Eswatini has commenced construction on its first privately funded hydroelectric power plant, marking a major step forward in its renewable energy sector.
Located on the Luso Free River, a tributary of the Lower Magadusa River, the hydropower plant aligns with the country’s goals of diversifying its energy mix alongside planned solar developments. It is being spearheaded by South African renewable energy firms, African Clean Energy Developments and Energy Infrastructure Management Services (EIMS Africa).
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Challenges
The initiative has been in development since 2004, with regulatory complexities delaying progress. As Eswatini’s first privately owned hydroelectric plant and EIMS Africa’s first hydropower venture, the project required adjustments to tax policies and legal frameworks before moving forward. Despite these challenges, it has secured a stable financial foundation, backed by a 30-year power purchase agreement with the Eswatini Electricity Company (SEC) and a government-supported guarantee.
Investment in the plant is estimated between US $62.4M and US $67.6M, covering equipment, civil works, and electrical infrastructure. Financing was a significant hurdle due to the rarity of private hydropower projects in Southern Africa. However, financial backing from Standard Bank and the Eswatini Public Pension Fund enabled the project to move forward.
Once operational, the plant is expected to provide electricity to approximately 11,000 homes, with initial power generation projected for late 2026. The plant will have a 13.5 MW capacity, supplying power to thousands of homes at peak operation, though water levels may influence output. In addition to boosting electricity supply, the project will generate 100 to 150 jobs during construction and contribute to Eswatini’s broader renewable energy strategy.
