Mbabane – The Eswatini Electricity Company (EEC) says the new Power Purchase Agreement (PPA) signed with Ubombo Sugar Limited (USL) marks another important milestone in a partnership that began 15 years ago and continues to play a key role in strengthening the country’s energy security.
Speaking during the signing ceremony, EEC Managing Director Enerst Mkhonta said the relationship between the two entities had grown significantly since USL first became both a supplier and consumer of grid electricity under a PPA with the then Swaziland Electricity Company (SEC).
He extended gratitude to the Minister of Natural Resources and Energy, Prince Lonkhokhela, for the policy guidance provided by the ministry on energy matters. He also expressed appreciation for the extension of the existing 15 year PPA with USL, which bridges the period from December 31, 2025 to the commercial operation date of the new plant. The extension was granted under the same terms and conditions that have governed the partnership without major issues for over a decade.
Mkhonta further thanked ESERA and the multi institutional Procurement Committee, comprising representatives from ESERA, EEC, the Ministry of Finance, MNRE and Transaction Advisors, for their work in negotiating the additional capacity secured under Tranche Three. He said the expanded capacity would support the local economy by keeping more Lilangeni circulating domestically, creating employment opportunities and reducing the country’s dependence on imported electricity.
He described EEC’s mandate as a constant balancing act of the “energy trilemma”, affordability, reliability and sustainability, and welcomed the fact that the new agreement’s price escalation mechanism is linked only to local inflation. He noted, however, that base load supply remains a challenge.
The country’s total energy demand currently stands at 1,366 GWh, with imports accounting for the bulk of supply, 65 percent from NTCSA, 4 percent from SAPP, 4 percent from EDM and 3 percent from BPC. EEC contributes 20 percent and USL provides 5 percent.
The new PPA will inject an additional 5 percent into the system, effectively doubling USL’s contribution to 10 percent of national energy demand once the new plant is operational.
Mkhonta affirmed EEC’s commitment to providing fair and open access to the grid for all qualifying Independent Power Producers (IPPs), noting that expanding grid capacity would be essential to accommodate future projects.
Discussion about this post