Key Electricity Sector Legislation

The Legal Framework of the Electricity Power Industry in Eswatini

Power activities for which a license is required are as follows:

Recent legislative developments have introduced numerous changes in the Electricity Supply Industry (ESI). These changes are aimed at improving the operations of the organisation to ensure optimal and efficient utilization of resources in order to enhance the services offered by the Organization to its customers. They also protect electricity consumers.

The repealed Electricity Act of 1963 established the Swaziland Electricity Board (SEB, the predecessor to the present company) as a body corporate with the power to sue and be sued in its own name. The mandate of the organisation was to generate, transmit, distribute and supply electricity. This now repealed legal regime gave the organisation wide ranging powers as far as the Electricity Supply Industry (ESI) was concerned, and also empowered SEB to import and export electricity.

The said legal regime also gave SEB the power to regulate the Electricity Industry in Eswatini. This meant that SEB was both the player and the referee in the business. As such it was a criminal offence to generate, transmit, distribute or supply electricity without a license granted by SEB. Detractors of this situation criticized the arrangement for being a monopoly while proponents claimed that such a monopoly was necessary, especially during the industry's formative years.

Deregulation Process

On the 1st of March 2007, the Electricity Act of 1963 was repealed, as a result of the promulgation of the Electricity Act of 2007, along with the Swaziland Electricity Company Act of 2007 and the Energy Regulatory Authority Act of the same year.

The Electricity Act of 2007

The Electricity Act of 2007 provides for the regulation of the Electricity Supply Industry in Eswatini. It generally regulates the generation, transmission, distribution and supply of electricity in Eswatini. Any person generating, transmitting, distributing or supplying electricity in the country is required to be licensed by the Energy Regulatory Authority.

Power activities for which a license is required are as follows:

  • Generation of electricity.
  • Transmission of electricity.
  • Performing the functions of integrated power system operator.
  • Distribution of electricity.
  • Supply of electricity.
  • Off-grid and mini-grid supplies of electricity.
  • Importing and exporting electricity into or outside of the Kingdom.

Exemptions

People or entities that do not need a license to generate, transmit, distribute and supply electricity are the following:

  • Any person who generates, transmits or distributes electricity for his own use.
  • Any person who sells less than 1GWh of electricity per annum to customers.
  • Off-grid and mini-grid schemes specifically exempted by the Minister under the statutory ministerial powers provided for.

It is an offence to generate, transmit, distribute or supply electricity without a license duly issued or granted by the Energy Regulatory Authority. Any person found to have done this outside the parameters of the law is guilty of an offence and may be fined an amount of up to E50 000, sentenced to 2 years imprisonment or both.

Dispute Resolution in the ESI

With the proposed deregulation of the Electricity Supply Industry, it has been projected that it is inevitable for conflict to arise in the industry because of competition that has been introduced.

The new legal regime, with this kind of foresight, establishes institutions to facilitate conflict resolution amongst stakeholders in teh electricity sector. One of the main institutions provided for in this regard is the Electricity Disputes Tribunal which will have jurisdiction to hear " determine all matters / disputes referred to it relating to the electricity sector. The Tribunal's decisions are binding to all affected parties.

Energy Regulatory Authority Act of 2007

The Act establishes an independent Energy Regulatory Authority as a body corporate with the power to sue and be sued in its own name. The following powers and functions have been given to the Authority:

  • To receive & process applications for licenses.
  • To modify / vary licenses.
  • To approve tariffs, prices, charges and terms and conditions of operating a license.
  • To monitor the performance and the efficiency of licensed operators.

Regarding hearing applications for the generation, transmission, distribution and supply of electricity, the Authority is obliged by the Act to act in a just manner administratively.

The Authority's decisions should be taken within a procedurally fair process and applicants for licenses should be heard before decisions against them are made. Decisions of the Authority must be reasonable and the determining factors should be disclosed if required.

Any party aggrieved by the decision of the Authority may review the proceedings in a court of law. The Authority also has the powers to arbitrate disputes in the ESI and these services are available upon request.

The Swaziland Electricity Company Act of 2007

The Swaziland Electricity Company Act of 2007, which converts SEB into a company called "Swaziland Electricity Company" to take over assets, liabilities, rights & obligations of SEC.

The objectives of the company are to generate, transmit, distribute and supply electricity also to import and export it into and out of Eswatini. This new company will be subject to regulation by the Energy Regulatory Authority.