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IPPs pledge R5bn as Swaziland jolted into finding alternative sources of power

Published Jun 17, 2014


Stephen Langa Mbabane

The pledge by the DA in last month’s election to stop Eskom exports of electricity to neighbouring countries has jolted Swaziland into finding alternative sources of power.

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The Swaziland Electricity Company (SEC) last week announced advanced talks with four independent power producers (IPPs) that would commit a total of R5.3 billion investment in the country’s power industry should SEC agree to purchase the firms’ output.

“Some of the solar photovoltaic IPPs could start putting together their proposed projects as early as next year,” said the SEC.

Swaziland depends on Eskom for 80 percent of its power. Ten percent is purchased from Electricidade de Moçambique. Power is transmitted through 132 kilovolt (kV) and 400kV transmission lines, the latter owned by the Moçambique Transmission Company, of which SEC owns one-third.

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The remaining electricity is produced by small hydroelectric power units. Two sugar plantations in the Lubombo region produce power from ethanol, which is distilled from cane. Surplus is sold to the SEC and put on the national grid.

The Swaziland Electricity Company Act calls for the privatisation of the energy sector. Swaziland consumes a little more than 1 billion kilowatt-hours (kWh) of electricity a year.

However, with only 27 percent of the country electrified (40 percent in urban areas and only 4 percent of rural areas) and an initiative under way to electrify rural regions, electricity demand will grow beyond what Eskom can provide.

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Local power generation is inevitable.

Even with Eskom imports, the power supply in Swaziland is erratic. “When the weather is fine and the electricity supply is disrupted the cause is usually physical damage to the infrastructure. Thieves cut down and steal wire or there is vandalism,” said a source at the maintenance division of SEC.

The SEC said it would not pay the IPPs more per unit than was charged by Eskom.

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Of the four companies vying to produce power in Swaziland and in negotiations with the Swaziland Energy Regulatory Authority (Sera), three are small local firms.

T-Colle Investments of Mbabane is looking to build a R5 million hydropower plant on a canal in the central Manzini region capable of generation 360kW of electricity. The firm will charge the SEC 70c per kW for the first three years of production.

Services Global L Power Swaziland (SGL Power) has pledged to invest R1.8bn to create viable solar power generating capacity. SGL Power said it would be ready in a matter of months to start generating what would ultimately be 100MW of solar-generated power to sell the SEC at R1.20 per MWh once negotiations were finalised for a 25-year power purchase agreement.

NHR Investments has committed R500 million to the energy sector to produce electricity to sell to the SEC.

The energy regulatory authority will not name the Spanish firm that wants to invest R3bn in a generation scheme to supply power to the SEC.

Memorandums of understanding had been completed between the SEC and the four IPPs, Sera reported.

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