MBABANE – The Eswatini Posts and Telecommunications Corporation (EPTC) is seeking a US$26 million (approximately E455 million) loan from the World Bank to finance the Digital Eswatini Project.
The proposed borrowing is contained in the International Bank for Reconstruction and Development (Eswatini Posts and Telecommunications Corporation) Loan Guarantee Bill, 2026, tabled in Parliament.
The Bill seeks to authorise the minister for Finance to issue a government guarantee of up to US$26 million in respect of the loan to EPTC from the International Bank for Reconstruction and Development (IBRD).
Under the proposed arrangement, EPTC would be the borrower, while government would guarantee repayment should the corporation fail to meet its obligations to the lender.
The loan would attract interest at the six-month secured overnight financing rate (SOFR), plus a variable spread, as well as a 0.25 per cent front-end fee and a 0.25 per cent annual commitment charge on the undrawn balance after the grace period.
The Bill further provides that the guaranteed amount would be charged against the Consolidated Fund, meaning government would ultimately be responsible for the guaranteed obligations if EPTC defaults.
The loan proceeds would be used to finance the Digital Eswatini Project under the World Bank’s Inclusive Digitalization in Eastern and Southern Africa Multiphase Programmatic Approach Programme.
The project is aimed at expanding affordable broadband connectivity and strengthening Eswatini’s digital infrastructure and public services.
The project proposes financial stabilisation of EPTC, improvements in its financial management and separation of its different business activities.
It also envisages reforms that could eventually increase private-sector participation and competition in telecommunications.
The World Bank’s own project documents explicitly link the broadband component to EPTC’s financial health, cost structure, accounting separation and possible future restructuring.
The EPTC loan Bill is part of three World Bank-related financing arrangements totalling US$65 million, approximately E1.14 billion, to finance the Digital Eswatini Project.
The three Bills provide for different borrowing arrangements involving the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA) and EPTC.
The second Bill seeks approval for government to borrow a further US$19.7 million, approximately E344.75 million, from the IDA.
The proposed borrowing is contained in the International Development Association (Digital Eswatini Project under the Inclusive Digitalization in Eastern and Southern Africa Multiphase Programmatic Approach Programme) Loan Bill, 2026.
Unlike the US$26 million facility, where EPTC would be the borrower and government would provide a guarantee, the US$19.7 million facility would be borrowed directly by government.
The proceeds would be paid into the Consolidated Fund or another public fund determined by the minister and used specifically to finance the Digital Eswatini Project.
The IDA loan would provide government with a 10-year grace period before repayment begins.
Thereafter, the loan would be repaid in 60 semi-annual instalments, effectively spreading repayment over 30 years.
Government would pay a service charge of 0.75 per cent per annum, plus the applicable basis adjustment, as well as a commitment charge of 0.5 per cent per annum on any portion of the loan that remains undrawn.
The loan would also be charged against the Consolidated Fund.
The third financing arrangement involves US$19.3 million, approximately E337.75 million, from the IBRD for the same Digital Eswatini Project.
This is contained in the International Bank for Reconstruction and Development (Digital Eswatini Project under the Inclusive Digitalization in Eastern and Southern Africa Multiphase Programmatic Approach Programme) Loan Bill, 2026.
The Bill seeks to authorise the minister for Finance to enter into an agreement with the IBRD to raise the loan, with Government of Eswatini being the borrower.
Under the proposed terms, government would repay the US$19.3 million loan in 50 semi-annual instalments following a five-year grace period from the date of the agreement.
The loan would attract interest at the six-month SOFR plus a variable spread determined by the lender.
Government would also pay a front-end fee of 0.25 per cent of the loan amount and a commitment charge of 0.25 per cent per annum on the unwithdrawn balance after the grace period.
Like the IDA facility, the IBRD loan would be charged upon the Consolidated Fund.
Taken together, the three proposed facilities amount to US$65 million, or approximately E1.1375 billion at an exchange rate of E17.50 to the US Dollar.
The financing forms part of the broader Digital Eswatini Project, identified by the World Bank as P508948, which is being implemented under the Inclusive Digitalization in Eastern and Southern Africa (IDEA) Multiphase Programmatic Approach.
The project is aimed at increasing access to affordable, high-quality broadband internet while strengthening government’s capacity to deliver digital public services.
Its interventions include expanding affordable broadband connectivity, strengthening digital public infrastructure and services, and creating an environment in which the digital economy can contribute to economic growth, innovation and job creation.
The project is, therefore, intended to go beyond expanding internet connectivity, with investment also directed towards the infrastructure and systems required for government services to increasingly be delivered electronically.
EPTC is central to one of the three financing arrangements because the proposed US$26 million facility would be contracted by the corporation, with government standing behind the debt through the guarantee.
The World Bank has identified the cost of internet services, gaps in digital infrastructure and the need for reforms in the telecommunications sector as some of the challenges affecting wider broadband adoption in Eswatini.
The proposed financing is intended to address some of these challenges while supporting the country’s broader digital transformation.
The three Bills have now been tabled before Parliament and will undergo the legislative process, including consideration by the relevant portfolio committees before further debate in the House.
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