All markets


With a cumulative score of 1.77, Malawi ranks number 17 among emerging markets and number 44 in the global ranking.

  • Emerging markets
  • Middle East & Africa

2.23 / 5

Power score

0.70 / 5

Transport score


Buildings score

Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.


Low-carbon strategy

Net-zero goal and strategy

Malawi has not yet set a net-zero emissions goal.

Nationally Determined Contributions (NDC)

The country submitted its updated Nationally Determined Contribution (NDC) ¬– its plan to achieve the goals set out in the Paris Agreement – to the United Nations Framework Convention on Climate Change in July 2021. This lays out an ambition to lower Malawi’s greenhouse gas emissions by 6% in 2040 versus anticipated levels in a business-as-usual scenario, equivalent to a saving of 2.1 million metric tons of carbon dioxide equivalent (tCO2e). With international financial and technological support, Malawi says it could lower its emissions further – by 51% in 2040 versus a business-as-usual scenario, equivalent to 17.7MtCO2 being avoided.

Fossil fuel phase-out policy

Malawi does not have a fossil-fuel phase-out policy.


Power policy

Around 11% of Malawi’s electricity generation came from renewables in 2020. The country’s National Energy Policy document published in 2018 sets out the ambition for this proportion to increase to 16% by 2025, 23% by 2030, and 28.9% by 2035.

Although power purchase agreements (PPAs) have been signed for solar, wind and small hydro, Malawi does not have energy auctions in the strict sense. State-owned single buyer Power Market Limited plans to float a tender for a mix of renewable energy technologies by the end of 2022.

The frequency of power disruptions means many industrial consumers and some individuals have onsite power generation for self-supply. While such facilities have traditionally run on diesel, high costs have led some companies to shift to rooftop solar and the excess electricity they produce can be exported to the grid. A feed-in tariff scheme has been in place since 2012 and is based on capacity or a combination of capacity and energy charges. Energy producers are paid for the net amount of energy sent out.

To encourage clean energy development, import tariffs have been removed for all renewables equipment. However, the quality of imports, especially for solar technology, is often low or non-functional. This has led to frustration and distrust among potential adopters of solar power. In 2019, many products related to solar generation and energy efficiency measures saw their value-added tax rate reduced to zero.

Grid expansion seems to be the government's main policy objective. Malawi is one of the least electrified countries in the world, with an overall electrification rate of around 15%. It is even lower in rural areas at just 6%. The country's rural electrification fund aims to extend the existing grid rather than building off-grid, but has struggled to increase electricity access significantly. The Ministry of Energy has launched the Free Electricity Connection Policy, which will subsidize rural electrification.

Power policies

Renewable energy auction
Feed-in Tariff
Import tax incentives
Net Metering
Renewable energy target
VAT incentives

Power prices and costs

Power producers are allowed to structure their own tariffs subject to approval by the single buyer, Power Market Limited. Power tariffs have steadily increased in recent years so that the national utility, Electricity Supply Corporation of Malawi (ESCOM), can raise revenue and improve electricity access.


Power market

The country’s generation market opened up to participation from independent power producers (IPPs) in 2016. This followed the unbundling of state-owned ESCOM into two separate entities: the Electricity Generation Company (EGENCO) for generation and ESCOM for transmissions and distribution.

IPP deals are increasing but still represent a miniscule percentage of overall capacity. According to the Malawi Energy Regulatory Authority (MERA), 13 licenses were handed out from 2021-22 for generation projects. Still, with no IPP assets yet operational, EGENCO remains the owner of all generation, transmission and distribution assets.

Resource potential for solar and mini-grid solutions is high in Malawi. Though ESCOM has no plans to build solar assets of its own, it has awarded solar PPAs to a number of foreign developers.

EGENCO has around 442 megawatts of installed generation capacity, of which almost 90% is hydro and the remainder diesel power plants. In order to meet fast-growing demand for energy, it is aiming to increase its capacity to 522MW by 2024, 1,257MW by 2029 and 1,631MW by 2034.

Installed Capacity (in MW)

201220142016201820200100200300400500 MW

Electricity Generation (in GWh)

2012201420162018202001K2K3K GWh

Utility privatisation

Which segments of the power sector are open to private participation?


Wholesale power market

Does the country have a wholesale power market?

Not available

Doing business and barriers

Almost all investment in clean energy in Malawi comes from foreign entities, with international development banks being a popular source of capital, and renewable developers operating in the country are all foreign subsidiaries as well. Overall investment does not seem to be growing, which could be due to high inflation and volatile exchange rates shaking investor confidence.

Malawi's almost complete reliance on hydropower from the Shire River is a concentrated risk. If water levels remain low, the country will need a new fleet of generation assets to supply electricity. There are no local manufacturers of equipment for solar, wind, or hydro, so everything is imported. Electricity theft is also an issue that will weigh on developers' financial considerations.

Current fuel prices entail many more levies than the common Malawian can pay, which is bad news because the country is increasingly reliant on diesel generation for emergency power.

Currency of PPAs

Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?

Not available

Bilateral power contracts

Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?

Not available

Fossil fuel price distortions - Subsidies

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?

Not available

Fossil fuel price distortions - Taxes

Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?

Not available


EV market

The government has yet to implement any substantive policy support in this sector, and the electric vehicle market remains at an early stage.

EV policy

The government has yet to implement any substantive policy support in this sector.

Transport policies

Electric vehicle target
Electric vehicle purchase grant or loan incentive
VAT incentives for EV
Import tax incentives for EV
EV charging infrastructure target
EV charging infrastructure support

Fuel economy standards

Does the country have a fuel economy standard in place?

Not available


Buildings market

The government has yet to implement any substantive policy support in this sector, and the low-carbon heat market remains at an early stage.

Energy efficiency policy

Does the country have a national energy efficiency plan?

Not available

Energy efficiency policy

Are there minimum energy performance standards for buildings?

Not available

Energy efficiency incentives

Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?

Not available

Buildings policy

There are no specific laws.

Buildings policies

Low-carbon heat target/roadmap
Tax credits
Boiler scrappage schemes
Heat pumps purchase grants/loans incentive
Ban on boilers: new build homes
Ban on boilers: all homes

Additional insights
from BNEF

Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.

Read more

Powered by

Energy Transition Factbooks

This marks the 11th anniversary of Climatescope, BNEF’s annual assessment of energy transition opportunities. The project has been expanded to include activity not just in clean power but in the decarbonization of the transportation and buildings sectors.

Climatescope 2022 print report cover

Power Transition Factbook

Download factbook
Climatescope 2022 print report cover

Electrified Heating Factbook

Download factbook

Stay up to date

Subscribe to our mailing list to get the latest news about Climatescope directly in your inbox.


© 2023 Climatescope. View license and Privacy policy