Malawi's government has signed a memorandum of understanding with Chinese contractor Xiao Xiang Investment to expand the fleet and infrastructure serving Lake Malawi, in a deal that will see four new vessels built alongside a new port facility at Chipoka in Salima.

Under the agreement, signed at Capital Hill in Lilongwe, Xiao Xiang will construct two dry cargo vessels, one fuel tanker, and one passenger vessel, intended to complement and eventually replace the country's ageing flagship passenger ship, MV Ilala.

Bright Kumwenda, Principal Secretary for the Ministry of Transport and Public Works, said the timing of the deal was significant, given that the Ilala -- operated by Malawi Passenger Service -- is due for major rehabilitation work.

He said bringing new vessels into service would allow authorities to take the Ilala out of operation for repairs without disrupting the lakeshore communities that depend on it.

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Kumwenda said the partnership was also intended to address Malawi's heavy reliance on road transport for moving goods.

"Once operational, the new ships and port are expected to cut logistics costs, ease pressure on the M1 highway, and open up cheaper trade routes across the region.

"This will strengthen water transport, support cross-border trade, and make it easier for our agricultural and mineral products to reach markets," he said.

Chen Cheng, managing director of Xiao Xiang Investment, said the agreement would help address Malawi's transport challenges and reduce the cost of doing business in the country.

He said the company would support Malawi's integrated transport system by building new oil tankers and freight vessels, and by upgrading inland lake ports, including the Chipoka ferry terminal.

"The construction of tankers will better serve NOCMA and PIL companies, greatly improving the efficiency and volume of transportation while reducing cost," Cheng said, adding that new freight vessels would open a direct corridor linking Malawi to ports in Tanzania and Mozambique.

Cheng said shipping would also help reduce wear on the M1 road caused by heavy trucks, and would allow operations to continue uninterrupted during the rainy season, when road transport is often disrupted.

He said the cooperation would extend beyond vessel construction to include logistics storage parks, skills training for Malawians in road, rail and port management, and support for community projects along transport routes, stressing a commitment to low-carbon, environmentally compliant infrastructure.

"This MoU is a new starting point for cooperation, not the end. In the near future, we will form joint teams to advance project due diligence, overall planning, programming, and investment and financing proposals," Cheng said.

He expressed confidence that, under the Belt and Road Initiative, the transport partnership would become a benchmark for China-Malawi cooperation and contribute to Malawi's broader development goals.

Kumwenda confirmed that one of the four vessels is expected to be ready for sailing within a year, alongside Xiao Xiang's commitment to constructing a separate port facility in the Northern Region.

The wider project, whose financial details have not yet been disclosed, is expected to link Chipoka port in Salima with Kaporo in the Northern Region, supporting the transportation of dry cargo, including coal, which is widely used by industries in the Central Region.