6.6 percent from off-grid solar solutions.

 

 Speaking during MEAP’s Ngwee Ngwee Ngwee Fund launch in Lilongwe on March 10, 2023, Minister of Energy Ibrahim Matola describes the fund as a complete package of interventions that will unleash the potential off-grid solar market that will help move towards fulfilling the aspirations of the National Energy Policy of 2018 to provide 70 percent of Malawians households with off-grid electricity.

 

“By assisting the off-grid solar companies, this Fund is fulfilling another aspiration in the National Energy Policy, to establish a vibrant, reliable, incentivized and sustainable private sector-driven Renewable Energy Technology industry,” Matola says, adding that there is need for the private sector companies to take advantage of this Fund and use it to expand their businesses in the off-grid solar market.

 

The Minister says the terms of the loans from the fund have been made very competitive, as such, he expects to hear no issues of defaulting by any off-grid solar companies.

 

“It is also my expectation that participating solar off-grid companies will operate within the principles of MEAP, the laws of Malawi and the World Bank’s operating framework,” he says.

 

Further, Matola explains that there are some things to be observed by participating solar company such as ensuring that the company that benefit from the loan apportions 30 percent of its off-grid solar installations targets to female headed households as well as offer guarantees and after-sale services to their customers.

 

Another condition is that all solar home systems to be sold and installed under this project should be Verasol (Quality Assurance Framework) certified and this aims at encouraging all solar companies to install internationally certified products and reduce the proliferation of counterfeit products on the market.

 
Matola was all grateful to World Bank for bankrolling the Ngwee Ngwee Ngwee Fund, which is a loan and grant to the Government of Malawi.

 
“As a development financier, you could not have come at a more opportune time than now when the country needs massive investments in the Energy Sector to increase access to modern, clean, reliable and affordable energy,” the Minister says.

 
World Bank Country Manager Hugh Ridell says the Fund will help improve access to electricity by rural communities.

Ridell reveals that Malawi has the lowest access rate to electricity which is 18 percent and the objective of the Fund is to have 200,000 or more households connected to electricity through off-grid solar.

 
“One important aspect of this component is that it will be done by local solar companies and this will create jobs,” he explains.

He however emphasized the need for companies to follow proper standards when procuring solar gadgets as well as when paying back the loan as the Fund is revolving.

Acting Director of Energy, Joseph Kalowekamo, says limited access to finance has been the major factor preventing solar companies from expanding their businesses and customer base.

 
“So, Government through the Ministry of Energy decided to establish the Ngwee Ngwee Ngwee Fund under the MEAP, which will competitively provide financing to eligible Off-Grid Solar (OGS) companies with the aim of increasing access to electricity via off-grid modalities.

“The overall objective of this Fund is to provide financing and technical assistance to rapidly scale up the off-grid solar market in Malawi’s rural areas to ensure that off-grid solar companies reach-out to as many new rural households as they can with solar home systems/products by June 2024,” he explains.

 
Kalowekamo says government plans to sustain the Ngwee Ngwee Ngwee ‘revolving’ Fund beyond MEAP.

Malawi Electricity Access Project Coordinator, Lucy Chimombo, discloses that other than the Fund, the project has identified 10 sites for mini-grids development; one site in the north, four in central region and five in the southern region where feasibility studies are taking place. This is another initiative under the project to provide electricity to Malawians living in areas that are at least 10KM away from the national grid.

“The results of these studies will provide information on developing and installing mini-grids to increase access to electricity through off-grid solutions,” she says.

 
The Ministry of Energy has hired Infrastructure Development Company Limited (IDCOL) in a joint venture with African Grant Advisor Limited (AGA) to manage the Ngwee Ngwee Ngwee Fund.

Malawi Broadcasting Cooperation (MBC) and National Statistical Office (NSO) are the local institutions that are entrusted to offer promotional activities and conduct research on energy needs and consumption, respectively.

The launch was spiced by dance performance by Lilongwe City Cultural Troop and comedic act by Chindime and Phungwako. Upon arrival at the event, the minister and entourage toured pavilions of Zuwa Energy, Vitalite, Green Impact Technologies and Yellow Solar who showcased some of technologies that will be installed in the rural households.