RELIEF AFTER ELECTRICITY HIKE SLASHED

EZULWINI – The drastic cut to proposed electricity tariff hikes for two consecutive years by government has sparked significant debate. Yesterday, Minister for Natural Resources and Energy Prince Lonkhokhela announced at a press conference at Royal Villas that the electricity tariff hike originally proposed by the Eswatini Energy Regulatory Authority (ESERA)-14.67 per cent for 2025/26 has been reduced to eight per cent.

For the following year, the previously set increase of 10.91 per cent for 2026/27 has also been decreased to seven per cent. While a majority of emaSwati have welcomed government’s intervention as a much-needed reprieve amid economic hardship, some have expressed reservations, citing concerns about the long-term implications and sustainability of the reduced tariffs. The press conference was attended by representatives from ESERA, the Eswatini Electricity Company (EEC), senior government officials and members of the media.

Necessary

The minister stated that, as the sole shareholder of EEC, government felt it was necessary to mitigate the shock of the electricity price hikes approved by ESERA. The reduction in the percentage increases means that from April 1, 2025  and April 1, 2026, emaSwati will no longer face additional price hikes of 14.67 per cent and 10.91 per cent, respectively. “His Majesty’s government, in its capacity as the sole shareholder of the electricity company, intensely considered the impact of the approved tariffs and resolved to explore measures to mitigate the electricity price shock, ensuring that both businesses and individual emaSwati are subject to an average increase of eight per cent for the year 2025/26 and seven per cent for 2026/27,” he said.

The minister added that the review does not imply a lack of confidence in ESERA, but rather reflects government’s concerns about the approved tariff increases, especially given the prevailing economic conditions. He noted that electricity price increases can impose a financial burden on both citizens and businesses in the kingdom.  “It is government’s view that this increase still presents a challenge concerning price shock at this stage. As His Majesty directed during the official opening of Parliament, the economy must be urgently revived and reasonably supported.

“Energy and electricity are key drivers of any economic recovery agenda. Electricity is akin to the air we breathe; excessively expensive delivered service is as good as none,” he stated.
The downward review announced by the minister follows a statement from ESERA Chief Executive Officer (CEO) Sikhumbuzo Tsabedze, who had previously announced tariff hikes averaging 14.67 per cent for the year 2025/26 and 10.91 per cent for the following year. Tsabedze made this announcement on Monday. The tariff increase proposed by Tsabedze would have meant that domestic customers paying E100 starting from April would receive 38 units, while in April 2026, would have dropped to 33 units.

Commercial customers, excluding facility charges, would receive 32 units this coming April, dropping to 28 units the next year. Last week, the National Energy Regulator of South Africa (NERSA) approved a tariff increase for Eskom of 12.74 per cent in the Financial Year (FY) 2025/26 and 5.36 per cent in FY 2026/27, in addition to any percentage stipulated in the Power Purchase Agreement (PPA) between EEC and Eskom. Despite public outcry, the South African Government has not reconsidered this decision, unlike a recent incident in Sweden, where a decision to review a granted electricity price hike occurred last February.

Following Monday’s announcement, the minister expressed shock at the tariff increases. He made a public promise through this publication that he would present the plight of emaSwati before Cabinet on Tuesday and plead for a reduction in the proposed hikes. In the same vein, stakeholders such as the Trade Union Congress of Swaziland (TUCOSWA), the Consumers Forum, the Eswatini Consumers Association and the Chairperson of the Natural Resources and Energy Portfolio Committee in the House of Assembly indicated that they were hoping for single-digit increases.  Additionally, these stakeholders urged EEC’s sole shareholder, government, to intervene on behalf of emaSwati and further reduce the tariff hikes.

Despite the decision to review the regulator’s recommendations, the minister commended ESERA for its diligence and detailed analysis in determining the tariff adjustments according to legal provisions and the Tariff Methodology. “Ultimately, the regulator announced the decision to allow EEC average tariff increases of 14.67 per cent for the financial year 2025/26 and 10.91 per cent for the financial year 2026/27, against EEC’s requests of 25.51 per cent and 27.06 per cent, respectively,” he said.

Breakdown

Following the announcement, the minister stated that EEC and ESERA would provide a breakdown in due course of how the new average increase will affect unit prices, given that EEC serves different categories of customers, from which the average tariff hike was derived. Relevant factors to consider include taxes, facility charges and the various customer types. Notably, the tariffs announced by ESERA indicated that the domestic tariff would have increased by 14.12 per cent, while energy charges for corporate time-of-use and non-time-of-use customers would have risen by 14 per cent in each of the two financial years. Demand charges were set at a 14 per cent increase, while time-of-use and non-time-of-use facility charges and access charges were capped by the approved inflation rates of 5.02 per cent for FY 2025/26 and 4.86 per cent for FY 2026/27. “The lifeline tariff increase has been limited to 7.35 per cent in consideration of the vulnerability of this tariff category to adverse socio-economic conditions,” he concluded.

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