Inadequate energy supply is one of the major problems confronting Malawi and limiting its social, economic and industrial development. This paper reviews the current status of energy supply and demand in Malawi; examines the major sources of energy, current exploitation status and their potential contribution to the electricity supply of the country; discusses key issues facing the energy sector; and identifies broad strategies to be implemented to tackle the energy supply challenges. Using secondary data for its critical analysis, the paper also presents modelling of long-term energy demand forecast in the economic sectors of Malawi using the Model for Analysis of Energy Demand (MAED) for a study period from 2008-2030. Three scenarios namely reference (REF), moderate growth (MGS) and accelerated growth (AGS) were formulated to simulate possible future long-term energy demand based on socio-economic and technological development with the base year of 2008. Results from all scenarios suggest an increased energy demand in consuming sectors with biomass being a dominant energy form in household and industry sectors in the study period. Forecast results reveal that energy demand will increase at an annual growth rate of 1.2% and reach 5160 ktoe in 2030 under REF scenario. The growth rates for MGS and AGS are projected at 1.5% each reaching 4639 ktoe and 5974 ktoe in 2030, respectively. The final electricity demand of about 105 ktoe in the base year will grow annually at average rates of 13.8%, 15.3% and 12.6% for REF, AGS and MGS, respectively. Over the study period 2008-2030 the annual electricity per capita will increase from about 111 kWh to 1062, 1418 and 844 kWh for the REF, AGS and MGS, respectively. The final energy intensity will decrease continuously from about 13.71 kWh/US$ in the base year to 3.88 kWh/US$, 2.98 kWh/US$ and 5.27 kWh/US$ for the REF, AGS and MGS, respectively in the year 2030. In conclusion, the paper outlines strategies that could be utilized to ensure adequate supply of modern energy which is a key ingredient for achieving sustainable social and economic growth.