Malawi is identified as a priority country for GEAPP engagement due to significantly low electrification levels, low concessionary capital within the private sector, and a universal electrification agenda. GEAPP identified agriculture as a critical sector for scaling DRE through large- and small-scale technologies e.g. irrigation & processing machinery.
The potential to scale DRE in Malawi’s agriculture sector requires partnership with large agricultural projects, mostly led by private sector, where DRE solutions could have significant impact on production output, economic viability, and socio-economic benefits to smallholders engaged in key value chains. These projects need to be reliable and provide opportunity to demonstrate scalable DRE solutions across the Malawi agriculture sector. Rockefeller would provide the grant funds and concessional capital as needed to achieve this goal.
The objective of the work was to identify high potential large agricultural projects in Malawi. Projects were prioritised based on size (cost and energy needs), impact potential (environmentally and socially), and scalability (including VC supply and demand). Recommendations were to include articulations as to where and how GEAPP could intervene to make these projects viable, providing specific rationale for grant funds and concessional capital as needed.
Wellspring worked with local consultants and RE experts to identify large agriculture projects in Malawi and prioritise these based on the abovementioned criteria. 13 stakeholder interviews were conducted during a country visit to Malawi, as well as energy requirement assessments for each project and value chain analysis across 8 value chains.
The data was used to develop a short-list of high-potential priority projects and a discussion on suitable financial vehicles to be adopted by Rockefeller to allocate and distribute finances into these projects appropriately, including results-based finance (RBF) incentives.
Wellspring provided advice on the agricultural projects that Rockefeller should consider to roll-out DRE in Malawi and identified major constraints to the success of these investments i.e. max demand tariffs (MDT) imposed by Malawi’s state-owned energy supplier ESCOM. To address these challenges, Wellspring has urged Rockefeller to open dialogue with the GoM to consider less inhibitive tariff arrangements. Wellspring is also supporting Rockefeller in the articulation of a financial vehicle to deliver the agreed financial support for the DRE projects.