- This initiative has declared Eswatini open for business
Mbabane-A multi-billion Emalangeni development drive is being undertaken by the government of Eswatini in an attempt to create jobs and alleviate poverty and to pull the country from a lower middle class earning economy to at least an upper middle-class economy.
This initiative has declared Eswatini open for business, however funding solutions for these ambitious projects could be the Achilles heel to their fulfilment.
This economic development drive is expected to be achieved by initiating six key projects throughout the country. These projects are as follows. Firstly, the Eswatini Rail Link and Mpaka Inland Container Depot Project. The 300 MW Renewable Energy Project. The Five Star hotel and International Convention Centre project. The Big Five National Park Project. The Industrial Parks Development Project and lastly the Mpakeni Urban Infrastructure Development Project.
Different funding methods have been put forward for the various projects. For instance, in the case of the Eswatini Railway Development, the funding will be raised on the strength of Take or Pay Offtake Agreements to be signed between the SPV and each Railway entity.
In the case of the Five Star Hotel and International Convention Centre, the funding model will be based on the operator chosen. However, it has been gathered that a loan of US$ 80 million was obtained from Taiwan but will only take the construction to 70 per cent completion an additional E 700 million or US$ 39.4 million is required to complete the venue.
Other funding models will include joint venture agreements and development bank arrangements.
Eswatini Rail Development
The Eswatini Rail Link and the Mpaka Inland Container Depot Project costing up to US$ 1.8 billion continues to be an ambition of the Eswatini government in its drive to create investment opportunities.
The projects are already underway and the feasibility study has been completed. The resettlement and compensation of 235 homesteads has already been undertaken. In terms of the Mpaka Inland Container Depot, the construction of a 22,000m² hardstanding for container staging and office buildings, a weighbridge and warehousing hardstanding was completed in May 2022. The access road is yet to be paved and funding is being solicited for the completion of the rest of the infrastructure.
According to a presentation made by the Eswatini Investment Promotion Authority (EIPA) the Eswatini Rail link is envisioned to be a seamless regional network running across three countries, South Africa, Eswatini and Mozambique This project is a joint inter-railway strategic initiative between the railway companies of the two countries, Transnet and Eswatini Railways The project entails the construction of a 150km long new railway line from Lothair (South Africa) to Sidvokodvo in Eswatini that will provide a strategic rail link with the ports of Richards Bay and Maputo.
This development is expected to provide approximately 5000 work opportunities during construction for 36 months and 263 new permanent jobs during operations. It will alleviate traffic congestion at the border and create capacity of up to 45 metric tonnes per annum for general freight export.
Business opportunities will be unleashed for the construction industry and for small medium enterprises in the way of outsources and services. In terms of economic spin offs there will an improved logistics chain that will provide a direct rail access to Gauteng the South African economic hub.
Intra African trade and integration of the regions freight logistics will be enhanced, thus increasing imports and exports.
The Mpaka Inland Container Depot will provide a shipping hub in proximity to the sugar belt of Eswatini. It will also appeal to the businesses in the lowveld, the Maputo and the North-South Corridor developments. It will also be at proximity to the King Mswati III International Airport.
Mpaka Railway Station is already listed as a bonded station by the Eswatini Revenue Services. Quick turnaround times, ease of doing business, economical and safe movement of goods through the terminal are among the hallmarks of the railway station.
The government of Eswatini is providing the land for the construction of the infrastructure. It also bears expenses for land acquisition and pre-construction activities.
Renewable Energy Projects
A total of 260 Mega Watts (MW) of renewable energy projects are to be established in the country. This will be the first step towards meeting an envisaged requirement of 500 MW that is required beyond 2025.
The initial renewable energy plants to be constructed will be the 70 MW hybrid plant that will generate 60 MW of hydro electricity and 10 MW of solar power. There are also 75MW of new solar projects that have been awarded or tendered to three Independent Power Providers (IPP). There are 40 MW of Biomass projects at tendering stage. A 23 MW hydro project has been awarded at Maguduza and another 30MW hydro project has just been tendered at Maguga Dam.
The estimated cost for all the renewable energy projects considered will be US$ 684 million. These energy projects will increase access to energy in Eswatini and stabilise electrification costs. They will reduce carbon emissions and dependency on energy imports. They will increase energy security and diversify economic activity and increase employment opportunities.
Five Star Hotel and International Convention Centre
The Five Star Hotel will have 250 beds. Sixty villas will be constructed as part of the hotel near the International Convention Centre. There will be a theatre for 1800 guests on two levels. There will also be meeting, conference and multi-purpose rooms over two levels. The hotel will have VIP reception rooms, an exhibition room with refreshment and coffee shop. A chamber hall with the capacity to house the African Union and other conferences. It will show case a multi-purpose hall for 1 500 people in ballroom seating and 3000 people in classroom seating. There will be a restaurant for 340 diners and catering facilities for banquet receptions.
The project will cost an estimated US$ 228 million. It is envisioned to increase economic growth through its contribution to tourism. It will create jobs, alleviate poverty and boost tourism.
The Big Game National Park
This development is in line with the Lubombo Spatial Development area that was initiated in 1995 in order to unlock economic potential. It was a trilateral undertaking between the governments of South Africa, Mozambique and Eswatini.
The game park will be situated in the north eastern part of the Lubombo region and will merge 81, 404 .169 ha of pristine land for conversation and tourism purposes. The area is known for high numbers of birds within the region, 350 species have been recorded. There will be a need for the development of the required infrastructure and lodging facilities.
The project will cost US$ 100 million and it will re-introduce extinct and highly threatened species in the country. It will increase the bio-diversity and eco systems functions and services with the aim of attaining 6 per cent of land under protection. It will stimulate the utilization of the King Mswati III airport and boost community livelihoods.
Industrial Parks Development
An Industrial Parks development initiative with an overall cost of US$ 200 million is also on the cards. This project is central to the poverty alleviation and job creation agenda. It places a strong emphasis on agro-processing and other forms of manufacturing. It is part of a decentralised industrial strategy in which the industrial parks will be dispersed throughout the four regions of the country. These will be in the main sugar and textile parks.
The parks are expected to improve the country’s Gross Domestic Product (GDP) due to additional industrial activity and exports. They will assist to provide a sustained agri industry, create employment opportunities and contribute to poverty alleviation. Land has been identified in Sidvokodvo, Hlane, Mankayane and Hlathikhulu, Mpholonjeni, Piggs Peak for the project and an Industrialization policy has been completed.
Mpakeni Urban Infrastructure Development
This infrastructure development project is aimed at addressing the underdevelopment in the southern part of the country. The plan is for growth and the provision of basic services, infrastructure, and affordable housing and recreational areas for expanding population needs.
This project is centered around the construction of three large dams. The Ethemba dam, the Mahamba dam and the Mpakeni dam. The overall project is expected to cost approximately US$ 200 million.
It will generate income for communities through farming, provide food security and reduce the burden on social protection. It will provide jobs and create an eco-friendly lifestyle.