Malawi’s Attorney General, Hon. Thabo Chakaka-Nyirenda, delivered a compelling keynote address during Paris Arbitration Week, focusing on the critical and often overlooked nexus between sovereign debt and Africa’s energy transition.
Speaking under the theme “Energy Transition in Africa: Arbitration at the Crossroads of Sustainability and Development,” the Attorney General emphasized the importance of strategic, transparent, and legally sound sovereign borrowing to support sustainable development.
Chakaka-Nyirenda acknowledged that financing Africa’s clean energy ambitions requires substantial capital, which often comes in the form of sovereign debt sourced from multilateral institutions, bilateral partners, or private markets.
However, he warned that such debt, if mismanaged, poses significant threats to national sovereignty and long-term economic progress.
“Debt, if mismanaged, can erode national sovereignty and undermine long-term development,” he stated, urging African governments to exercise diligence and foresight in negotiating debt terms.
The Attorney General identified key risks associated with the financial structuring of energy projects, particularly those involving Power Purchase Agreements (PPAs), sovereign guarantees, and arbitration clauses under international treaties.
He highlighted that these instruments, while crucial to ensuring bankability for investors, can expose states to contingent fiscal liabilities that strain public finances and limit policy flexibility.
He cautioned against rigid “take-or-pay” clauses that lock governments into unfavorable contractual obligations, calling instead for balanced agreements that align with national development priorities.
In his address, Chakaka-Nyirenda outlined a framework for responsible sovereign borrowing. This includes assessing the necessity and sustainability of loans, negotiating fair and development-friendly terms, avoiding legal traps in project structuring, and embedding accountability in every stage of loan administration.
“Let us not allow contractual rigidity to create developmental traps,” he warned. “Let the law serve as both shield and guide.”
Highlighting Malawi’s own approach, the Attorney General explained that the country is investing in renewable energy projects—including solar, hydropower, and biogas—while simultaneously strengthening its legal and institutional capacity to manage these projects.
The goal, he noted, is to ensure that energy projects are not only sustainable and bankable, but also legally predictable.
“Our approach is simple: honour contracts, uphold the rule of law, and deliver for the people,” he affirmed.
Chakaka-Nyirenda further emphasized that legal capacity within African governments is essential to preserving development sovereignty.
He urged states to invest in legal expertise to ensure they can negotiate on equal footing with financiers and international investors.
By doing so, African nations can avoid fiscal pitfalls and protect their right to steer development in ways that prioritize local needs and long-term sustainability.
The Attorney General’s speech served as a broader call to action for African countries to view the energy transition not just as an environmental or technical process, but as a deeply legal and political journey. He urged governments and institutions to ensure that legal systems are robust enough to guard against debt distress and to support sustainable development outcomes.
His address resonated with an audience of more than 500 participants attending the global legal forum, reinforcing the message that sovereign debt must be handled with the same care, strategy, and accountability as the energy projects it is meant to finance.
In positioning law at the heart of Africa’s clean energy future, Chakaka-Nyirenda called on stakeholders to “choose a legal order that empowers people, protects the planet, and honours our common future.”
