Eswatini has made significant progress in its renewable energy industry with the start of work on its first privately funded hydroelectric power project.

The hydroelectric project, which is situated on the Luso River, supports the nation's objectives of diversifying its energy mix in conjunction with future solar advances. African Clean Energy Developments and Energy Infrastructure Management Services (EIMS Africa), two South African renewable energy companies, are leading the charge.

Since 2004, the program has been under development, but progress has been hampered by regulatory complications. Before proceeding, the project needed modifications to tax laws and legal frameworks because it was the first privately owned hydroelectric plant in Eswatini and the first hydropower project in EIMS Africa. Despite these obstacles, it has managed to establish a solid financial base, underpinned by a government-backed guarantee and a 30-year power purchase deal with the Eswatini Electricity Company.

An estimated $62.4 million to $67.6 million will be invested in the facility, which will encompass electrical infrastructure, civil works, and equipment. Due to the scarcity of private hydropower projects in Southern Africa, financing was a major challenge. However, the project was allowed to proceed thanks to funding provided by Standard Bank and the Eswatini Public Pension Fund.

With the first power generation anticipated for late 2026, the facility is anticipated to supply electricity to around 11,000 houses once it is operational. At full operation, the plant's 13.5 MW capacity would power thousands of homes, however, production may be impacted by water levels. Along with increasing the availability of power, the project will support Eswatini's larger renewable energy goal and provide 100 to 150 employees during construction.