Africa-Press – Eswatini. Eswatini’s pursuit of greater energy independence advanced significantly on Monday as Ubombo Sugar Limited (USL) and the Eswatini Electricity Company (EEC) signed a major Power Purchase Agreement (PPA) worth E1.5 billion.
The agreement paves the way for a major expansion of USL’s cogeneration project, increasing its maximum export capacity to 40 MW by June 2028.
The project is one of the largest private-sector energy investments in the country and is expected to play a central role in reducing Eswatini’s reliance on imported electricity.
The signing took place at the Hilton Garden Inn in Mbabane, attended by senior government officials, industry executives, and energy regulators.
According to technical details presented during the ceremony, the Standard Core Generation Asset will export up to 40 MW into the national grid once the expansion is complete.
This will add 24 MW to the existing generation output, building on the current 16 MW PPA relationship between USL and EEC.
Once the expanded plant reaches stable operation, it is projected to deliver approximately 141 GWh of energy per year, equivalent to around 40 per cent of Eswatini’s energy needs.
“This project builds on the experience of the existing 16 MW power purchase agreement relationship between EEC and Ubombo Sugar Limited.
Notwithstanding any technical contracts and limitations of a sugar-processing cogeneration plant, both parties will draw from their expertise and experience to ensure the success of the 40 MW maximum export power purchase agreement,” said HRH Prince Lonkhokhela, the Minister for Natural Resources and Energy.
Prince Lonkhokhela described the agreement as a significant step toward reducing Eswatini’s dependence on imported power.
The minister said, the PPA between Ubombo Sugar and EEC is a step in the right direction for Eswatini to achieve energy sovereignty.
He emphasised that the government fully supports projects that expand local generation using renewable and agricultural by-product resources, noting their long-term economic value.
Meanwhile, Eswatini Energy Regulatory Authority (ESERA) CEO Sikhumbuzo Tsabedze highlighted the national impact of the agreement, confirming the increase in USL’s contribution to the electricity mix.
“This Power Purchase Agreement is very important, as it will increase power generated by Ubombo Sugar Limited from 5% to 10%,” Tsabedze stated.
He noted that cogeneration aligns with ESERA’s broader strategy of diversifying Eswatini’s energy sources, especially through independent power producers (IPPs).
EEC Managing Director Ernest Mkhonta expressed strong support for the project, linking its economic impact to reduced electricity imports. Mkhonta said, increasing local generation capacity directly translates to a reduction in electricity imports.
He further explained that keeping more energy expenditure within the country would benefit the national economy.
“The subsequent decrease in external payments will ensure that the local currency, the Lilangeni, circulates within the country,” said Mkhonta.
He concluded that the project would enhance employment opportunities, stating that the localised economic activity would substantially contribute to the country’s fiscal health and promote increased employment opportunities.
In the same tone, USL Managing Director Muzi Siyaya praised the efficiency with which the agreement was concluded, citing his long experience in energy-sector negotiations.
The Minister for Natural Resources and Energy HRH Prince Lonkhonkhela said this new deal will increase local power generation and create jobs.
“Leveraging 15 years of experience in energy transactions, I commend the expeditious pace at which this cogeneration power plant agreement was successfully concluded,” he said.
He added that the project demonstrates the capacity of institutions in Eswatini to finalise complex transactions, especially those involving renewable resources and agricultural synergy.
The ceremony began with remarks by ESERA CEO Skhumbuzo Tsabedze, who reiterated the strategic importance of integrating agriculture, manufacturing, and electricity generation.
“The procurement of power from cogeneration plants strategically explores the synergy among agriculture, manufacturing, and electricity generation, all of which are critical for the economic growth and development of the Kingdom of Eswatini,” said Tsabedze..
Worth noting the agreement positions Ubombo Sugar as one of the largest contributors to Eswatini’s renewable energy production and solidifies its role as a key Independent Power Producer.
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