World Bank Approves $350M Grant for Malawi's $1.5B Mpatamanga Hydropower Project

The World Bank Board of Executive Directors has given a critical green light to Malawi’s energy future by approving a substantial $350 million grant from the International Development Association (IDA) to fund the ambitious Mpatamanga Hydropower Storage Project (MHSP). This landmark initiative aims to transform the nation’s energy landscape and fuel inclusive, long-term economic development.

A Major Step Toward Energy Security

Once completed, the MHSP is expected to deliver a massive boost to Malawi's energy sector by generating 1,544 gigawatt-hours of clean electricity annually. This increase in output will supply power to over one million new households, marking a transformative milestone in a country where access to reliable energy remains a persistent challenge.

Ibrahim Matola, Malawi’s Minister of Energy, hailed the project as a national priority. “MHSP is a top priority for our government as the least-cost option in meeting our growing energy demand and achieving our access targets. Once operational, this project will help drive long-term energy security and support lasting, inclusive economic growth,” he said. “Energy access is fundamental to reducing poverty, fostering economic growth, and attracting private investment.”

Financing the Future: A $1.5 Billion Investment

With an estimated total cost exceeding $1.5 billion—including financing during the construction phase—the MHSP represents the largest foreign direct investment in Malawi’s history. The project has been structured as a public-private partnership (PPP) and was co-developed by the Government of Malawi and the International Finance Corporation (IFC), part of the World Bank Group.

Following an international competitive tender process in September 2022, a consortium led by Electricité de France (EDF) and SN Malawi BV—jointly owned by British International Investment (BII), Norfund, and TotalEnergies—was selected as the strategic private sector sponsor. This collaborative approach aims to blend public and private capital, with expected contributions in the form of grants, equity, loans, and guarantees from development partners and commercial stakeholders.

Infrastructure to Power Economic Growth

The MHSP will comprise a main and regulating dam on the Shire River, a strategic location selected for its hydroelectric potential. These dams will not only generate renewable energy but will also incorporate storage capacity to ensure electricity is available during periods of peak demand—significantly improving the reliability and stability of the national grid.

This is especially critical for industries such as mining, agri-business, and tourism, all of which are seen as pivotal to Malawi’s broader economic ambitions. Enhanced energy reliability will also encourage more private investment into the country, particularly in energy-intensive sectors.

Nathan Belete, World Bank Country Director for Malawi, Tanzania, Zambia, and Zimbabwe, described the MHSP as a “game-changer.” He emphasized, “As the country works on driving its economic development agenda, this new source of clean and reliable energy will help drive business growth, create jobs, and improve the lives of millions of Malawians.”

Supporting Broader Energy Sector Goals

The Mpatamanga Hydropower Project is one of several high-impact energy initiatives being supported by the World Bank Group in Malawi. Other key projects include:

• Emergency Power Restoration Project: Focused on rehabilitating the Kapichira power station, which was damaged by tropical storms.

• Mozambique-Malawi Regional Interconnector Project: A regional initiative aimed at strengthening cross-border electricity transmission between the two nations.

• Accelerating Sustainable and Clean Energy Access Transformation (ASCENT): Recently approved to improve last-mile electricity access for rural and underserved populations.

These projects reflect a broader commitment by the World Bank to support Malawi’s transition to a sustainable energy future and provide the infrastructure necessary for poverty alleviation and sustainable growth.

The International Development Association (IDA), part of the World Bank Group, plays a vital role in financing critical projects in the world's poorest countries. Since its inception in 1960, IDA has provided over $496 billion to 114 countries. Its focus remains on supporting transformative infrastructure, governance, health, and education programs in nations most in need. The average annual IDA commitment reached about $34.7 billion in recent years, with around 70% allocated to Africa.

With this latest grant, the IDA reinforces its role in driving impactful change through strategic investments that foster resilience, build infrastructure, and empower people across the continent.