Eswatini Energy Plan Aims to Cut Power Imports by 2034
ESWATINI · ENERGY & ECONOMY
Key Facts
- —The dependence The IMF records that Eswatini imports 70% to 80% of its electricity, from South Africa and Mozambique.
- —The target The energy masterplan aims to cut import dependency from over 50% to under 10% by 2034, with renewables supplying around 70% of generation.
- —The growth Growth came in at 4.9% in 2025, above the 4.3% the IMF had projected. The Fund expects it to moderate in 2026 without giving a figure.
- —The transfers Customs union receipts are budgeted at 11.4 billion emalangeni for 2026 and 2027, roughly a third of revenue and grants.
- —The debt The IMF puts public debt near 45% of GDP at the end of the last fiscal year, rising toward 50%. The central bank records 42.3 billion emalangeni, or 40.6%.
- —The tariff The energy regulator approved an average 13.61% tariff increase for 2026 and 2027, against a utility request of 20.67%.
Eswatini buys most of its electricity from its neighbours. A plan running to 2034 aims to change that, and the economy behind it grew faster last year than anyone forecast.
The Number That Was Already Out of Date
A projection of 4.6% growth for 2026 has circulated widely. It needs a correction.
That figure came from the IMF’s 2025 Article IV staff report, published in September 2025. At the time it was the Fund’s forward projection.
It has been overtaken. An IMF mission visited in July and August 2026. It reported that 2025 growth had actually come in at 4.9%, above the 4.3% previously projected for that year. On 2026 the mission said only that growth is expected to moderate.
The reasons it gave were higher fuel costs, weaker global demand, weather-related disruptions and a moderation in public investment. It did not publish a replacement number. So the honest position is that 2025 was better than expected, and 2026 has no current published figure.
Other indicators from that mission are firmer. Inflation was 2.6% in June 2026. The central bank policy rate has been held at 6.75% since May 2025. Unemployment stood at 33.5%. Private sector credit grew 10.6% year on year to May 2026.
Plugging In
Eswatini’s electricity problem is simple to state. It does not make most of what it uses.
The IMF records imports at 70% to 80% of consumption, drawn from South Africa and Mozambique. Trade reporting puts the South African share above 80%. Either way, the country’s lights depend on a neighbour’s grid and a neighbour’s tariff decisions.
The answer is a masterplan adopted in October 2018 and running to 2034. Its headline target is to cut import dependency from over 50% to less than 10%. It puts total required domestic capacity at 676 megawatts, with renewables supplying around 70% of generation by 2034. Universal electrification is targeted by 2030 in the plan’s reference scenario.
The plan identified solar, wind, bagasse co-generation and hydro as economically competitive. It judged coal and gas uneconomic unless forced into the mix.
Projects have followed. A 10 megawatt solar plant at Lavumisa has been completed. A larger solar project at Tsamela is under development, though reported capacities differ across sources and should be checked against the utility. Bidding has opened for 80 megawatts of biomass. A 300 megawatt coal-fired station at Lubhuku is also planned, which sits awkwardly with the plan’s own economics.
Consumers are paying for the transition. The energy regulator approved an average tariff increase of 13.61% for the 2026 and 2027 year. The utility had asked for 20.67%. Corporate energy and demand charges rose 17% each.
The Cheque From Pretoria
The Southern African Customs Union pools import duties across its members and distributes them by formula. For Eswatini, that distribution is the largest single line in the budget.
The 2026 and 2027 budget totals 36.92 billion emalangeni, with revenue and grants of 31.90 billion. Customs union receipts are budgeted at 11.4 billion, with over 300 million going into a stabilisation fund. That is roughly 36% of revenue and grants from one source.
The volatility is the problem. The central bank projects customs revenue rebounding 12.9% in the 2026 and 2027 year, after contracting 20.4% the year before. A swing of that size in a third of the budget is not something a finance ministry can plan around.
Historically the weight has been larger still. The IMF recorded customs receipts at 14.2% of GDP and 45.2% of tax revenue in the 2024 and 2025 fiscal year, calling that historically high. It projected a fall to 10.7% of GDP the following year.
The deficit reflects it. The budget deficit was 6.1% of GDP in the last fiscal year, up from 1.1%, with 5.9% budgeted for the current one. The wage bill is 12.44 billion emalangeni, or 33% of total expenditure, down from 42% in the 2018 and 2019 year.
Sugar and Textiles
Two industries carry most of Eswatini’s non-transfer economy, and both face pressure.
