Ubombo Sugar Secures E1.3 Billion EPC Contract with ISGEC for Major Power Project in Eswatini

Landmark Agreement to Boost Eswatini's Energy Security

Ubombo Sugar Limited (USL) has taken a significant step towards enhancing Eswatini's energy independence by signing a landmark E1.3 billion Engineering, Procurement and Construction (EPC) contract with India-based ISGEC Heavy Engineering Limited. The agreement, signed on Tuesday, December 9, 2025, at the Hilton Garden Inn in Mbabane, paves the way for a new power generation project set to transform the country's energy landscape.

This EPC contract follows closely on the heels of another crucial development: a E2.4 billion Power Purchase Agreement (PPA) signed a day earlier, on Monday, December 8, 2025, between Ubombo Sugar Limited and the Eswatini Electricity Company (EEC). These two agreements collectively lay the foundation for a nationally significant power generation initiative.

Project Scope and Capacity

The new power plant, a biomass co-generation facility, is designed to significantly expand Ubombo Sugar's contribution to the national grid. It will add an additional 24 megawatts (MW), bringing Ubombo Sugar's total export capacity to up to 40MW. Once fully operational, the plant is projected to supply approximately 141 gigawatt hours (GWh) annually, which is equivalent to about 14% of Eswatini's national electricity needs.

The total investment committed to this project is approximately E1.5 billion. Ubombo Sugar Limited will fund the project with E1.5 billion, with a substantial portion of E900 million secured through Eswatini's domestic banks, highlighting strong local financial backing.

Strategic Importance and Economic Impact

The project's primary objective is to strengthen Eswatini's energy security by reducing its reliance on imported electricity and stabilizing the national power supply. It is expected to play a vital role in alleviating pressure on the national electricity grid. The power plant will utilize bagasse, a renewable by-product of sugarcane, as its primary fuel source, aligning with environmentally friendly practices.

Beyond energy provision, the initiative is anticipated to deliver significant economic benefits, including the creation of approximately 500 construction jobs. A special program for Small and Medium Enterprise (SME) participation is also being developed to ensure broader local economic involvement.

Key Players and Timelines

The signing ceremony for the EPC contract saw Muzi Siyaya, Managing Director of Ubombo Sugar Limited, representing USL, while Yogesh Marwah, Chief International Marketing Officer, represented ISGEC Heavy Engineering Limited. The PPA signing was attended by dignitaries including HRH Prince Lonkhokhela, Minister of Natural Resources and Energy, and Ernest Mkhonta, Managing Director of the Eswatini Electricity Company.

ISGEC was chosen after a competitive procurement process, recognized for its extensive experience and proven track record in delivering complex power and sugar projects globally. The company boasts nearly nine decades of engineering expertise. Commercial operation of the new power plant is targeted for June 2028, with strict delivery timelines embedded in the EPC contract.