<\/p>\n
The eSwatini Electricity Company (EEC) imports almost 80% of electricity from South Africa\u2019s Eskom and Mozambique\u2019s Electricidade de Mo\u00e7ambique, leaving EEC exposed to regional prices and supply disruptions.<\/p>\n
<\/p>\n
An IMF assessment found that EEC\u2019s operating profit turned negative in 2023\/24 before deteriorating to a loss of about $15 million in 2024\/25.<\/p>\n
<\/p>\n
The decline reflected drought-related hydropower shortages, weaker electricity sales, large customers moving to self-generation and higher import costs following the expiry of a long-term Eskom contract.<\/p>\n
<\/p>\n
EEC requested a tariff increase of about 25% for 2025\/26. The regulator approved increases across two years, but the government delayed the adjustment and approved a single 11.7% increase for 2026\/27 to limit pressure on households and businesses.<\/p>\n
<\/p>\n
The IMF said tariffs remaining below cost-recovery levels were placing pressure on maintenance, infrastructure investment and cash flow.<\/p>\n
<\/p>\n
EEC debt reached nearly $60 million at the end of 2025, equivalent to about 1% of gross domestic product. Cash constraints reportedly forced borrowing for wages, while some suppliers moved from credit arrangements to payment on delivery.<\/p>\n
<\/p>\n
Under the IMF baseline, potential government exposure to EEC could reach 4.4% of gross domestic product by 2031\/32.<\/p>\n
<\/p>\n
The fiscal risk could rise to 9% under a moderate stress scenario and 13.9% under a severe scenario involving weaker growth, higher inflation, lower electricity sales and increased borrowing costs.<\/p>\n
<\/p>\n
Losses could approach $120 million under severe conditions, with government recapitalisation of approximately $114 million required.<\/p>\n
<\/p>\n
The IMF recommended a gradual move towards cost-reflective tariffs, accompanied by targeted protection for vulnerable households.<\/p>\n
<\/p>\n
If government limits tariff increases for affordability reasons, the resulting subsidy should be funded and disclosed transparently through the national budget rather than absorbed by EEC.<\/p>\n
<\/p>\n
Reducing electricity losses, improving metering and collections and expanding economically viable domestic solar, hydropower and biomass generation could reduce import dependence.<\/p>\n
<\/p>\n
–IMF\/ChannelAfrica–<\/p>\n","protected":false},"featured_media":41640,"template":"","meta":{"_acf_changed":false,"_members_access_role":[],"_members_access_error":"","_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-48469","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"eSwatini faces substantial fiscal risks from the state-owned electricity company as below-cost tariffs, rising import prices and increasing debt weaken financial sustainability, the International Monetary Fund (IMF) says.","published_date":"","news_description":"eSwatini faces substantial fiscal risks from the state-owned electricity company as below-cost tariffs, rising import prices and increasing debt weaken financial sustainability, the International Monetary Fund (IMF) says.","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48469","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":2,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48469\/revisions"}],"predecessor-version":[{"id":48471,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/48469\/revisions\/48471"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/41640"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=48469"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=48469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}