Swaziland Overview

Published by Swazi Review of Commerce & Industry (Pty) Ltd

Energy

Government said in its Programme of Action to 2018 that because the country’s electricity generation and distribution capability is a key component of national infrastructure, the commitment to attaining self-sufficiency is irreversible and strengthened by the awareness of the long-term fragility of existing power-supply agreements. A number of undertakings are thus scheduled to be carried out in the short and medium term.

Swaziland’s hydroelectric plants can generate up to about 40 percent of the country’s needs: the remainder is imported, mostly from South Africa where the parastatal power utility has in recent years been implementing drastic tariff-hikes to fund its expansion programme, and rolling blackouts – of the supply to Swaziland, included – when it cannot meet domestic demand. To circumvent this situation which serves to undermine business- and investor-confidence, government’s Programme of Action to 2018 reiterates the desire to see, among other avenues, the establishment on home soil of a 300-MW thermal power station. The document goes on to declare that a feasibility study for such a facility is expected to be completed by 2016, with designs developed by 2017 and construction commencing in 2018.

The Minister of Finance, Martin Dlamini, said in his 2014/15 Budget Speech that government recognises the critical status of energy supply with regard to the invigoration of the economy and also to rural development. He said that government also recognises the need to develop alternative sources of energy as part of the efforts to reduce the kingdom’s reliance on energy imports. Minister Dlamini then outlined the plans that government would undertake during the 2014/15 fiscal year and in the medium term:

  • Continue extending the national grid to rural areas via the Rural Electrification Programme
  • In collaboration with the Southern African Trade Hub, develop an Independent Power Producer (IPP) Policy which will enable more power generators to enter into the electricity industry
  • Increase hydropower generation capacity at the Dwaleni Power Station on the Ngwempisi River
  • Continue promoting the exploration of renewable sources of energy such as wind and solar power
  • Conduct energy-access surveys to accurately measure electricity access throughout the country

THE PIONEER

On 3 December 2014, Ubombo Sugar Limited (Ubombo) of Big Bend became the country’s first official contributing IPP, granted a 25-year licence by the Swaziland Energy Regulatory Authority (SERA) www.sera.org.sz to produce from renewable sources 41-MW of electricity for supplementation of the national grid via the Swaziland Electricity Company (SEC) www.sec.co.sz. Ubombo began co-generating power at its mill in 2011, attaining company self-sufficiency and then making further investments in producing surplus supplies for sale.

Swaziland’s news media reported during the course of this review period that SERA had confirmed being approached by four other IPPs seeking permission to establish operations in the kingdom and that these renewable-energy producers had begun negotiations with both SERA and the SEC. The applicants, three of which are locally based and one foreign, were listed as:

  • Montigny Investments
  • T-Colle Investments
  • Services Global L (SGL) Power Swaziland
  • Wunder Sight Investments

SERA CEO, Vusi Mkhumane, was quoted as saying that even though the SEC had entered into a Memorandum of Understanding with each of these IPPs, it was their proposed selling price per unit of electricity that would ultimately prove crucial in negotiations, as the SEC would not enter into a Power Purchasing Agreement (PPA) that involved paying more than is charged by South Africa or the kingdom’s other source, Mozambique.

Taken together, these licence applications have the potential to land more than E5.3-billion in new investments and generate 2 000-plus employment opportunities:

  • Montigny Investments is a local timber producer which in July 2014 purchased SAPPI Usuthu Forest Products Company for E1-billion (see Agriculture): the price included SAPPI’s redundant pulp mill which Montigny has begun converting into what is intended to become the largest integrated timber milling and processing site in Southern Africa. While that initiative is foreseen to cost about E500-million (see Manufacturing), Montigny envisages investing an additional E500-million in a three-aspect, onsite power-generating plant utilising available fibre-flow from the mills and forest residues.
  • T-Colle Investments is Mbabane-based and reportedly seeks to invest E5-million in generating 360-kW, 100 percent full-load, from a hydroelectric plant that it would set up at Dwaleni’s Ferreira Canal in the Manzini region. 
  • SGL Power Swaziland is a joint venture between SGL Power Mauritius, Mafutha Unlimited Investments and two individual shareholders: it proposes to invest E1.8-billion in a 300 ha, 25-year-lifespan solar farm with a production capacity reaching 100-MW, to be sited on a property outside Manzini.
  • Wunder Sight Investments, from Spain, proposes establishing two photovoltaic plants in the Lubombo region at a cost of just over E26-million: the sites will together generate about 950-KW and have an economic lifespan of approximately 40 years.

No announcements regarding the progress of these applications had been made by the close of the period in review.

