By Ncaba Ntshakala
The Eswatini Electricity Company (EEC) and Old Mutual have entered into a major agreement for the construction of the 13.5MW Lower Maguduza Hydro Power Scheme, a project that promises to significantly change Eswatini’s energy landscape.
The signing ceremony, held at the EEC headquarters, Eluvatsini House, on Monday, was said to be a pivotal step in the country’s drive towards energy security and the promotion of renewable energy sources.
The project is scheduled to break ground by the last quarter of 2024. It is also projected to increase Eswatini’s local power generation capacity by 20%, adding approximately 64 GWh of clean energy to the national grid annually.
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The first unit of the plant is expected to become operational by the end of 2024. This development was further said to come at a crucial time as Eswatini seeks to reduce its dependence on electricity imports and pivot towards more sustainable, homegrown energy solutions.
Key agreements were signed between EEC and Middle Lusutfu Hydropower (Pty) Ltd (MLH), the Independent Power Producer (IPP) responsible for overseeing the project.
These agreements include a long-term Power Purchase Agreement (PPA) addendum and Direct Agreements.
The PPA guarantees that the electricity produced by the hydropower station will be sold to EEC at an inflation-adjusted rate.
Moreover, after the PPA term, the plant will be transferred to EEC at no cost, which is a major win for the country’s energy infrastructure.
Speaking at the signing ceremony, EEC Managing Director Ernest Mkhonta expressed his enthusiasm for the long-anticipated project.
“This is a project we have been anticipating for so many years. I am happy that we progress to this level, where we will see earthworks on the project site,” Mkhonta stated.
He emphasized that the Lower Maguduza Hydro Power Station is a cornerstone of EEC’s strategic goal to boost local electricity production while simultaneously stimulating economic growth through job creation and attracting investment.
Echoing this sentiment, Old Mutual CEO Muzi Bell, representing the project’s financiers, praised the partnership’s progress and stressed the scheme’s potential to address Eswatini’s energy security challenges.
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“This project will address Eswatini’s power security challenges and demonstrate our commitment to contributing to sustainable development in the country,” Bell said.
The construction phase of the Lower Maguduza Hydro Power Scheme is expected to create employment opportunities for at least 100 local workers, with service contracts also being extended to domestic providers throughout the PPA’s duration.
The project mandates that over 25% of construction contracts involve Eswatini-based companies, which will ensure that local businesses benefit from the development.
Technologically, the hydropower station will be situated along the Lusutfu River, near Sidvokodvo, and will include a diversion weir, a 66kV transmission line, a footbridge across the dam, and upgrades to existing substations.
Designed as a mid-merit facility, the plant will supply power during peak and non-peak demand periods, ensuring a reliable and efficient source of clean energy.
The Lower Maguduza Hydro Power Station as the first large-scale power generation project in Eswatini financed by private investment, will not only strengthen the country’s energy independence but also contribute to the nation’s climate goals.
Currently, Eswatini relies heavily on electricity imports mostly from South Africa. Introducing the hydro power station is expected to reduce Eswatini’s electricity import while helping the country triple its renewable energy capacity by 2030, a key milestone in its national energy and environmental strategy.
