Govt Opens the Door for Private-Sector-Led Energy Generation

---

By Inside Biz

The Minister of Natural Resources and Energy Jabulani Mabuza says the government has put in place strategies to ensure local participation and benefit, particularly for indigenous businesses and entrepreneurs.

The value chain includes projects ranging from the provision of debt, equity, engineering, procurement and construction, operations, and maintenance, among other requirements for local participation.

Mabuza disclosed this during the Energy Indaba hosted by Standard Bank at the Royal Villas in Ezulwini, under the theme: ‘Powering Eswatini Beyond 2025.’ 

Minister Mabuza said as the EEC’s Power Purchase Agreement with ESKOM is set for review towards the end of 2025, action was being taken, in collaboration with EEC and ESERA, to ensure the country remains powered.

Among the forward-looking interventions is to leverage private sector participation to alleviate the pressure on the Government whilst enabling local companies, in engineering, construction, operation and maintenance, and financial services, to play a role in the country’s energy sector.

The government also encourages independent power producers to generate electricity for their own use and to supply the national grid, albeit within a transparent, fair competitive bidding process, characterized by a level playing field.

This, Mabuza said, gives an opportunity for the country to have favourable tariffs that may be affordable to the Eswatini economy.

He said in the short to medium term, the Government was engaged in the following activities:

·     Procuring 75MW of Solar PV,

·     Purchasing 45 MW Biomass from the Private Sector (IPPs),

·     There is also a 13.6 MW hydropower for Lower Maguduza to be developed by an IPP,

·     EEC is in developing the 33 MW Maguga Expansion and Lower Maguga Hydropower Plants to augment internal electricity generation,

·     More opportunities for Solar PV and biomass power plants

·     ESERA has completed the Small Scale Embedded Generation framework to enable IPPs to export excess electricity to the national grid. (Currently, this framework is being fine-tuned in preparation for a national rollout).

It transpired that already the IPPs have installed a combined total of over 18 MW of solar PV plants of various sizes that generate electricity for their own use.

He said as the country develops its own generation capacity, a balance must be struck between productivity and the cost and tariff of electricity so that no sector is disadvantaged.

“The issue of electricity costs does not only affect the less privileged but businesses as well due to the fact that energy is a major driver of the economy. There is therefore a risk that other commodities and services might become too costly for consumers if the electricity costs are unchecked,” he said.

In another matter, Minister Mabuza said the country was on track to fulfill its commitments towards net zero and targets towards renewable energy technologies and other transition fuels.

---