Malawi Government launches $20m off-grid Market Development fund

Malawi’s Ministry of Energy has launched the first-ever US$20 million off-grid Market Development fund dubbed Ngwe Ngwe Ngwe to increase access to electricity through off-grid solutions.

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World Bank is providing financial support to the fund, which will provide loans to eligible off-grid solar companies up to $14 million as working capital to expand the operations and speed up procurement, importation, and make installation of solar home systems that will be sold to rural Malawians at an affordable price.

Minister of Energy Ibrahim Matola said during the launch of the fund on Friday in Lilongwe that the fund will also give $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 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 business and at the same time make electricity access in rural areas,” he said.

Matola added that the fund will create a market catalyst fund of $500,000 to support small scale off grid market based transformative solutions to scale up the renewable energy transition.

According to him, the off-grid component will add five percent to the national electrification rate currently at 18 percent with 11.4 percent from the national grid and 6.6 percent from off-grid solar solutions.

World Bank Country Manager, Hugh Ridell assured Malawi of the bank’s commitment to ensuring access to electricity in rural areas.

“The fund is part of a larger project to get households connected to off-grid solar solutions,” he said.

Ridell added that the fund will be used by the private sector where more jobs will be created.

Almost 200, 000 households in rural areas will be connected to off-grid solar by 2024.