LOBAMBA – Prime Minister Russell Mmiso Dlamini has directed the Eswatini Electricity Company (EEC) Board to undertake a comprehensive assessment of the utility’s financial sustainability and operational efficiency following an operating loss of approximately E406 million.
The assessment is expected to establish the underlying causes of the company’s financial difficulties, identify operational inefficiencies and determine how it can reduce costs without continuously passing the burden on to electricity consumers.
The prime minister disclosed this in response to a question in Parliament on whether he could investigate EEC’s alleged losses, particularly in view of the high cost of electricity faced by consumers and concerns about the company’s operational performance.
In his response, Dlamini confirmed that the losses were not merely allegations, revealing that EEC’s audited financial statements for the financial year ended March 31, 2026, recorded an operating loss of approximately E406 million and a net loss of about E231 million.
He attributed the company’s financial pressures to several factors, including the high cost of imported electricity, tariff under-recoveries, inflationary pressures and other operating expenses.
The prime minister explained that EEC’s financial challenges were historical, arguing that the country had failed to take advantage of an earlier period when electricity imports were cheaper to invest in its own power generation capacity.
He said the country continued to rely heavily on imported electricity, which accounted for approximately 70 per cent of total national consumption, making the cost of electricity imports a significant financial burden.
According to Dlamini, the current cost of importing electricity was unsustainable, requiring government to subsidise the power purchased from external suppliers.
He warned that without adequate government subsidies, the cost of electricity would continue rising, further increasing the cost of living for emaSwati.
However, the prime minister said it was important to distinguish between the financial losses incurred by EEC and the tariffs paid by consumers.
He explained that the company had experienced a mismatch between the increases in the cost of imported electricity and the tariff adjustments granted to it.
During the 2025/26 financial year, EEC received an average tariff increase of eight per cent, while its major electricity supplier increased its tariff by approximately 13.24 per cent.
This resulted in an under-recovery in the cost of electricity supplied, further contributing to the company’s financial difficulties.
Despite these external pressures, Dlamini acknowledged that EEC had to demonstrate that its internal operations were efficient and that consumers were not being made to shoulder avoidable costs.
He said the ministry responsible for energy had already formally directed the EEC Board to conduct a comprehensive assessment of the company’s financial sustainability, operational efficiency and tariff drivers.
The Board had specifically been instructed to identify and quantify inefficiencies, examine opportunities for reducing costs, assess the performance of existing turnaround measures and demonstrate how the company could reduce its dependence on future tariff increases.
The assessment will cover several areas of EEC’s operations, including operating and maintenance costs, system losses, revenue collections and outstanding debts.
It will also examine procurement processes, power import costs, staffing, outsourcing, asset utilisation, capital commitments and the effectiveness of existing turnaround initiatives.
Meanwhile, the prime minister revealed that EEC had already implemented a turnaround and cost-containment programme aimed at improving its financial position.
The programme covers power procurement, overtime expenditure, local electricity generation, system losses, debt recovery and the development of alternative revenue streams.
By the end of September 2026, the company had reportedly recorded approximately E173 million in savings through the turnaround programme.
However, Dlamini acknowledged that despite the reported savings, some areas of internal efficiency still required further improvement.
He assured Parliament that government would continue exercising active oversight over the company through the responsible ministry, the Public Enterprises Unit, the Eswatini Energy Regulatory Authority (ESERA) and the EEC Board.
He said the intention was to ensure that the underlying causes of the company’s losses were addressed and that measurable corrective measures were implemented.
The assessment is therefore expected to place the spotlight not only on the financial burden associated with importing electricity but also on how effectively EEC manages its internal operations, expenditure and revenue collection.
The PM acknowledged that EEC was a strategic national institution whose operational or financial deterioration would have far-reaching consequences for households, industry and the wider economy.
However, he cautioned against describing the company’s current situation as a complete operational failure, arguing that despite the financial pressures, EEC continued to fulfil several critical responsibilities.
He said the company remained responsible for maintaining electricity supply, operating the national transmission and distribution network, procuring electricity from regional suppliers and implementing major generation and network expansion projects.
Nevertheless, the prime minister admitted that there were areas requiring stronger performance, efficiency and accountability, hence government’s decision to initiate an administrative intervention through the Ministry responsible for energy.
He explained that the ministry had formally directed the EEC Board to undertake a comprehensive assessment of the company’s financial sustainability and operational efficiency.
The directive requires the Board to identify the underlying factors driving EEC’s cost structure, quantify inefficiencies, benchmark its performance and strengthen cost-containment measures.
It must also demonstrate how the company can improve its financial sustainability without relying predominantly on further electricity tariff increases.
