No thermal power breakthrough

MBABANE – Coal mining at Lubhuku has not started.

This is despite government granting a licence for the project. Such a development means Eswatini will continue to import the bulk of its electricity from South Africa and Mozambique.

The Eswatini Electricity Company (EEC) says technical studies are currently underway to ascertain the viability of the project. However, the Times SUNDAY can reveal that a series of studies had already been conducted to ascertain the viability of Lubhuku even before EEC showed an interest in establishing a thermal power station there.

While the studies continue, the two subsidiaries established to drive the country’s generation ambitions do not have a permanent structure in terms of personnel to run the entities. The Eswatini Electricity Generation Company (EEGC) and the Eswatini Electricity Feedstock Company (EEFC) do not have leaders of their own to concentrate on this core business.

The scale of the country’s dependency is reflected in EEC’s import bill. Figures contained in the company’s 2025 annual report show that power purchases, including wheeling charges, cost E2. 096 billion in the year ended March 31, 2025, up from E1.774 billion the previous year.

translates

This translates to more than E3.8 billion over the past two financial years.

It must be said that His Majesty King Mswati III’s command for energy independence has, therefore, not been fully executed, with EEC pointing out that it will continue to import electricity. The company is now recruiting a new managing director following the retirement of Ernest Mkhonta. Regarding the Lubhuku thermal power plant, EEC stated in its 2025 annual report that not much progress had been made on the coal-fired project, as activities had been halted by the non-issuance of the mining right.

The licence has since been issued and EEC says studies are taking place behind the scenes.

The report further reveals that there were challenges in securing funding for the projects in the next financial year.

Impeccable sources said the company would need over E15 billion to run the thermal power plant. Most of the financiers, it has been established, are reluctant to fund coal-powered energy projects. EEC stated that it continued to engage with financiers to secure funding for the generation expansion programme to improve security of supply. However, the public enterprise stated that it would continue to import electricity into the foreseeable future.

Instead of ensuring energy self-reliance, EEC pointed out that it had made progress in ensuring that electricity supply remains available in the country by securing the extension of the power supply agreement with Eskom. It is yet to make progress in ensuring that electricity is wholly generated locally.

The company stated that its contract with Eskom would subsist for another 10 years.

Khaya Mavuso, the Marketing and Corporate Communications Manager at EEC, was asked about the roles of the two subsidiaries, EEGC and EEFC. Mavuso said EEGC and EEFC are subsidiaries owned by EEC, with EEGC 100 per cent owned by the utility. He said EEGC would be involved in power generation once the entities empowered by the Electricity Act, 2007, to procure new generation capacity had concluded their work. On the other hand, he said EEFC was licensed to operate a coal mine at Lubhuku and is 50 per cent owned by EEC, as per the dictates of the Mines and Minerals Act.

entities

Asked whether the entities were subsidiaries, Mavuso responded that EEFC was only granted the mining licence in December 2025. He disclosed that the mining licence prescribes that the company conduct studies and produce reports such as geological and geotechnical surveys, a seam model, a competent persons’ report, a mining plan and environmental and social impact studies. He said EEFC is presently undertaking these exercises and anticipated commencing mining in the third quarter of 2027, although that would happen only if the studies demonstrate the viability of mining.

Asked about the chief executive officers of the subsidiaries, Mavuso responded that the personnel had not yet been appointed. He explained that this was because the subsidiary was presently conducting the technical and feasibility studies through consultants monitored by EEC staff and a technical advisor.

Asked what was delaying the commencement of the thermal power project, given that EEC indicates in its 2025 annual report that electricity imports will continue, Mavuso said the procurement of new generation capacity, as well as the licensing of entities that generate power in the kingdom, was not within the purview of EEC. This, he said, was in terms of Section 24(1) of the Electricity Act. He requested this newspaper to obtain answers from the entities legally mandated in terms of the law.

Responding, the Chief Executive Officer of the Eswatini Energy Regulatory Authority (ESERA), Sikhumbuzo Tsabedze, stated that the authority and EEC were actively involved in the evaluation and assessment of unsolicited power generation proposals, including clean coal technology projects.

