Building on the U.S. Government’s first Millennium Challenge Corporation Compact in Malawi, which focused on improving the availability and reliability of and access to electricity, Power Africa is now assisting Malawi’s Electricity Generation Company (EGENCO) to improve commercial performance and increase electricity generation.
Malawi continues to build on its recent energy sector reform efforts, which included unbundling the national utility, ESCOM, and establishing a separate generation company, EGENCO. Formed in 2016, EGENCO is executing a 15-year strategic plan that aims to diversify energy generation and increase Malawi’s capacity by 1,000 megawatts (MW) to produce more reliable power for businesses, schools, farms, and homes across the country.
To achieve the strategic plan goals, EGENCO needed to increase institutional capacity and establish information management and performance monitoring practices. In support, Power Africa collaborated with EGENCO to develop and implement a performance monitoring and evaluation (M&E) process, which included the development of key performance indicators (KPIs), a balanced scorecard (BSC) to track strategic plan objectives, and the establishment of a new M&E department to manage the process going forward.
Setting up the performance management system entailed an assessment of EGENCO’s performance management culture to identify gaps and detail recommended improvements. Through hands-on training workshops and collaboration over 16 months, Power Africa guided EGENCO to a fully implemented process and scorecard to monitor, evaluate and report performance.
Power Africa also helped several EGENCO departments achieve their strategic and operational objectives by developing measurable and realistic KPIs. This process involved determining the feasibility of existing targets and expected outcomes based on financial, human resource and asset constraints and modifying them as needed. KPIs were aggregated into a BSC to enable each department to strategically plan activities and manage results.
As a result of the new performance system, EGENCO added 33 MW of generation capacity to its fleet in February 2020. This increase is significant as it represents about 11 percent of EGENCO’s installed capacity and amounts to enough electricity to supply almost 30,000 households.
“On behalf of EGENCO I would like to express our appreciation for the support that Power Africa provided to EGENCO on improving performance. With Power Africa’s support, EGENCO now has a clear process for M&E to achieve the objectives of our plan.” — William Liabunya, CEO, EGENCO
By designing appropriate performance measurement instruments, and aligning targets with a reachable timeframe and feasible ranges for those targets, EGENCO can now monitor, evaluate, and deliver achievable objectives. Through this process, EGENCO’s focus changed from an initial 106 projects outlined in its strategic plan to nine targeted and achievable projects, which led to the rehabilitation of three hydropower and diesel plants to increase generation capacity. Power Africa and EGENCO continue to review the implemented processes and look for ways to improve operations for long-term sustainability.
Boosting Operational Performance through Gender Equality
Through USAID’s Engendering Utilities program, Power Africa also supports EGENCO’s efforts to build a culture of gender equality within the company, which studies show can enhance employee satisfaction, reduce employee turnover, and drive productivity — helping companies enhance operational performance and meet business goals. EGENCO’s actions to improve gender equality include updating the company’s Gender and Social Inclusion Policy (in draft) to reflect the cultural environment in which the utility operates, offering internships to women studying engineering, and conducting training on gender awareness and mainstreaming for employees at all levels.