Eswatini's efforts to boost its energy independence through a thermal power project at Lubhuku have hit a snag. Despite the government granting a licence for the project, coal mining at the site has not commenced. The Eswatini Electricity Company (EEC) has attributed the delay to ongoing technical studies aimed at ascertaining the project's viability. The studies are crucial in determining whether the project can proceed.
The Eswatini Electricity Generation Company (EEGC) and the Eswatini Electricity Feedstock Company (EEFC), two subsidiaries established to drive the country's generation ambitions, currently lack permanent leadership. This has hindered their ability to focus on the core business of driving the thermal power project forward. The EEGC is 100% owned by EEC, while EEFC is 50% owned by EEC and has been granted a mining licence to operate a coal mine at Lubhuku.
The delay in the thermal power project means Eswatini will continue to rely heavily on electricity imports from South Africa and Mozambique. EEC's import bill has been significant, with power purchases costing E2.096 billion in the year ended March 31, 2025, up from E1.774 billion the previous year. This translates to over E3.8 billion over the past two financial years. The country's reliance on imports is a significant burden on its economy.
EEC has stated that it will continue to import electricity into the foreseeable future. Despite progress in securing the extension of the power supply agreement with Eskom, the company has not made progress in ensuring that electricity is wholly generated locally. The contract with Eskom will subsist for another 10 years. EEC is currently recruiting a new managing director following the retirement of Ernest Mkhonta.
The EEGC and EEFC are critical to Eswatini's energy generation plans. According to Khaya Mavuso, the Marketing and Corporate Communications Manager at EEC, EEGC will be involved in power generation once the entities empowered by the Electricity Act, 2007, have concluded their work. EEFC, on the other hand, is licensed to operate a coal mine at Lubhuku and is currently undertaking technical and feasibility studies.
The studies being conducted by EEFC include geological and geotechnical surveys, a seam model, a competent persons' report, a mining plan, and environmental and social impact studies. The company anticipates commencing mining in the third quarter of 2027, subject to the studies demonstrating the viability of mining. However, the delay in appointing CEOs for the subsidiaries has raised concerns about their ability to drive the project forward.
The Eswatini Energy Regulatory Authority (ESERA) is actively involved in evaluating and assessing unsolicited power generation proposals, including clean coal technology projects. According to Sikhumbuzo Tsabedze, the CEO of ESERA, the process is led by the government, and several companies have been shortlisted and are currently engaged in securing project financing and appropriate technology partners.
Key points
- Eswatini's thermal power project at Lubhuku faces delays despite government support.
- The country's reliance on electricity imports from South Africa and Mozambique is a significant burden on its economy.
- EEC's subsidiaries, EEGC and EEFC, lack permanent leadership, hindering their ability to drive the project forward.
