State-run Eswatini Electricity Company (EEC) has executed a Power Purchase Agreement (PPA) with Ubombo Sugar Limited (USL) to procure 40 MW of biomass power, a move set to supply 14% of the nation’s current electricity demand.
Key Takeaways
- Significant Capacity: The new biomass co-generation plant will generate approximately 141 GWh annually.
- Major Investment: The project is valued at SZL 1.5 billion (USD 88.2 million), with SZL 900 million secured via local financing.
- Import Reduction: The deal aims to cut electricity imports and reduce exposure to external price volatility.
- Grid Contribution: The project adds 5% more energy to the grid, raising USL’s total contribution to 10% of Eswatini’s energy demand.
This agreement was finalized under the biomass power procurement programme facilitated by the Eswatini Energy Regulatory Authority (ESERA). Eswatini, like many nations in the region, is striving to reduce dependency on imported power by leveraging domestic agricultural residues. The project will utilize sugarcane by-products from Ubombo Sugar Limited, reinforcing the role of the sugar industry in national energy strategies.
USL Managing Director Muzi Siyaya highlighted the efficiency of the deal’s execution:
“The project is one of the fastest to progress from tendering to financial close in the country.”
EEC Managing Director Ernest Sipho Mkhonta emphasized the grid impact:
“The new PPA with USL will inject an additional 5% energy into the system, bringing USL’s contribution to 10% of Eswatini’s energy demand.”
Bioenergy Business Analysis: For investors and policymakers, this PPA validates the “sugar-to-power” model as a scalable solution for African energy security. The successful securing of SZL 900 million from local banks indicates growing financial sector confidence in biomass cogeneration projects. By integrating industrial agriculture with national power generation, Eswatini is effectively insulating itself from cross-border tariff hikes while creating a closed-loop economic ecosystem that supports local employment and enterprise development.
