African Commercial Insurance Agency (ACA) has secured a $67 million investment in the 37 MWp Nkhotakota solar photovoltaic project in central Malawi.

The ACA explained that "solar energy aims to provide a more sustainable solution for access to stable and reliable electricity."

The guarantee was issued under the Regional Liquidity Support Facility, a mechanism that ensures short-term liquidity to Independent Power Producers.

As mercadosafricanos writes, citing the ACA, "the Nkhotakota Solar Power Plant is part of the Malawi government's plans to reduce the country's dependence on hydropower."

The aim is to cover the risk of late payment by the national power companies, which currently accounts for more than 90 percent of current electricity production, making the country vulnerable to frequent power cuts that usually occur in times of drought.

The Nkhotakota solar project is being developed by a consortium formed by Renewable Energy Holding (RAREH), a Kenya-based investment company, and IPP of the Phanes Group of the United Arab Emirates.

The solar plant will be built in two phases: the first will have a production capacity of 21 MWp and the second, in central Malawi, will produce 16 MWp.

The 37 MWp facility will be covered by a Power Purchase Agreement (PPA) signed between the two owners and the state-owned Electricity Supply Corporation of Malawi (ESCOM).

Under the terms of the agreement, ESCOM will buy the power for a 20-year period and supply electricity to 150,000 households in Malawi.