Sovereign signs MOU for power supply as World Bank backs Malawi’s hydropower ambitions

Nkhoma substation has capacity for connection to the Kasiya operation (Source: Millenium Challenge Corporation, USA).

Sovereign Metals Ltd has signed a non-binding Memorandum of Understanding (MOU) with the Electricity Supply Corporation of Malawi (ESCOM) to secure long-term renewable energy supply for its Kasiya Rutile-Graphite Project. The agreement outlines a path to access 60 megawatts (MW) of hydropower through a grid connection to the Nkhoma Substation, supporting steady-state operations at Kasiya from year six.

This development coincides with a significant energy milestone for Malawi. The World Bank has approved a US$350 million (AU$545M) grant to support the landmark Mpatamanga Hydropower Storage Project (MHSP), which will add 358MW of capacity to Malawi’s national grid by 2030. The dual developments are pivotal for both Kasiya’s feasibility and the country’s broader economic infrastructure.

“The signing of the MOU ensures we have a workplan to secure access to a renewable, hydro-based power supply for Kasiya,” managing director and CEO Frank Eagar said.  

“The future development of the Mpatamanga Hydro Project — expected to commence operations in 2030 — will further enhance the stability and capacity of Malawi’s electricity network. This also reflects ongoing foreign direct investment in Malawi’s infrastructure by the World Bank, IFC, and leading global energy companies such as EDF and TotalEnergies.”

The MOU provides a framework for Sovereign and ESCOM to negotiate two future binding agreements: a Project Implementation Agreement for constructing a 132kV overhead transmission line and a Power Supply Agreement for grid electricity. Malawi’s current grid capacity stands at 351MW, with hydropower contributing 98%.

Malawi’s total installed electricity capacity currently stands at 351 megawatts (MW), with hydropower contributing around 98% of this supply. During Stage 1 of operations, the Kasiya project is expected to require 30 MW of power, rising to 60 MW at steady-state production by Year 6.

The MOU supports Sovereign’s upcoming Definitive Feasibility Study (DFS), expected in the fourth quarter of 2025. The agreement is non-binding, expiring in June 2026 unless extended.

Powering the world’s largest natural rutile and graphite operation

Kasiya’s 25-year mine plan targets average annual production of 222,000 tonnes of natural rutile and 233,000 tonnes of flake graphite. A 132kV line will link the mine to the Nkhoma substation, 97 kilometres away, selected for its reliability and feasibility. A 132/33kV bulk intake substation will be built at the project site to manage supply.

Once operational, Sovereign aims to become the largest global producer of natural rutile and natural graphite, positioning Kasiya as a critical supplier to energy and industrial sectors.

Kasiya hosts Probable Ore Reserves of 538 million tonnes grading 1.03% rutile and 1.66% total graphitic carbon, with a combined rutile-equivalent grade of 2.00%. The total Mineral Resource Estimate stands at 1.8 billion tonnes across Indicated and Inferred categories.

Mpatamanga project to transform Malawi’s energy sector

The US$1.5 billion MHSP is co-developed by the Malawian Government and the International Finance Corporation (IFC), with backing from EDF, British International Investment, Norfund, and TotalEnergies. It will deliver clean energy, stored power for peak usage, and support grid stability.

According to the World Bank, the project is driving growth in mining, agri-business, and tourism, while improving energy access for millions. Additional World Bank projects include the Kapichira rehabilitation, the Mozambique-Malawi interconnector, and the ASCENT electrification initiative.

 MHSP hydro infrastructure (Source: World Bank).

Nathan Belete, World Bank Division director for Malawi, Tanzania, Zambia and Zimbabwe commented: “This new hydropower project is a game-changer for Malawi, capable of catalysing transformative change in productive economic sectors such as mining, agri- business and tourism. As the country works on driving its economic development agenda, this new source of clean and reliable energy will help drive business growth, create jobs, and improve the lives of millions of Malawians.”

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