THE REGULATOR

In order to meet and exceed the challenges identified, deliver on the mandate and achieve the objectives of establishing the regulatory authority, SERA has adopted the following strategic objectives:

  • To regulate the electricity industry in a manner that is transparent, fair and predictable
  • To promote an environment that will ensure universal access to electricity services and products
  • To regulate in a manner that ensures security of supply and promotes the integrity and sustainability of the electricity industry
  • To promote a regulatory environment that ensures fair competition in the electricity industry
  • To regulate in a manner that ensures efficiency of service provision and that regulated entities have the ability to finance their activities
  • To promote the interest of the public and customers in respect of prices, charges and quality of supply
  • To be an effective organization that delivers on its mandate and mission

EXCELLENCE RECOGNISED

Third-quarter 2014 saw the SEC bestowed with ISO 9001: 2008 Certification in recognition of its Quality Management Systems for Business. The Minister of Natural Resources and Energy, Jabulile Mashwama, said when taking official receipt of the award that she was impressed by the Company’s recognition of the fact that the road to success for any organization lay in the use of the correct tools. She said it gave her great pleasure to celebrate the accomplishment and was humbled to have led the Ministry during a period when parastatals for which she was responsible took great strides in quality management. Minister Mashwama extended her appreciation to the SEC Board, management and employees for their unwavering diligence: she pointed out that adoption of ISO 9001:2008 will greatly benefit the organization through product and service quality, ensure consistency and provide customers with a clear picture of what to expect henceforth.

With the SEC having celebrated its 50th anniversary during the previous reporting period, the Minister said it was gratifying to note that the ISO certification was the culmination thus far of consistent growth and noteworthy achievements during the past half-century. She described the latest milestone as not just belonging to the SEC Board, management and employees, but to the entire Swazi nation, as it was a standard aimed at ensuring customer satisfaction and thus was evidence of how much the company valued its clientele. 

Minister Mashwama said she had noted that the SEC had reviewed all of its processes to guarantee a high work-ethic that would in turn lead to fully adopting the ‘business unusual’ model and place itself in a better position to attain its goals. She added that being ISO certified was the beginning of a new and even more challenging era for the SEC as it has to sustain the level implicit in the latest accomplishment: the Minister issued a reminder that it is now a prerequisite for all government ministries and departments to work towards the realisation of His Majesty King Mswati III’s Vision 2022 and pointed to the SEC’s achievement as a prime example of successful striving.

Worldwide Recognition
SEC MD, Sengiphile Simelane, said ISO certification meant that the company was globally recognised, documented and formalised, so customers could look to receive top quality service. He described the journey to certification as having begun in 2012 following a strategic decision by the Board of Directors and management to adopt the Quality Management System (QMS). Simelane said that management’s commitment to achieving ISO certification was demonstrated through companywide awareness training that sensitised employees with regard to the QMS. He said that an all-embracing management system intertwined with a culture of continual improvement was all that the SEC sought to achieve by adopting the international standard.

SEC Board Chairman, Edgar Mavuso, said that the next step would be to embark on the implementation and certification of the Integrated Management System, which hopefully would take place in March 2015. He added that the company also intended, as soon as possible, to adopt the Occupational Health and Management System (OHSAS 18001:2007) and the Environmental Management System (ISO 14001:2004), which were built upon existing features.

SAVING THE PLANET

On Saturday, 29 March 2014, the SEC hosted Swaziland’s observation of the annual ‘Earth Hour’ during which citizens of the world are encouraged to switch off non-essential lights, geysers, pool pumps and the like between 8.30 pm and 9.30 pm, local time, in an attempt to promote energy conservation. The theme for 2014 was ‘Be a Superhero’, the message being for individuals to use their power to save energy and the planet. In Swaziland it has become the custom for participants to gather in the amphitheatre of the kingdom’s renowned art-space in Malkerns, House on Fire, to be entertained and informed: the local media reported that Swazis came in their greatest-ever numbers to the most recent get-together.

The Swaziland Environment Authority’s Gcina Dladla was the MC for the evening, his ready wit peppered with sobering statements such as the need to reduce energy consumption by 2050 or inherit a planet that will not be able to provide the energy required for it to be sustainable. Constance van Zuydam of the Renewable Energy Association of Swaziland said she was pleased to note how the event had grown in leaps and bounds since Swaziland began participating, adding that her organization applauded the SEC for being a true friend to the planet and not only standing against climate change, but also encouraging Swazis to do the same. She said that the hour of being aware of energy usage should become a way of life, and implored industry to implement strategies for energy efficiency measures.

SEC Managing Director, Sengiphile Simelane, emphasised the importance of energy conservation: he stated that currently there was a greater demand than there was the capacity to supply. This was supported by the Ministry of Natural Resources and Energy representative, Peterson Dlamini, who said the fact that Swaziland depended on at least 60 percent of its electricity supplies being sourced from neighbouring countries was something that needed to be addressed. He pointed out that the overwhelming bulk of the electricity that Swaziland imports is generated by thermal power stations fired by fossil fuels, and that it was common knowledge that such technology comes with environmental and health concerns. Swaziland is said to be ideal for solar, wind, biogas and even the invasive Sandanezwe plant which it is said can be used as a source of energy.

At switch-off time, 8:30 pm, 60 volunteers from the audience – representing the 60 minutes of ‘Earth Hour’ - formed a circle around the outdoor venue’s central fire and began beaming flashlights into the sky. Viewed from space, ‘Earth Hour’ marches in a longitudinal band around the planet in accordance with the rolling of its time-zones.