Government says the Electricity Supply Corporation of Malawi (Escom) will stop buying fuel for Aggreko Power Solutions Limited to generate power using generators.

Vice President Saulos Chilima made the announcement on Friday after meeting officials from Escom, Electricity Generation Company (Egenco), Malawi Energy Regulatory Authority (Mera), the Ministry of Energy and the Public Sector Reforms team.

The move follows revelations by an audit report that Escom is losing billions of kwacha per month to Aggreko to honour the power generators deal.

In his published daily update on Friday, Chilima said it is illogical for Escom to be buying fuel to supply to Aggreko and in return buying power from Aggreko using the same fuel.

Chilima said Escom has since been given 30 days to resolve the issue with Aggreko.

He said Escom has also been advised to avoid signing agreements that do not make financial sense.

Chilima also disclosed the financial and asset dispute between Escom and Egenco involving the K1.8 billion average monthly bill which Egenco charges Escom will be resolved by Friday next week.

“On Tuesday, Treasury will meet with the two institutions to spell out the way forward following the resolutions that have been made,” said Chilima who also doubles as Minister of Economic Planning and Development and Public Sector Reforms.