BLANTYRE--A top United States official on Friday urged Malawi to adhere to political and economic governance system for the poor southern African state to sustain the $350 million (278 million Euros) restored aid for the energy sector.

"The US government is closely following developments in Malawi as the new administration implements reforms for a better governance system," Daniel Yohannes, executive director of the Millennium Challenge Corporation (MCC), was quoted by state radio telling reporters.

"During this period, critical policy reforms need to be sustained and expanded," Yohannes said.

The US last month restored aid to Malawi's energy sector following reforms under new Pres Joyce Banda, who assumed power following the death of Pres Bingu wa Mutharika in April.

The MCC last year suspended the funds, citing a deteriorating human rights situation in the country under Mutharika. His successor, Banda, has tried to restore the confidence of donors in Malawi.

Yohannes, who held talks with Banda, said the power programme to refurbish the crumbling sector will take long for its benefits to be felt by the country.

"It will not be easy. The project is ambitious and complex...it will take several years for MCC-funded investments to be felt by the people as new infrastructure is designed, procured and constructed across the country.”

The project will go towards upgrading the country's energy grid and will provide benefits to five million people, according to the MCC.

The MCC board of directors voted to lift the suspension of the "compact", saying it recognised that the Banda administration had taken "decisive action to restore democratic accountability, to demonstrate respect for the rights of individuals and to implement sound economic management."

The US-government body assists developing countries that commit to standards on democracy and basic rights and claims to be Malawi's largest donor.

In May, the US commended Banda's "bold actions" to reform the government.

The president, also quoted by state radio, told Yohannes the project was a "huge relief" to power-short Malawi. "The investment will help reduce power outages and technical losses and will lead to increased productivity in the industrial sector," she said.

Malawi's power, generated from several hydro-schemes on the Shire river which flows out of Lake Malawi, produces 250 megawatts against a demand of 320.

The country plans to purchase extra power from neighbouring Mozambique.
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©2012 The Maravi Post. Reproduction authorised, with usual acknowledgment.