Abstract:
Malawi is in power crisis. She has one of the poorest rate of electrification with rural areas, where majority (over 80%) of the people live, being worst hit. Ironically the country sits on huge untapped renewable energy resources that if extracted can transform her to energy sufficiency. One form of renewable energy ideal for rural electrification in the country are micro-hydro plants (MHPs). However the technology has not being widely deployed as it faces the problem of lack of sustainable financing models i.e. lowest cost, long term financing models. This study was aimed at examining the key factors underlying the difficulty to develop these financing models in Malawi. The study used the van Egmond and de Vries’ sustainable finance model supported by systems thinking and life cycle model as the theoretical framework. It employed a qualitative research design utilising the grounded theory methodology. It was conducted in two phases: the conceptual phase in order to develop theoretical understanding of the key variables that make up and influence MHP sustainable financing; and the empirical phase that was undertaken through a case study of the Bondo Micro-hydro Scheme. The study identified “MHP market development” and “MHP infrastructure development and operation” as key components of the MHP physical system, that dictate the behaviour of MHP financial system. The two main influences of the components on the financial system were determination of the quantity of finance to be mobilized and facilitation of resource mobilisation. The study revealed that uncertainties within the constituent elements of the two components bring unsteady-state to the entire financing system as a result affecting financial sustainability. Further to that the study revealed two efficiency-oriented avenues through which the costs of MHPs can be lowered in Malawi. These include (1) streamlining and localising MHP physical system activities; and (2) ensuring active engagement of all relevant stakeholders. The major limitations of the study include the facts that the study was largely theoretical and that it was based on a single case study which is still in the developing stage. The study recommends the following areas for future research: (1) empirical studies to further test the analytical framework that emerged in this study; (2) comparative financial sustainability studies between vii the Sub-Saharan African countries with other developing countries where MHPs have been a success story such as Nepal and India; (3) comprehensive stakeholder analysis within the context of MHP financial sustainability; and (4) studies on the extent to which MHP physical activities can be streamlined and localised as ways of cost containment.
Description:
Submitted to the Department of Physics and Biochemical Sciences, Faculty of Applied Sciences,
in fulfilment of the requirements for the degree of Master of Philosophy (Renewable Energy)
