MBABANE – In terms of cash, the South African Government has noted Eswatini Electricity Company’s (EEC) contribution to ESKOM.
Reporting to Parliament on ESKOM’s exports to Eswatini and other neighbouring countries, Minister for Electricity and Energy Kgosientsho Ramokgopa who visited the country last November, said South Africa expected to earn an estimated E18.8 billion from the neighbouring States, including Eswatini.
He was responding to parliamentary questions.
As a net importer of electricity, mainly from South Africa, it has been reported that EEC spent E2 021 504 621 on electricity purchases in 2025 and E1 694 853 374 in 2024. EEC spent E1 408 080 407 in 2023.
Between 2024 and 2025, the public enterprise spent E3 716 357 995.00 on energy purchases, of which 54 per cent was imported from ESKOM.
It must be said that 54 per cent of the costs incurred by EEC in power purchases from South Africa between 2024 and 2025 is around E2 006 833 317.30 (Two billion, six million, eight hundred thirty-three thousand, three hundred seventeen and thirty cents).
According to a report from Eswatini Energy Regulatory Authority (ESERA), EEC has been able to generate at least 30 per cent of electricity within the borders of the country, importing about 70 per cent from outside of the country. To mitigate costs, ESERA reports that EEC concluded cross-border power supply agreements with Mozambique. It is understood that discussions with Zimbabwe’s ZESA are reportedly ongoing.
According to EEC, Eswatini’s strong reliance on energy imports, particularly from ESKOM continued to be a significant material matter within the parastatal. EEC reported that it had started the construction of the Lower Maguduza Hydro Power project. It must be said that this project has been allocated to an independent power producer.
The project is expected to come into commercial operation in early 2027. It is expected to add 13.5MW of run-of river power to the country and contribute towards reduction of import.
The public enterprise signed a 25-year contract for this power station. Local electricity generation is set to increase by at least 20 per cent following the 25-year Power Purchase Agreement between EEC and Middle Lusutfu Hydropower, the independent power producer for the proposed 13.5MW Lower Maguduza Hydro Power Scheme.
EEC, in its report, states that local electricity demand coupled with potential increased demand from South African electricity users might increase this risk and cause strain on regional supply, threatening energy security in Eswatini. As the ESKOM import costs are escalating, it is understood that EEC continues to utilise the Day Ahead Market (DAM) power trading platform for cheaper power purchases as well as the coming on stream of its Lavumisa Solar PV plant. It is said that the increase in DAM purchase coincided with the high season, during which electricity rates especially from ESKOM, are highest.
As a result, EEC continued power trading with Electricidade de Moçambique (EdM) which also contributed positively to the optimisation of power trading. Cost of electricity sales amounted to E2.525 billion; a 16 per cent increase from the E2.178 billion incurred in the previous year.
According to EEC, the high cost of imported electricity was the main contributor to the increased cost of sales. Power purchases and wheeling charges accounted for 70 per cent of cost of sales. The aggregate increase on electricity purchases from all sources during the year was 20 per cent, while power generation, transmission and distribution costs increased by seven per cent. EEC reports that it continued to mitigate the cost of sales expenditure through smart trading in the Southern Africa Power Pool’s (SAPP) DAM. UMkhonto weSizwe MP Moses Mbatha wanted to know how many Southern African countries received energy from South Africa.
He also wanted to know what revenue was generated from those exports. Responding, the Minister, Ramokgopa, said South Africa supplied electricity to eight Southern African countries. He said the countries are Botswana, Democratic Republic of Congo, Eswatini, Lesotho, Mozambique, Namibia, Zambia and Zimbabwe.
In November 2025, South Africa’s minister for Electricity and Energy, assured Eswatini that the region’s power future was secure. He was speaking at a time when South Africa was increasing generation capacity, consolidating a historic turnaround in its electricity sector.
The South African minister was speaking during a high-level bilateral visit to Eswatini. He said South Africa was producing enough power to meet its domestic needs while also supplying regional partners, including Eswatini, through existing and future power-trading arrangements. He was warmly received Minister for Natural Resources and Energy Prince Lonkhokhela at a joint press briefing held at Summerfield Botanical Garden & Exclusive Resort. The engagement formed part of a broader strengthening of cooperation in the energy sector between the neighbouring States.
In his remarks, Dr Ramokgopa said South Africa’s neighbours should be confident that ‘the era of load-shedding is now a thing of the past’, thanks to a combination of internal reforms, leadership changes, infrastructure stabilisation and extensive private-sector involvement that has revived South Africa’s power sector after years of instability. He was quoted to have said: “We are confident that the supply is now enough for our domestic requirements and for exports to our partners, including Eswatini. We do not wish to ever see load-shedding again – not for South Africa and certainly not for our neighbours who rely on us.”The minister highlighted that the transition to stable supply has been supported by ESKOM’s return to profitability in 2025, its first profit in many years.
This was caused by decisive restructuring and significant operational improvements, according to the South African minister. The turnaround, he said, was the combined effect of staff commitment, strong government support, improved procurement systems and contributions from private producers.
