The government of Malawi officially launched the US$350 million Malawi Transport and Land Compact in partnership with the Millennium Challenge Corporation (MCC) on the sidelines of the US-Africa Business Summit being held in Dallas between 6 and 9 May.

Signed in September 2022, the compact aims to reduce transport costs in Malawi by upgrading more than 300km of roads to connect farmers to markets and strengthen the country’s land administration.

The high price of road freight transport and access to land for investment are considered key constraints on economic growth in Malawi.

According to Malawi's President Lazarus Chakwera, groundbreaking ceremonies for specific initiatives under the compact will be held soon.

The compact consists of three main schemes: the Accelerated Growth Corridor (AGC); Increased Land Productivity; and the American Catalyst Facility for Development (ACFD).

The AGC has an estimated cost of US$245 million and involves upgrades and improvements across four road corridors in prime agricultural areas. These include the Mkanda-Linga (ML-5) corridor in the central Mchinji and Kasungu districts; Chikwawa-Euthini (CE-15) in the northern Mzimba and Rumphi districts; Chileka-Likuni (CL-9A) in the capital Lilongwe; and Chamtulo-Mkutumula (CM-10) in the southern Mangochi and Ntcheu districts.

The AGC also prioritises road safety, future maintenance and increased competition by helping the government address policy and legislation and institutional and funding challenges that limit further road improvements.

The Increased Land Productivity component, estimated to cost US$44.1 million, will support improved land services, better functioning markets, and increased investment in land. It will promote revenue-driven investments to increase funding of Malawi’s land institutions and support institutional change in the sector.

About US$8.5 million has been earmarked for the ACFD to facilitate US International Development Finance Corporation (DFC) investment in Malawi to catalyse private sector investment.

The Malawian government will contribute an additional US$26.5 million for the compact.

MCC, an independent US government agency, and the Malawian government first partnered in 2004 with a US$20.9 million threshold programme designed to fight corruption in the country.

A US$350.7 million energy-focused compact followed in 2011, which built infrastructure to connect Malawi to the Southern African Power Pool and expanded access to reliable power through the construction and refurbishment of 22 substations and 367km of transmission and distribution lines, delivered 12MW of clean energy and supported the reforms necessary to bring independently produced power onto the national grid.

Altogether, MCC’s grant programmes in Malawi include more than US$747 million-worth of projects in the transportation, power and agriculture sectors, benefiting more than 12 million people, or about half the country’s population.

Another deal involving Malawi was also signed at the US-Africa Business Summit. The US Trade & Development Agency (USTDA) announced it would provide grant funding for Mzuzu WF Limited to conduct a feasibility study for a 50MW wind farm. The project will include battery energy storage.

Malawi currently has an electrification rate of 12.4% and the government aims to increase this to 30% by 2030.