The African Development Fund's (ADF) Board of Directors has approved a grant of $22.9 million for the rehabilitation of Malawi's Kapichira and Nkula B hydropower plants, marking a transformative investment in the nation's energy future.
The $118.7 million initiative, with co-financing opportunities, will rehabilitate two critical power generation facilities--Kapichira I (64 MW), located in Chikwawa District and serving the southern region, and Nkula B (100 MW), Malawi's oldest major hydropower station, built in 1966--that currently supply approximately half of Malawi's electricity even while operating significantly below capacity due to ageing infrastructure and recent cyclone damage.
"This project represents a cornerstone investment in Malawi's economic transformation," said Macmillan Anyanwu, African Development Bank's country manager for Malawi. "By restoring these hydropower plants to optimal performance, we are not just fixing infrastructure--we are unlocking economic potential, creating jobs, and bringing reliable electricity to communities that have struggled with chronic power shortages."
The rehabilitation will increase annual energy generation by 55%--from 916 GWh to 1,426 GWh--while extending the operational life of the ageing facilities from 22 years to 47 years. The plant's performance is expected to improve from 80% to 95%, virtually eliminating the forced outages that have plagued Malawi's electricity supply.
Malawi faces acute energy poverty. Only 25.9% of the population has access to electricity, one of the lowest rates in Africa. The situation deteriorated further in 2022 after Tropical Storm Ana severely damaged the Kapichira plant, which accounts for 30% of the country's generating capacity.
The project directly supports Malawi's Vision 2063 and the Malawi Energy Compact signed in January 2025 under the Mission 300 initiative, which aims to provide electricity access to 300 million Africans by 2030. Beyond the numbers, reliable electricity will enable expansion of agriculture, mining, and manufacturing sectors, reduce business costs associated with diesel generators and power outages, improve healthcare delivery and educational outcomes, support Malawi's urbanization goals and regional integration through the Southern Africa Power Pool, and climate resilience at the core
The Government-owned Electricity Generation Company will serve as the executing agency, with implementation scheduled from March 2026 to December 2030.
The rehabilitation project positions Malawi to capitalize on upcoming regional opportunities. These include connection to the Southern Africa Power Pool via the Mozambique-Malawi interconnector, potential integration with the East Africa Power Pool through the proposed Malawi-Tanzania interconnector, synergies with planned transmission infrastructure upgrades (132kV Eastern backbone, 400kV Western backbone), and enhanced ability to absorb additional generation from the upcoming 358 MW Mpatamanga hydropower plant.
