Government has stepped in to cushion electricity consumers from the impact of the recently approved tariff increase by approving special funding amounting to E200 million.
The intervention follows the announcement of a 13.61% tariff increase by the Eswatini Energy Regulatory Authority, which is set to come into effect on April 1.
The increase was approved after the Eswatini Electricity Company (EEC) had initially applied for a higher 20.67% tariff adjustment.
Government’s intervention was announced yesterday by Russell Mmiso Dlamini, who said the decision followed concerns raised by the public over the tariff hike.
He said Cabinet deliberated on the matter after considering submissions made during the public consultation process, as well as the need to protect households and businesses from severe financial strain while ensuring the sustainability of the electricity utility.
“Government resolved to intervene to ensure that the negative impact on households and businesses alike is mitigated without destabilising EEC,” said Dlamini.
RELATED | Govt to respond to 13.61% tariff hike – PM
The Prime Minister announced that government had approved E100 million for 2026 and another E100 million for 2027 to be channelled through ESERA.
The regulator will work with EEC to determine how the funds will be used to provide relief to consumers and mitigate future steep tariff increases.
The Prime Minister noted that while the tariff increase was necessary, it would inevitably place pressure on consumers.
According to government, the current electricity pricing challenges stem from historical decisions that resulted in the country relying heavily on imported electricity instead of prioritising local generation.
“It is clear that the latest tariffs will have undesired impact on citizens as well as EEC. The increase in tariffs and the corresponding impact are a result of historical decisions made to fully rely on imported power rather than locally generated power,” he said.
NOW READ | I was fired – Savannah
The E200 million cushion from government is expected to relieve EEC by about half of its revenue requirement of E437.88 million for the 2026/27 financial year.
This amount includes E175 million linked to import tariff escalations, mainly adjustments from power suppliers including Eskom, Electricidade de Moçambique (EDM) and NTCSA, as well as E262.8 million arising from the 2024/25 under-recovery.
Initially, electricity tariffs for the 2026/27 financial year had been projected to increase by an average of 7%.
However, the additional revenue requirement resulted in EEC seeking a much higher adjustment of 13.67% on top of the 7% increase, bringing the total requested increase to 20.67%.
Under this proposal, E100 would have purchased only 32 electricity units.
After considering EEC’s justification, public submissions and technical reviews, ESERA eventually approved a lower tariff increase of 13.61%.
The E200 million government intervention is expected to further reduce the financial burden on consumers.
Projects Aimed at Stabilising Electricity Prices Revealed
Government says several projects are underway to stabilise electricity prices and ensure long-term supply security.
Prime Minister Russell Mmiso Dlamini said government was working towards energy self-sufficiency by 2030.
He said planned power generation projects were expected to collectively produce 188.6 megawatts by that year.
These include:
– A 75MW solar project by Independent Power Producers (IPPs)
– A 40MW biomass project by Ubombo Sugar Limited
– The 13.6MW Lower Maguduza Hydro Project
– A 10MW expansion at the Maguga Hydropower Station
– A 50MW project by RES Corporation
In addition, government is considering more generation licences that could add up to 1 400 megawatts to the national grid.
Dlamini said this would help eliminate reliance on imported electricity while supporting industrial growth under national programmes such as the Nkwe Programme of Action and the Grand Plan for National Transformation.
“Additionally, Eswatini Electricity Company will expedite necessary internal reforms aimed at achieving sustainability and energy self-sufficiency,” he said.
The Prime Minister thanked the nation for its understanding during what he described as a transitional period for the country’s energy sector.
Additional Context
Eswatini currently imports a significant portion of its electricity from neighbouring countries. Expanding local generation capacity, particularly through renewable energy projects, is seen as key to stabilising tariffs and strengthening energy security.
