GOVT SEEKS OVER E1.7BN FOR CLEAN ENERGY TRANSFORMATION

MBABANE - Eswatini is taking a bold step towards a cleaner and more energy-efficient future, with government seeking to secure over E1.7 billion (equivalent to over €85 million). Government seeks to access this funding from international financing to support a major energy transformation project.

Two separate financing Bills will be tabled before Parliament by the Minister for Finance Neal Rijkenberg, each aimed at funding the Accelerating Sustainable and Clean Energy Access Transformation in Eswatini Project. The funding will come from two global financial institutions: The International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD)—both part of the World Bank Group.

The financing includes a €37 million (about E740 million) soft loan from the IDA and a €48.3 million (approximately E966 million) loan from the IBRD. Combined, the two agreements will provide €85.3 million (or roughly E1.706 billion) to help increase access to electricity, promote renewable energy and reduce the country’s dependence on imported power.
The Accelerating Sustainable and Clean Energy Access Transformation Project is part of Eswatini’s national strategy to build a more inclusive and sustainable energy sector. It aims to bring electricity to more rural households, promote solar and hydropower and upgrade aging infrastructure.

Currently, the country imports around 70 per cent of its electricity, making it vulnerable to supply disruptions and price increases from neighbouring countries. This project is expected to change that by investing in local generation capacity and creating jobs in the green energy space. Each of the two financing deals requires its own legislation. Bill No. 9 of 2025 and Bill No. 10 of 2025 outline how the funds will be borrowed and repaid. Bill No. 9 of 2025 authorises the finance minister to secure up to €37 million (E740 million) from the International Development Association (IDA). This is a concessional loan, which means it comes with very low charges and a long grace period. Eswatini will only start repaying the loan after 10 years, with repayment spread over 30 years in 60 instalments.

The financial terms include:
A 0.75 per cent annual service charge,
Plus a 0.5 per cent annual commitment fee on funds that haven’t been used.
The money will be deposited into the Consolidated Fund or a similar government account for use in the energy project.
Bill No. 10 of 2025 allows the minister to raise a further €48.3 million (E966 million) from the IBRD.
This loan is more commercial in nature, but still affordable compared to private borrowing.
Eswatini will begin repayments after five years, with the balance settled in 25 years through 50 instalments.
Charges include:

• Interest based on the floating base rate plus a variable spread,
• 0.25 per cent front-end fee and
• 0.25 per cent commitment fee per year on the unused loan amount.

According to government, this investment could not come at a better time.
With rising demand for electricity, climate change concerns and a global push toward greener economies, Eswatini must act now to modernise its energy systems.
Government intends to
use the funds for:

• Extending electricity to off-grid rural areas.
• Installing renewable energy systems like solar farms.
• Replacing old and inefficient power lines.
• Introducing modern metering and energy-saving technology.
• Building capacity within the Ministry of Natural Resources and Energy.

While most analysts are supportive, some have raised questions about the country’s growing public debt. Borrowing over E1.7 billion is a major financial commitment that will need careful management.
However, because the IDA portion (E740 million) is concessional, with minimal interest and a long grace period, it is seen as low-risk. The IBRD loan (E966 million) does carry interest, but is still more favourable than commercial lending rates.
At its heart, the project is about more than electricity. It is expected to unlock development across sectors: from education and healthcare to agriculture and tourism.

• Hospitals will be able to operate life-saving equipment consistently,
• Schools will benefit from improved learning environments.
•  Farms will be able to instal irrigation systems.
• Small businesses will grow thanks to affordable, uninterrupted power.

The two Bills will be debated in Parliament, and if approved, the minister for Finance can sign the final loan agreements.  Disbursements are expected to begin before the end of the year, pending procedural approvals. The Ministry of Natural Resources and Energy will be tasked with rolling out the project, working with technical experts, development partners and local communities to ensure success. Transparency and accountability in the use of these funds will be critical.

The public will expect regular updates, independent audits and real progress on the ground. With access to reliable, clean energy set to become one of the pillars of national development, the proposed E1.7 billion financing for Eswatini’s energy transition could mark a turning point for the economy. If the Bills are passed and the project is well executed, Eswatini will not only reduce its energy import Bill, but also light up more homes, boost industry and position itself as a regional example of sustainable development. This is more than just a loan. It is an investment in the country’s future—powered by clean energy, opportunity and long-term vision.

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