Ground-mounted solar farm with 6 MWh battery storage in Nkhata Bay District, Malawi — targeting a 25-year USD-denominated PPA with ESCOM at $0.084/kWh.
Kapenyeka Solar is a 20 MWac / 26.06 MWp ground-mounted solar photovoltaic farm with a 6 MWh battery energy storage system (BESS), located in Kapenyeka Village, Nkhata Bay District, in the northern region of Malawi. The project is being developed by PTW Investments Ltd and presented to institutional investors through Santi Capital's project pipeline.
The site is positioned at an altitude of 500 metres above sea level on generally flat terrain, with excellent solar irradiance exceeding 1,700 kWh/kWp/m² annually. The plant will connect to the existing 132 kV Chintheche-Luwinga transmission line via a loop-in loop-out (LILO) connection, approximately 4.6 km from the Chintheche substation. The project targets a 25-year Power Purchase Agreement (PPA) with ESCOM (Electricity Supply Corporation of Malawi) at a USD-denominated tariff of $0.084/kWh, providing investors with USD revenue in a dollarised contract structure.
Investment structure note: The memorandum lists total investment at approximately $30–35 million and estimated CapEx at $35 million. Land compensation costs are described as not yet assessed. The developer has paid all government fees and allowances related to land acquisition; however, the final compensation liability to the 27 families (175 people) currently occupying the site has not been determined at the time of the memorandum.
The Kapenyeka site covers a total of 79 hectares of customary land, of which 34 hectares are allocated to the power plant and offices and 45 hectares are reserved for staff housing, recreation facilities, and potential future capacity expansion. The site is characterised by flat-lying topography at 500 m ASL, with well-drained ferrisol (clay-loam/clay) and lithosol (shallow, stony) soils and no reported flood risk, all of which are favourable conditions for a ground-mounted fixed-tilt installation.
The 79-hectare site is classified as customary land currently occupied by 27 families comprising approximately 175 people. The land acquisition process is being managed through MITC (Malawi Investment and Trade Centre), and a sub-lease arrangement is planned for PTW Investments Ltd. The developer has paid all government fees and allowances for land acquisition; however, the land compensation assessment for the 27 families has not yet been completed, and the final cost is not yet determined. This represents a material open item for investor due diligence.
The plant uses ground-mounted fixed-tilt technology in a single-array shed configuration, reflecting the flat terrain and the irradiance profile of the Nkhata Bay site. The BESS is specified as a Jinko SunTera energy storage system, with two 3.44 MWh units combined into a single 3.45 MVA / 6.88 MWh assembly. Grid connection is achieved via a loop-in loop-out (LILO) arrangement onto the existing 132 kV Chintheche-Luwinga high-voltage line.
The P50 estimate represents the median expected annual output — exceeded in 50% of years — while the P95 estimate represents output expected to be exceeded in 95% of years and is used by lenders as a conservative downside production scenario for debt serviceability assessment.
The P95 / P50 ratio of approximately 94.9% indicates a relatively tight yield distribution, consistent with the high and stable irradiance profile at the Nkhata Bay site (>1,700 kWh/kWp/m²). The 5.0% P50–P95 gap is a favourable resource risk indicator for debt service analysis.
The project's revenue model is straightforward: energy produced is sold to ESCOM under a proposed 25-year Take-or-Pay Power Purchase Agreement at a fixed tariff of $0.084/kWh with no annual escalation. The USD denomination of the PPA provides investors with direct hard currency revenue exposure in a country whose local currency (Malawian Kwacha) is subject to exchange rate volatility. At the P50 annual yield of 44.75 GWh, the gross revenue before operating costs is approximately $3.9 million per year.
As of the Investment Memorandum, the PPA with ESCOM has not been signed. Negotiations are described as in progress. The $0.084/kWh tariff represents the proposed rate and is subject to change through the negotiation process. IRR and revenue projections are therefore contingent on a PPA being successfully executed at or near the proposed terms.
The total estimated CapEx is $35 million. The memorandum notes that land compensation costs — payable to the 27 families to be resettled — have not yet been assessed and are therefore not included in the CapEx estimate. This constitutes an additional and currently unquantified cost item. A full financing structure (debt/equity split, lender identity, credit enhancement) is not presented in the memorandum and is subject to the outcome of the financing process.
[Inferenza] The above derived metrics are calculated by Santi Capital from memorandum data for informational reference only. They do not represent IRR, NPV, or levered return projections, which cannot be calculated without a defined financing structure.
The project is at an advanced pre-construction development stage. Several foundational approvals have been obtained, including the Environmental and Social Impact Assessment (ESIA), district council development plans, and grid connection application submission. The PPA negotiation, land compensation, and multiple operating licences remain outstanding. The memorandum targets completion of all remaining permits by December 2025, with construction commencing January 2026.
The Investment Memorandum discloses a range of technical, regulatory, commercial, and social risks associated with the project. These are reproduced here accurately and in full, as presented by the developer. Santi Capital has not independently verified the adequacy of the mitigation measures described. A detailed Environmental and Social Management Plan (ESMP) and monitoring plan have been developed as part of the ESIA to address the identified social and environmental risks.
Santi Capital facilitates introductions to the project developer for qualified institutional investors wishing to explore the Kapenyeka Solar investment opportunity in detail.
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