Malawi’s $350.7 million Millennium Challenge Corporation compact is a single-sector program focusing on activities that aim to revitalize Malawi’s power sector. By reducing power outages and technical losses, enhancing the sustainability and efficiency of hydropower generation, and improving service to electricity consumers, the compact intends to reduce energy costs to enterprises and households; improve productivity in the agriculture, manufacturing and services sectors; and support the preservation and creation of employment opportunities in the economy.

In July 2011, MCC placed an operational hold on the Malawi Compact. Read the press release.

The Power Sector Revitalization Project seeks to improve the availability, reliability, and quality of the power supply by increasing the capacity and stability of the national electricity grid and bolstering the efficiency and sustainability of hydropower generation. Project activities to strengthen sector institutions and enhance sector regulation and governance will support an enabling environment for future expansion.

Infrastructure Development Activity (approximately $283 million)

The Infrastructure Development Activity focuses on the most urgent rehabilitation, upgrade, and modernization needs of the power system. The activity will preserve and stabilize existing generation capacity, improve the capacity of the transmission and distribution network, and increase the efficiency and sustainability of hydropower generation.

The Malawi Government will commit to investing in additional generation capacity by completing the construction of new hydropower generation. The Infrastructure Development Activity also includes a subactivity addressing environmental and social factors that negatively impact Malawi’s hydropower plants.

Power Sector Reform Activity (approximately $25.7 million)

The Power Sector Reform Activity complements the Infrastructure Development Activity by providing support for the Malawi Government’s policy reform agenda and by building capacity in critical sector institutions. The activity will target entities such as the Electricity Supply Corporation of Malawi (ESCOM), the Malawi Energy Regulatory Authority (MERA), and the Ministry of Natural Resources Energy and the Environment (MNREE) for capacity-building and technical assistance.