MBABANE – Eswatini has taken another decisive step toward securing energy independence and expanding local generation capacity.
This follows the signing of the 40MW Power Purchase Agreement (PPA) between Ubombo Sugar Limited (USL) and the Eswatini Electricity Company (EEC).
The agreement, witnessed by the Minister for Natural Resources and Energy, Prince Lonkhokhela, cements one of the country’s largest private-sector power generation commitments to date, unlocking billions in investment and creating new opportunities for employment.
The PPA, described by government as a ‘significant milestone’ in Eswatini’s long-term energy strategy, will enable USL to export up to 40MW of electricity to the national grid by June 2028, expanding its existing generation capacity by an additional 24MW.
Once in full operation, the co-generation plant is expected to deliver around 141 GWh of power annually, equivalent to roughly 14 per cent of Eswatini’s national energy needs.
Minister Lonkhokhela confirmed that the overall project value is close to E2.4 billion, covering the expansion of the co-generation plant as well as an upgrade of the USL mill.
Crucially, the construction and operational phases of the project will generate new jobs for emaSwati, both directly and through contracted works.
“This project offers measurable benefits to the country, including job creation and economic activity during both construction and operational phases,” the minister said, adding that the employment impact aligns with government’s broader agenda to drive inclusive development and opportunities for local communities.
EEC Managing Director Ernest Mkhonta said the utility is confident that the expanded capacity from USL will significantly bolster local supply.
He explained that Eswatini’s total annual energy demand stands at 1 366 GWh, with imports making up over 70 per cent of supply from various regional partners, including Eskom (NTCSA), the Southern African Power Pool, Mozambique’s EDM and Botswana Power Corporation.
EEC currently contributes 20 per cent of domestic supply, while USL provides 5 per cent under the existing arrangement. The new PPA will double USL’s contribution to 10 per cent, helping stabilise supply and reducing the energy deficit.
Mkhonta added that the new agreement maintains price escalation strictly in line with local inflation, ensuring affordability for consumers while supporting sustainability.
He also acknowledged the ongoing challenges around baseload capacity and the need for future grid redesigns to accommodate additional Independent Power Producers (IPPs).
“Utility work is always about balancing the energy trilemma – affordability, reliability and sustainability,” he said. “This additional capacity will contribute to the local economy through circulation of the Lilangeni and help substitute imports.”
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