In addition, the Board is expected to identify specific corrective actions, recurring savings, responsible officials, implementation timelines and measurable performance indicators.
Dlamini further revealed that government was supporting an independent efficiency assessment through the regulatory framework to provide an objective evaluation of EEC’s cost drivers, operational performance and opportunities for improving efficiency.
Meanwhile, the company is implementing a turnaround strategy aimed at reducing controllable costs, improving power procurement decisions, strengthening local electricity generation, reducing system losses, improving revenue collections and developing alternative revenue streams.
The prime minister warned that where inefficiencies, governance weaknesses or control failures were identified, government expected both the Board and management to implement corrective measures and ensure that responsible officials were held accountable.
He said government’s objective was to ensure that EEC operated efficiently and sustainably while protecting national energy security and electricity consumers.
The intervention signals increased government scrutiny of the electricity utility, particularly at a time when the cost of imported electricity and EEC’s financial challenges have raised concerns about the sustainability of electricity supply and the burden on consumers.
…ministries accused of disowning funduzi report
LOBAMBA – Despite having spent millions of Emalangeni on an investigation into drug shortages in the country’s public health facilities, government is now being accused of disowning the Funduzi Report, with two ministries seemingly shifting responsibility for its implementation.
The concerns were raised by Mbabane East Member of Parliament (MP) Welcome Dlamini during the adoption of the Ministry of Finance’s second quarter performance report in the House of Assembly.
Dlamini questioned why Parliament was expected to concern itself with the implementation of the Funduzi Report when Cabinet, which commissioned the investigation, had reportedly declared it unimplementable and had not adopted it.
He reminded the House that the Prime Minister, Russell Mmiso Dlamini, had previously stated in Parliament that Cabinet had not adopted the report because it was not implementable.
“I am asking why it is now being said that Parliament must be busy with the report when Cabinet that commissioned the investigation has not adopted it. Is that not shifting the responsibility to the Legislature?” he asked.
The MP said the response from the Ministry of Finance was that it was unaware of the prime minister having declared the report unimplementable. Instead, the ministry maintained that the recommendations were already being implemented by the Ministry of Health.
However, Dlamini said the Ministry of Health’s performance report indicated that the investigation had been commissioned by the Ministry of Finance, raising questions about which ministry was ultimately responsible for ensuring that its recommendations were implemented.
He described the situation as one in which the two ministries appeared to be pointing fingers at each other instead of taking responsibility.
Dlamini proposed that the committee should record its concern over the apparent shifting of responsibility and recommend that both ministries provide an explanation on the matter.
The exchange prompted Speaker of the House of Assembly Jabulani Mabuza to seek clarification on whether the Funduzi Report had been formally tabled in Parliament.
When Dlamini confirmed that it had, the Speaker asked who had tabled it.
The MP responded that it was the Minister for Finance, Neal Rijkenberg.
Mabuza then observed that by tabling the report in the House, the minister for Finance had effectively assumed ownership of it within Parliament, a clarification he said was necessary.
Meanwhile, Finance Portfolio Committee Chairperson Marwick Khumalo distanced his committee from the report, saying it had never dealt with the Funduzi investigation.
Khumalo said he had not even seen the report and was therefore not in a position to speak about its contents or implementation.
He explained that, as far as he understood, the matter fell under the Ministry of Finance and was being handled by the auditor general in collaboration with the Public Accounts Committee (PAC).
He further indicated that the PAC was better placed to brief the House on the report, as the auditor general worked with that committee on the matter.
“The minister who commissioned the investigation instructed the auditor general. And the auditor general works with the PAC. The Finance Committee has never worked on the Funduzi Report. I request not to be involved,” Khumalo said.
In response, Speaker Mabuza reminded MPs that disagreements or dissatisfaction with responses contained in portfolio committee reports could be addressed through parliamentary motions.
He said members should consider using this parliamentary procedure where they felt that issues had not been adequately addressed through the committee reporting process.
In the Ministry of Finance portfolio committee report, the minister, Neal Rijkenberg said, “Regarding the premise that Cabinet rejected the report or deemed it unworkable or non-implementable, I am not aware that Cabinet made any such decision. To clarify the record, Cabinet’s engagement with the matter was strictly limited to seeking administrative and procedural clarity regarding the procurement of the forensic audit consultant, Funduzi, which was duly to address the status of the report and its utilisation”.
Elaborating, the minister said the report was deliberated by the PAC, adopted by the House, and its recommendations remain fully recognised and official.
Also, he said the Ministry of Health has been submitting to the PAC on the implementation of these recommendations.