Sugar is the larger. The IMF attributed part of 2024 growth to a strong rise in sugar exports. Trade reporting puts industry revenue between 7.7 and 8 billion emalangeni, with about 1.1 billion in exports to the European market. Those are trade press figures, not official ones.
Textiles employ around 20,000 people and account for roughly 7.6% of GDP, among the top five export earners. About 89% of textile exports go to South Africa and around 7% to the United States.
That split matters for a reason worth stating clearly. Because only about 1% of Eswatini’s total exports go to the United States, American tariff changes have little macroeconomic effect here. The textile sector feels them; the national accounts barely do.
The sector’s real pressures are domestic. Electricity is around 40% of unit operating costs, which is why the energy plan is an industrial policy as much as an energy one. A 15% value added tax on water took effect in February 2026. And a proposed wage increase of nearly 67% over three years is under negotiation with the trade union.
What This Means If You Live or Invest Here
For a business, the electricity question is the one to model first. Power is imported, tariffs are rising, and a large share of manufacturing cost sits in that line. The 2034 target is real policy, but the transition itself raises prices before it lowers them.
The currency is pegged one to one with the South African rand, which removes exchange rate risk against Eswatini’s dominant trading partner. It also means South African monetary policy is effectively Eswatini’s.
For anyone contracting with the state, the customs union swing is the risk. A budget where a third of revenue can move 20% in either direction is a budget where payment timing slips.
For residents, inflation at 2.6% and a policy rate held at 6.75% describe a comparatively stable price environment. Unemployment at 33.5% describes a labour market that is not.
Public debt is on a rising path. The IMF puts it near 45% of GDP at the end of the last fiscal year and projects it toward 50%. It sees debt peaking above 52% before easing back to around 45% by the early 2030s. The central bank’s own figure is 42.3 billion emalangeni, or 40.6% of GDP. The definitions differ, and both are worth quoting with their source attached.
Why Energy Independence Is Really About Cost
It is worth separating two things that the phrase energy independence runs together.
Security of supply is one. A country drawing four fifths of its power across a border is exposed to its neighbour’s generation problems, and southern Africa has had plenty of those. When the regional grid is short, an importer is at the back of the queue.
Cost is the other, and for Eswatini it is the more immediate. Imported power is bought at a negotiated price, in a market where the seller has its own cost pressures. A major supply contract with the South African utility was set to end in 2025, which concentrated minds.
Domestic solar and biomass change that calculus in a specific way. Once built, a solar plant has almost no fuel cost, so its output is priced by the capital behind it rather than by anyone else’s coal. For a manufacturer where electricity is 40% of unit cost, predictability is worth as much as the headline tariff.
The transition period is the hard part. Building generation costs money before it saves any, and the tariff increases approved for this year are part of how that is paid for. Businesses will feel the cost of independence years before they feel the benefit.
What Is Not Known
The IMF has not published a numerical growth projection for 2026. Its August 2026 mission said only that growth would moderate.
The capacity of the Tsamela solar project is reported differently by different sources, and should be checked against the electricity company before use.
Whether the 2018 energy masterplan has been superseded by a newer plan or a revised target year could not be confirmed.
Sugar production tonnages and export splits from the industry association were not obtainable.
And textile employment and export values come from trade reporting rather than from a government or central bank source.
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Sources
- IMF — Eswatini 2026 Article IV mission concluding statement, August 2026
- IMF — Eswatini 2025 Article IV staff report
- Kingdom of Eswatini — Energy Masterplan 2034
- Central Bank of Eswatini — Annual Economic Review 2025 and 2026
Frequently Asked Questions
How much electricity does Eswatini import?
The IMF records imports at 70% to 80% of consumption, drawn from South Africa and Mozambique. The energy masterplan targets cutting import dependency to under 10% by 2034.
Is the IMF still forecasting 4.6% growth?
No. That was a projection made in September 2025. The Fund’s August 2026 mission reported 2025 growth of 4.9%, above what had been projected, and said 2026 growth would moderate without publishing a figure.
How important are customs union receipts?
They are budgeted at 11.4 billion emalangeni for 2026 and 2027, roughly 36% of revenue and grants. They contracted 20.4% in the previous year and are projected to rebound 12.9%.
What is happening to electricity tariffs?
The energy regulator approved an average increase of 13.61% for the 2026 and 2027 year, against a utility request of 20.67%. Corporate energy and demand charges rose 17% each.
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