EEC DENIES E11.2M GOVT OAN, BUT WILLING TO PAY

LOBAMBA – The Eswatini Electricity Company (EEC) denies receiving a government loan of E11.2 million, but says it is willing to repay it.

This was revealed during the Public Accounts Committee (PAC) sitting with the Ministry of Natural Resources and Energy on the ministry’s audit of EEC yesterday at the House of Assembly. The said loan dates back to 1998 and the company was said to believe that it was only a grant by government for the Maguga Dam project.  Explaining the loan before the PAC, the Director of Energy, Thabile Nkosi, said there were no documents of the agreement of the loan repayment. She revealed that there were letters from the ministry’s principal secretary addressed to KOBWA and EEC on the issue of the loan. “It was contained that the money was government’s contribution to the company. However, it would be prudent to investigate the matter,” Nkosi said. The company’s Finance General Manager, Musa Mathunjwa, acknowledged that there was a Maguga Dam project which was done by the company with funds from government.

Agreements

“The first phase of the project was funded by government and EEC took over. There were no agreements made but the only evidence is that it is known that the first phase was paid for by government,’’ Mathunjwa said.   
He further mentioned that engagements between the company and government were in the form of meetings which did not have any records. Meanwhile, according to Auditor General Timothy Matsebula’s report, the E11 240 180.60 was granted without repayment conditions to EEC for the construction of the Maguga Dam Hydro-electric project. The financial statement of the entity for the year ended March 31, 2020 showed that the loan was payable to government with no stipulated interest rate and the loan was without collateral, as per the agreement.

The AG stated that the loan had no repayment period and amount. He said as a result, no payment was made by the company over the years and the amount had not changed in the records of the entity. “The entity is not aware of what interest rate will be charged on the government loan,” said the AG. He added that he was not content with the arrangement between government and the parastatal. Matsebula highlighted that in principle, every loan agreement had to outline clearly the terms and conditions which include interest rates, repayment amount and period, surety and all other relevant parameters and obligations of the loan.  “I expected the Ministry of Natural Resources and Energy, the Ministry of Finance and the Eswatini Electricity Company to have a record of this government loan,” he said.

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