EEC, ESKOM TO RENEW PPA

MBABANE – Eswatini Electricity Company (EEC) has dispelled uncertainty over the renewal of its Power Purchasing Agreement (PPA) with Eskom.

EEC’s General Manager Operations Vusi Gama, yesterday confirmed that the company’s engagements with Eskom had borne positive results. Gama outlined that Eskom had all but agreed in principle to renew the PPA, and engagements were currently underway to determine the length of the new agreement. “They will definitely renew the contract. I am 90 per cent certain that the PPA between the companies will be renewed post 2025. Eskom has displayed a great willingness to renew the contract,” he said. Gama said by their analyses, the trajectory of Eskom’s energy production capacity was increasing, as opposed to a decline. He said after recent talks they held with the giant South African company, they were left doubtless that the PPA would be renewed.

concerned

“We are looking at another 25 years, which should take us to 2050. I can assure emaSwati that there is nothing to worry about as far as the renewal of the contract is concerned. In my view, Eskom would have no reason not to renew it,” he said. Gama further outlined that even though there were regular cases of load-shedding in South Africa, it did not mean that Eskom’s installation capacity was not enough to meet demand. He said problems experienced by Eskom had to do with maintenance, not a lack of capacity to produce power. Another important development from EEC’s engagements with Eskom, according to Gama, was that they had managed to negotiate a lesser tariff increase than the 41 per cent that Eskom wanted to effect. He said this would have had a detrimental effect to the importation price of electricity, which by extension would have affected emaSwati.

“They wanted to increase the tariff by 41 per cent, but we managed to convince them to make it 9.6 per cent. On this, National Energy South Africa (NESA) usually adds 0.5 per cent, which would then take us to 10.1 per cent. We are very happy with this because at 41 per cent, it would have left us with an import cost that would have caused pain to everyone,” Gama said. Though not signed yet, news of certainty over the renewal of the agreement will be met with a huge relief, especially by the business community, as uncertainty over energy security undeniably affects future plans. Foreign Direct Investment (FDI) attraction campaigns also rely on guarantees over reliable power supply.

diversification

EEC Managing Director Ernest Mkhonta said the company would continue with its plans of diversification, even in line with the proposed renewal of the PPA with Eskom.  He said the company had various projects lined up to increase its power generation capacity to move towards 240MW, which would leave the country with enough to supply its needs. “We are working on a number of projects, but ultimately we will need to have our own power plant. We are not only looking for short-term solutions, but are aware that energy demand would increase in future, hence the need to be prepared by setting up more generative capacity,” he said. Gama said EEC understood the sensitivity of the Eskom matter, which was why it was important to update the nation on recent developments on the negotiations with Eskom.

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