Malawi has secured a loan of US$76.5mn from the Export-Import Bank of India for the construction of fuel reserve facilities
The Malawi parliament has passed a bill authorising the government to borrow the money from the Indian financial institution.
The facilities will be constructed in the cities of Mzuzu in the north, Lilongwe in the central region and Blantyre in the south.
Malawi finance minister Ken Lipenga said the storage facilities for both petrol and diesel will have a total capacity of 60mn litres, which will be enough to meet the country’s fuel demand for at least 60 days.
The finance ministry claimed that the landlocked country of Malawi, which imports its fuel through the ports of Beira and Nacala in Mozambique and Dar es Salaam in Tanzania, has experienced frequent fuel shortages due to inadequate fuel storage facilities. It added that there has also been a shortage of foreign exchange to procure the commodity from international suppliers.
Energy and mining minister Cassim Chilumpha described the construction of the new fuel reserve facilities as a welcome development, as the existing facilities have a combined capacity of only two million litres of fuel which lasts for just two days, he noted.
“These existing facilities are also far from the main business centres, where more fuel is required,” he added.
Lipenga said that part of the loan will be used for irrigation projects in the lakeshore districts of Karonga, Salima and Mangochi, and the construction of a sugar plant in Salima.