Tsabedze said the process was led by government. He added that both institutions were playing critical roles in ensuring that the proposals were thoroughly assessed from technical, economic, regulatory and system-planning perspectives.

project

He stated that the process remains ongoing, with a number of companies having been shortlisted and currently engaged in securing project financing and appropriate technology partners. Given the capital-intensive nature of thermal power generation projects, he said financing is typically dependent on independent power producers (IPPs), adding that it is common for such projects to require considerable time before reaching financial close and ultimately commercial operation.

Tsabedze said it was on this basis that the utility indicated it would continue to rely on electricity imports in the short to medium term to meet national demand.

However, he pointed out that there were encouraging developments within the domestic generation pipeline, with several projects currently under construction and expected to come online during 2027/28.

He said these projects would contribute to a reduction in import dependency.

Tsabedze disclosed that the projects include the Lower Maguduza hydropower project, additional solar generation facilities and the Illovo 40MW power plant, among others. Once operational, he said, the projects would strengthen local generation capacity, improve energy security and reduce the country’s reliance on imported electricity.

Until those projects come on stream, the country will continue to import the majority of its electricity, while the coal at Lubhuku remains in the ground. In its report, EEC expressed gratitude for the collaboration with other national utilities in the region such as EDM and Eskom, which it said had proven reliable over the last 25 years, adding that it looked forward to another productive decade. The company stated that this period would allow it to pursue alternatives to increase local generation projects.

EEC stated that a new material matter during the year was the inability of the company to recover all its costs from the sale of electricity. It alluded to the fact that it was not generating enough gross profit to cover its operating expenditure and therefore, could not break even.

imports

The company also conceded that this was happening because of the high costs of imports compared to the revenue collected, noting that its administration costs are constant and rise below inflation on average.

EEC completed the strategic initiatives it embarked upon during the financial year. However, due to financial constraints, it reviewed some of the initiatives and delayed the implementation of others by a year. Focus has been placed on programmes geared towards expanding generation, with the company strongly considering partnering with potential investors.

EEC created a subsidiary company that enables it to enter into partnership with the private sector without changing the structure of the utility.

The subsidiary is wholly owned by EEC and has a mandate to partner with other developers and form a special purpose vehicle (SPV), which will build a power plant and sell back to EEC.

Other strategic initiatives relate to transmission infrastructure, environment and safety.

The transmission infrastructure provides EEC with the opportunity to continue collaborating with other businesses on the commercialisation of the fibre network within its transmission infrastructure, which is an opportunity to increase revenue and contribute to a financially sustainable environment. In November 2025, government granted a 20-year licence for a thermal coal power station and mine on 4 000 hectares at Lubhuku, in a water-stressed region that abuts the Lubombo Biosphere Reserve, part of the Lubombo Transfrontier Conservation and Resource Area. Environmental and energy experts approached by Oxpeckers warned that this shift to fossil fuel power generation undermines the country’s plans to reduce 2.24 million tonnes of greenhouse gas emissions by 2035.

residents

Lubhuku residents have raised concerns about the effect of the project on their water, land and health. Speaking at a press conference during the launch of the Lubhuku coal power project, Minister for Natural Resources and Energy Prince Lonkhokhela said the coal-fired power station would generate 1 500 megawatts (MW) of electricity, although the country currently needs just 250MW.

The Eswatini Energy Masterplan projects that local maximum demand is expected to reach 334MW by 2035 as the country’s population and economic activity grow.

The minister stated that the excess power would be sold to neighbouring South Africa or the Southern African Power Pool to boost revenue. The pool is a grouping of national electricity companies that have created a common power grid and market for electricity supply in the Southern African Development Community region.

The minister said the Lubhuku licence was special because it had been granted to a local company, EEFC, a wholly owned subsidiary of EEC. He said the company owns 50 per cent of the project, while others hold the remaining 50 per cent.

He added that, unlike companies owned outside the country, the profits from the project would remain in Eswatini.

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