Accelerating Sustainable and Clean Energy Access Transformation in Malawi

Off-Grid Solar Home Systems (USD 60 million): This component will focus on scaling up off-grid solar energy solutions, targeting households and communities beyond the reach of current national grid. It is expected to connect 811,000 households (3.4 million people) at an estimated cost of US$116 per connection with a total investment estimated at US$94 million, of which US$60 million will be from the World Bank, leveraging US$34 million from the private sector. This component will be implemented by the MoE through the “Ngwee Ngwee Ngwee Fund” (NNNF), a government-owned energy access fund hosted by the MoE and established with World Bank support in 2023.

Energy Access for Schools and Health Facilities (US$20 million) The component focuses on supporting the electrification of schools and health facilities. It will connect 1,000 schools and 280 health centers that have no electricity access today at an average cost of about US$15,000 per facility. This includes both connections to the grid and off-grid solar informed by the Integrated Energy Plan (IEP) as part of the least cost electrification planning. The project will include a screening of the system design to ensure its resilience, particularly in the face of extreme weather events, such as heatwaves. The total investment for this component is estimated at US$20 million.

Clean Cooking Solutions (US$10 million) This component aims to catalyze the expansion of the market for Tier 4 and 5 modern energy cooking solutions, primarily through the deployment of electric, liquefied petroleum gas (LPG), and pellet-based cookstoves, while supporting a sustainable, private-sector-driven clean cooking market throughout the country. A dedicated clean cooking loan window under the NNNF will be established. This financing mechanism is designed to support small and medium-sized enterprises (SMEs) offering higher-tier modern energy cooking solutions. Subsidized loans will be provided to clean cooking companies, contingent upon the transfer of ownership of their carbon credits to the NNNF. Serving as a carbon aggregator, the NNNF will consolidate the carbon credits and facilitate carbon finance transactions. The resulting carbon revenues will enable the NNNF to subsidize the loans, cover associated transaction costs, and return any surplus revenues to participating companies, supporting operational growth and market expansion. The Energy Sector Management Assistance Program (ESMAP), a trust fund housed in the World Bank, will provide US$5 million in co-financing to this component, with the remaining US$5 million from IDA. The OPEC Fund is expected to provide parallel financing.

Technical Assistance and Capacity Building (US$10.8 million) This component focuses on supporting the ESCOM and MoE in acquiring the necessary capacity and analytical tools to achieve the required tasks under the Project. This includes updating the electrification monitoring platform, revising sect