Influences of Non-Financial Factors and the Sustainability of Micro Hydro Plants in Malawi

Andrew Munthopa Lipunga

doi:10.5539/jsd.v10n3p161

Abstract

The paper evaluates the influence of non-financial factors on the financial sustainability of micro hydro plants (MHPs) in Malawi. It uses case study methodology conducted through interviews triangulated with archival data. The findings suggest the significant role played by non-financial factors on determining the quantity of financing and on long-term financial sustainability for MHPs. This may imply that the difficulties to design suitable sustainable financing models for MHPs may to some extent be attributable to non-financial factors. Therefore when deciding on the appropriate financial measures to address the problem of financial sustainability and in developing financing models of MHPs, consideration should be given to the underlying non-financial factors.

Highlights

Micro-hydro plants (MHPs) are one of the forms of renewable energy (RE) technologies proven to be ideal for rural electrification in the Sub-Sahara Africa (SSA), due to the availability of huge resources (Gaul et al, 2010, KPMG, 2014, IEA, 2014)
As a result calls for the exploitation of MHPs in areas with suitable available resources are being made as a way of addressing the energy crisis since they can be implemented relatively quicker and cheaper (IRENA, 2012; KPMG, 2014)
The interviews revealed that scheme faces a number of challenges that impact adversely on its financial sustainability

Summary

Introduction

Micro-hydro plants (MHPs) are one of the forms of renewable energy (RE) technologies proven to be ideal for rural electrification in the Sub-Sahara Africa (SSA), due to the availability of huge resources (Gaul et al, 2010, KPMG, 2014, IEA, 2014). As a result calls for the exploitation of MHPs in areas with suitable available resources are being made as a way of addressing the energy crisis since they can be implemented relatively quicker and cheaper (IRENA, 2012; KPMG, 2014). One of the major challenges is financing and more especially lack of suitable sustainable financing mechanisms (Klunne, 2009; Taulo et al, 2015; Klunne, 2011; Wohlgemuth, n.d., Pierpont et al, 2011). The effects of other non-financial challenges on financing are scarcely discussed These are significant considerations since financial measures that may be required to be implemented in order to design sustainable financing mechanisms will need to be companied by and coordinated with non-financial measures (IRENA, 2012)

Methods

Results

Conclusion