Malawi's Ambitious Lake Water Project Faces Critical Funding Timeline Pressure
With Lilongwe's population fast approaching two million and the current water infrastructure proving insufficient, the project's timely completion is crucial.
SALIMA, Malawi — Under the scorching Malawian sun, massive construction equipment dots the landscape along what will become a 115-kilometre pipeline carrying water from Lake Malawi to the parched capital city of Lilongwe, writes Winston Mwale.
The K260 billion project represents one of the country's most ambitious infrastructure undertakings, but contractors Khato Civils warn that maintaining steady cash flow is crucial to meeting the 2026 completion deadline.
"In mega-projects like this, they are highly capital intensive. The program needs to go in tandem with the cash flow," says Pride Phiri, Khato Civils Group director of finance, during Thursday's site inspection tour attended by officials from the Ministry of Water and Sanitation, the Reserve Bank of Malawi, and key financing partners.
Phiri's concerns stem from the intricate nature of these projects, where procurement and construction schedules are intertwined with the availability of funds.
Delays in payments could disrupt the delicate balance, causing ripple effects throughout the project's implementation.
This vulnerability is amplified by the project's reliance on materials with long lead times—some requiring six to eight months for production.
This anxiety is not unfounded. Khato Civils has already poured a substantial $81 million into the project, with $50 million coming from government-arranged financing through local banks.
However, Phiri emphasises that timely payments are critical given the long lead times required for specialised equipment and materials.
"Some components we need for the project have lead times of six to eight months," Phiri explains.
"If you delay payments from the client, then the whole project timeline is out."
Phiri's appeal for timely funding resonates with the realities of large-scale infrastructure projects in developing countries, where financial constraints are often a recurring challenge.
He assured stakeholders that Khato Civils has engaged transparently, providing detailed cash flow projections to outline the required payments over the project's lifespan.
The government, which is contributing 30 percent of the project cost, with the remainder coming from investors, maintains that payment schedules are being honoured.
Despite these concerns, Elias Chimulambe, Principal Secretary for the Ministry of Water and Sanitation, sought to allay fears, reaffirming the government's commitment to honouring the agreed payment schedule.
He stated, "In terms of payment, we are okay. We have done it. What they are doing, they are doing based on what we agreed, and the payment schedule is on course."
He pointed to the initial payments for mobilisation and work commencement as evidence of their adherence to the agreement.
"We have paid Khato Civils on what we agreed on the mobilisation and also for them to start their works."
Chimulambe expressed confidence in the project's timely completion, stating, "By 2026, this project is complete."
Chimulambe expressed satisfaction with the progress during Thursday's inspection, which included stops at Chezi, Kanyenyeva, and Lifuwu sites, as well as the proposed lake pumping station.
"We are impressed with what we have seen. They have all the materials in place; they have the steel; they have all other equipment suitable for the work that they are doing."
While the Salima-Lilongwe Water Supply Project promises much-needed relief to Lilongwe's growing population, the project's construction necessitates the acquisition of land along the pipeline's 125km path.
This raises the crucial issue of compensation for communities affected by the project.
Chimulambe addressed this, assuring that compensation is being handled responsibly.
"We started with the compensation. We have compensated people, especially those that were staying in the areas where construction has started," he confirmed.
This proactive approach has allowed construction to proceed smoothly in those areas.
Chimulambe acknowledged that compensation is an ongoing process, particularly with the upcoming trench-digging phase.
He explained: "When we start trench digging, we'll be able to also compensate those areas where we haven't compensated."
This suggests a phased compensation plan, aligned with the project's various construction stages.
"Some of the areas people have cultivated, we wait for them. By April, they will have harvested, then they'll give us the way to continue the construction," Chimulambe explained.
This sensitivity to the agricultural cycle demonstrates a willingness to accommodate local needs while still aiming to maintain the project's overall timeline.
Key takeaways regarding compensation:
● Compensation is being provided to those whose land is being used for the project.
● The process is ongoing and will continue as construction progresses.
● There is a planned delay to allow for the harvesting of crops before taking possession of land.
The project's scope extends beyond Lilongwe, with communities along the pipeline route in Salima and Dowa districts also set to benefit from improved water access.
Meanwhile, Tinofirei Mawanza (see video above), Khato Civils’ senior project and design engineer, reports that construction is ahead of schedule, despite looming seasonal challenges.
"We don't foresee any disruptions from the rains," he says, noting that weather patterns were factored into the 24-month timeline.
"In our planning, we already took notice of things like your public holidays in the country where we are operating."
He said the water project aligns with Malawi's commitment to UN Sustainable Development Goal 6, which focuses on ensuring access to water and sanitation for all.
"This will improve significantly the residents or beneficiaries in Lilongwe city as a whole, alongside beneficiaries along the pipeline route," Mawanza notes, adding that the project will also transfer valuable skills to local workers in various disciplines, from plumbing to electrical engineering.
The project, which will deliver 50 million litres of potable water daily to Lilongwe's growing population of nearly two million residents, involves complex engineering challenges.
The intake structure will extend 500 meters into Lake Malawi, feeding water through a sophisticated treatment system before pumping it across three districts via a 1,200-mm-diameter ductile iron pipeline.
The construction includes multiple clear water reservoirs and pumping stations, with the first 5,000-cubic-meter tank being built at Lifuwu in Salima.
Water will then be pumped to Kanyenyeva and onto the Dowa Turnoff before gravitating to Kanengo tanks for distribution through the Lilongwe Water Board's existing system.
Local financing has been crucial to the project's launch, with NBS Bank serving as lead arranger alongside CDH Investment Bank.
The banks' representatives recently conducted due diligence visits to manufacturing facilities in South Africa, where specialised equipment like the modern Karoo 50 concrete batching plant—the first of its kind in Malawi—is being produced.
With Lilongwe's population fast approaching two million and the current water infrastructure proving insufficient, the project's timely completion is crucial.
The consortium is even considering doubling the water abstraction rate to 100 million litres daily to meet future demands.
As construction activities intensify, all eyes remain on the project's financial mechanisms.
"We appeal to the financiers... we showed them the level and amount of work we have done so far, which they have seen is even beyond the amount they've paid," Phiri emphasises, underlining the critical relationship between steady funding and successful project delivery.