On March 04, 2022 , The Multilateral Investment Guarantee Agency (MIGA) has issued a guarantee that will support construction and operation of a new 20 MW solar photovoltaic (PV) power plant (“the Project”) near Golomoti in Dedza district of Malawi. The plant will also include a 5 megawatt/ 10 megawatt hour (MW/MWh) battery energy storage system (“BESS”) co-located with the solar PV plant, the first such unit in Malawi. MIGA guarantee covers up to US$24 million of equity and shareholder loans (quasi-equity) investments by JCM Golomoti UK Limited of the United Kingdom into the project enterprise incorporated in Malawi, Golomoti JCM Solar Corporation Limited, as well as future profits. The guarantee has a term of up to 20 years, providing coverage against the risks of transfer restriction, and breach of contract. MIGA’s risk exposure under the guarantee is shared with the IDA Private Sector Window (PSW) under the MIGA guarantee facility (MGF).
The project has the potential to improve reliability of electricity service in Malawi, as the use of solar power during the day will conserve hydropower resources to be used during peak demand periods in the evening. Malawi currently experiences severe shortages of energy, exacerbated during the dry season when dispatch from hydro plants is often just 50% of capacity. The project, including the introduction of battery storage for the first time in Malawi, will help diversify Malawi’s energy mix away from its current reliance on hydro, supporting resilience. Improved electricity availability to private companies will contribute towards alleviating an important constraint to scaling up private investment.