Dr Ramokgopa added that South Africa was not resting on its gains, adding that they recently unveiled an ambitious national plan to build 105 000MW of new generation capacity between now and 2039, representing an investment valued at E2.23 trillion. This planned addition is more than double South Africa’s current installed generation capacity of 50 230MW.
On the other hand, Prince Lonkhokhela announced that Eswatini was embarking on an aggressive generation expansion programme.
He said the programme was inspired by the need to secure long-term energy independence, support industrialisation and ensure affordable electricity for households and businesses.
Under the direction of His Majesty King Mswati III, he said the kingdom was preparing to roll out a 1 500MW generation expansion plan over the next few years. Prince Lonkhokhela mentioned that18 prospective independent power producers (IPPs) had already expressed interest in developing generation capacity within the kingdom. He also appealed for deeper cooperation in skills development, particularly in engineering, project management and operational excellence, which are skills demonstrated in large South African power projects such as Medupi and Kusile.
“Our engineers, project managers and business analysts have much to learn from your teams,” the minister said when he addressed his South African counterpart.
He added: “As we embark on the 1 500 MW expansion, capacity building will be crucial.” It must be said that a key aspect of the ongoing cooperation between the two nations was the finalisation of a new 10-year Power Purchase Agreement (PPA). That was an agreement between EEC and South Africa’s National Transmission Company of South Africa (NTCSA). Prince Lonkhokhela said the new PPA, which would anchor Eswatini’s supply security for the next decade, was being finalised under Dr Ramokgopa’s ‘wise guidance’. He also noted that Cabinet has tasked the EEC Board and management with ensuring that the agreement includes additional efficiencies that would help cushion consumers.
It is also understood that the context of the power supply industry in the country has changed significantly among the commercial and industrial customers.
It is said that Solar PV is the dominant technology that is used, which brings challenges in grid management due to the intermittency of solar resources. EEC has reportedly seen opportunities to collaborate with the commercial and industrial customers to maintain great stability through adhering to regulations. However, it is said that these come with reforms driven by the regulator (ESERA) to ensure that there is fairness to access the grid. New players are also supposed to comply with the national grid code so that commercial and industrial customers can connect to the grid.
Cost of energy imports exceeds EEC’s customer tariffs
MBABANE – EEC has faced an exceptionally challenging year, particularly in managing and containing import costs.
This is contained in the 2025 annual report for the Eswatini Electricity Company (EEC). According to the report, EEC closed the financial year ended March 31, 2025, with a net loss of E80 million and a significantly larger operating loss of E247 million. The report highlights that the Southern African region experienced a severe drought, which greatly disrupted power supply within the Southern African Power Pool (SAPP) market. As a result, EEC was forced to rely heavily on electricity imports from the National Transmission Company of South Africa (NTCSA), a subsidiary of ESKOM Ltd. It is mentioned that this dependency was especially acute during the high-demand winter season from June to August 2024.
According to the report, the cost of electricity purchased from NTCSA far exceeded EEC’s retail tariffs, particularly for residential customers. The report states that this disparity led to substantial financial losses during peak demand times, which the company was unable to recover over the remainder of the year. Compounding the situation, the report notes that local electricity generation was severely constrained due to the drought. The drying up of dams caused delays in commencing local generation operations, further increasing reliance on high-cost imports.
It is stated that cost of sales for the year were E2 909 million, up from E2 525 million in 2024. According to the report, the increased cost of sales was attributable to an increase in import tariffs, with the major supplier, NTCSA, increasing tariffs by 13.24 per cent during the year. Coupled with this price increase, the report mentions there was a significant increase in the units purchased from NTCSA due to supply challenges in the SAPP market.
The report highlights that the Day Ahead Market (DAM) power trading platform also experienced significant challenges due to the drought conditions.
This led to a reduction in energy purchases from 139.6 GWh to 49 GWh, resulting in the forfeiture of access to typically more affordable power rates secured in the previous year. Furthermore, it is mentioned that in response to rising energy costs imposed by Electricidade de Moçambique (EDM), the company strategically scaled down electricity purchases, reducing demand from 20MW to 5MW. The report states that this measure aligns with ongoing efforts to optimise operational efficiency and manage costs.
According to the report, EEC’s profit has been trending downward over the past six years, mainly due to the cumulative effect of adverse tariff decisions while absorbing very high increases from electricity import tariffs. While the EEC was granted an average tariff increase of 9.08 per cent for the 2023/24 and 2024/25 financial years, the report notes this was offset by the NTCSA increase of 13.24 per cent. Despite the financial losses, the report states that the company closed the financial year with a positive cash balance of E28 million. However, it is highlighted that this reflected a huge decrease of E103 million from the prior year’s closing cash position of E131 million. Looking to the future, the report mentions that EEC continues to engage with financiers to secure funding for the generation expansion programme to improve security of supply. It is stated that the company will continue to import electricity into the foreseeable future. The report also highlights that the EEC has made progress in ensuring that electricity supply remains available in the country and has secured the extension of the power supply agreement with ESKOM and the contract is going to subsist for another 10 years. According to the report, EEC is grateful to have collaborated with other national utilities in the region such as EDM and ESKOM.
