Eswatini Electricity Company (EEC) recorded an unprecedented net loss of E80 million for the financial year ended March 31, 2025.
The company also recorded an operating loss of E247 million, which is a significant increase from the operating loss of E70 million recorded last year and profit made was E101 million.
According to EEC’s integrated annual report, the company’s performance was severely impacted by a regional drought that disrupted local electricity generation and limited the availability of affordable imports from the Southern African Power Pool (SAPP).
As a result, day-ahead market (DAM) purchases fell sharply from 139.6 GWh to 49 GWh in the current year, thus severely constraining EEC’s supply options.
This shortfall forced the company to rely more heavily on high-cost electricity imports from the National Transmission Company South Africa (NTCSA), especially during the peak winter demand period.
Although EEC implemented a 9.08% tariff increase during the year, this was not enough to offset NTCSA’s 13.24% price hike thus worsening the financial strain on the company’s operating performance.
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As a result, the company’s cash reserves reduced significantly from E131 million to E28 million by year-end reflecting growing pressure on liquidity and financial sustainability.
“Total revenue for the year reached E3.1 billion reflecting an 11% increase from the E2.8 billion reported the previous year. Revenue from electricity sales rose to E3 billion from E2.6 billion in 2024, representing an 11.7% increase.
“This growth was primarily driven by a 9.08% tariff increase approved by Eswatini Energy Regulatory Authority (ESERA) for the 2023/24 and 2024/25 financial years under a multi-year award along with a 1% increase in sales volumes,” reads the report.
Despite this improvement, EEC continues to face challenges in achieving sustainable sales growth due to lack of meaningful load growth in the profitable customer segment of the market.
Over the past six years, a series of adverse tariff decisions foisted on the company have significantly limited revenue expansion, whilst cost of sales continued to rise significantly faster than revenue placing pressure on the company’s financial sustainability.
According to the report, cost of sales amounted to E2.9 billion; a 16% increase from the E2.5 billion incurred in the previous year.
The high cost of imported electricity especially from NTCSA during the winter season was the main contributor to the increased cost of sales, while power purchases and wheeling charges accounted for 72% of cost of sales. The aggregate increase on electricity purchases from all sources during the year was 18% whilst power generation, transmission, and distribution costs increased by 8%.
The entity continued to mitigate the cost of sales expenditure through internal generation and trading vigorously on the SAPP’s day-ahead market (DAM).
Subdued
However, the power trading in DAM during the year was subdued due to severe supply constraints in the market, which emanated from the lingering drought conditions in the country and the Southern African Development Community (SADC) region. Total operating expenses increased by 22% to E443 million in 2025, from E364 million in the previous year.
This rise was primarily attributed to costs associated with a geothermal study undertaken during the year. Additionally, the reversal of provisions created in prior years has affected the current year’s figures, as the actual costs related to these expenses were recognised in the current period.
EEC continues to intensify its drive to implement cost containment initiatives within its operations while trying not to compromise both the quality of supply and service to customers.
“The company posted an operating loss of E247 million, a significant increase from the E70 million loss recorded in the previous year. This has been an exceptionally challenging year for EEC particularly in managing and containing import costs.
“The Southern African region was experiencing a severe drought, which greatly disrupted power supply within the SAPP market.
“As a result, EEC was forced to rely heavily on electricity imports from the NTCSA, a subsidiary of Eskom Ltd. This dependency was especially pronounced during the high demand winter season from June to August 2024.
“Net financing cost during the year was E14 million versus E5 million in the previous year, due to a decrease in short-term investments coupled with a significant increase in borrowings during the year, including the utilisation of an overdraft facility amounting to E135 million.
“The company’s share of profits from Motraco decreased to E101 million (2024: E113 million) driven mainly by unfavourable exchange rate (USD/SZL) movements during the year,” partly reads the report.
