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MIGA has issued guarantees of US$24mn to JCM Golomoti UK Limited for equity and shareholder loan investments into Golomoti JCM Solar Corporation Limited for the development, construction and operation of a new 20MW solar photovoltaic plant in Malawi
The guarantees will extend over 20 years and protect JCM against the risks of transfer restriction and breach of contract. The plant includes a battery energy storage system – the first in Malawi.
“MIGA is pleased to support ongoing electrification in Malawi and the first deployment of solar battery storage technology in the country,” said Hiroshi Matano, executive vice-president of MIGA. “By helping to diversify the energy supply, the new plant contributes to Malawi’s transition to a low-carbon and climate-resilient economy.”
Malawi has among the lowest electricity access rates in the world, just 11.2% in 2019. Most of the existing generation capacity – 75% – is dependent on hydropower (a significant portion of it from Lake Malawi), which makes the country vulnerable to the impacts of climate change and leads to frequent and lengthy blackouts. Furthermore, peak demand is currently managed by using expensive and polluting diesel generators.
The Government of Malawi proposes to increase electrification levels to 30% by 2030, seeking to increase electricity supply by new independent power producers and connecting new customers to the grid.
The photovoltaic plant, the second independent power producer in Malawi supported by MIGA, adds a new source of clean energy supply that will reduce CO2 emissions by 45,000 mt over its life. The 5MW / 10MWh battery storage system was installed and made operational at the same time as the plant. It has an expected useful life of up to 15 years.
Beyond managing the intermittency of solar supply, the battery storage system provides an opportunity for better load levelling, storing power during low demand periods and delivering during periods of high demand. It will lead to wider greenhouse gas reductions by lowering the load on more carbon-intensive peak-generating facilities.
"Support from MIGA has been a key aspect of advancing our projects in Malawi,” said Christian Wray, chief executive officer of JCM Power, parent company of JCM Golomati UK Limited. “The partnership makes it possible for independent power producers like JCM Power to deliver projects that have a positive impact on the renewable energy sector in Africa."
JCM is an existing MIGA client, having obtained guarantee coverage for their investments in the 60MW Salima solar power project in Malawi in 2019.