Service Contract No 2007 / 147-446 EuropeAid/125214 ... - Swaziland

Restructuring and Diversification 

Management Unit (RDMU) 

to coordinate the implementation of the 

National Adaptation Strategy to the EU 

Sugar Reform, Swaziland 

Service Contract No 2007 / 147-446 

EuropeAid/125214/C/SER/SZ: Restructuring and Diversification 

Management Unit to coordinate the implementation of the 

National Adaptation Strategy to the EU Sugar Reform, 

SWAZILAND 

EC General Budget – SU-21-0603 

SWAZILAND Assessment of Renewable Energy and Energy 

Efficiency Options in the Swazi Sugar Industry and 

an Analysis of Co-financing Options via Carbon 

Certificates 

M i s s i o n R e p o r t – J a n u a r y 2 0 0 9 

Submitted to: 

The Delegation of the European Commission to Swaziland 

4 th Floor Lilunga House, Somhlolo Road, Mbabane, Swaziland 

Ministry of Economic Planning and Development 

P.O. Box 602 

Mbabane H100, Swaziland

T A B L E O F C O N T E N T S 

TABLE OF CONTENTS 

LIST OF TABLES 

LIST OF FIGURES 

LIST OF ANNEXES 

ACRONYMS 

LIST OF UNITS 

ACKNOWLEDGMENTS 

EXECUTIVE SUMMARY 1 

1 INTRODUCTION 7 

1.1 Sugar Sector of Swaziland 8 

1.2 National Sugar Balance 11 

1.3 National Adaptation Strategy 13 

1.4 Terms of Reference for Energy/Carbon Study 14 

2 ENERGY BALANCE AND LEGAL FRAMEWORK OF SWAZILAND 16 

2.1 Current National Energy Balance 16 

2.1.1 Energy Imports and Exports 19 

2.1.2 Future Impacts and the Development of International Energy Markets 20 

2.2 Energy Balances within the Sugar Industry of Swaziland 22 

2.2.1 Status of Energy Production and Utilization 25 

2.2.2 The Royal Swaziland Sugar Corporation Limited – RSSC Simunye 27 

2.2.3 The Royal Swaziland Sugar Corporation Limited – RSSC Mhlume 30 

2.2.4 Ubombo Sugar Limited 33 

2.3 Political and Legal Framework Conditions 35 

2.3.1 Current Laws and Regulations in the Energy Sector 35 

2.3.2 Current Regulations Related to the National Sugar Market 37 

2.3.3 Perspectives 40 

2.4 Markets and Prices 41 

2.4.1 Energy Prices 42 

2.4.2 Sugar Prices 45 

2.4.3 Summary 49 

3 ASSESSMENT OF OPPORTUNITIES FOR ENERGY EFFICIENCY AND 

RENEWABLE ENERGY 51 

3.1 Energy Efficiency in the Sugar Industry 52 

3.1.1 Energy Efficiency by Optimization of the Existing Process 52 

3.1.2 Energy Efficiency by Optimization of the Operating Model 53 

3.1.3 Energy Efficiency by Changing Process Steps 55 

3.1.4 Energy Efficiency in Irrigation 60 

3.2 Bio-Energy in the Sugar Industry 64 

3.2.1 Bagasse 64 

3.2.2 Molasses 65 

3.2.3 Ethanol 66 

i 

I 

III 

V 

VI 

VII 

IX 

X

3.2.4 Vinasse 66 

3.2.5 Waste Water 67 

3.2.6 Tops and Leaves from Sugar Cane (Trash) 68 

3.2.7 Energy Plantation 70 

3.2.8 Mini Sugar Mills and own Bio-energy Generation 72 

3.3 Opportunities at National Level 73 

3.3.1 Wind Energy 73 

3.3.2 Solar Energy 73 

3.3.3 Hydropower 75 

3.3.4 Energy Efficiency 76 

3.3.5 Biomass–Energy 77 

4 CO-FINANCING OF MEASURES FOR ENERGY SAVINGS THROUGH 

THE CLEAN DEVELOPMENT MECHANISM IN SWAZILAND 80 

4.1 Introduction to CDM 80 

4.2 CDM Project Cycle 82 

4.3 CDM in Swaziland 86 

4.4 CDM Potential in the Sugar Industry 87 

4.4.1 Energy Efficiency to Avoid Coal Input 88 

4.4.2 Fuel Switch Substituting Coal with Trash 92 

4.4.3 Renewable Energy to the Grid 95 

4.5 CDM Potential outside the Sugar Industry 100 

4.5.1 Renewable Energy to the Grid 101 

4.5.2 Energy Efficiency in Housing and Buildings under CDM Programme of 

Activities 103 

4.6 Challenges Regarding CDM in Swaziland 105 

4.6.1 Determination of National Grid Factor 105 

4.6.2 Programmatic Approach on CDM 106 

5 PLANNING OF PHASE 2 OF ASSIGNMENT 109 

6 BIBLIOGRAPHY 112 

7 ANNEX 114 

ii

L I S T O F T A B L E S 

Table 0.1 Projects Summary Cost and Benefits 5 

Table 1.1: Sugar Cane Production in Swaziland 2006/07 – 2008/09 11 

Table 1.2: Sugar Mills and Sugar Production Swaziland 2006/07 -2008/09 12 

Table 1.3: Molasses Production in Swaziland 12 

Table 2.1: Installed Energy Generation Capacity in Swaziland 18 

Table 2.2: Import and Export of Coal, Swaziland 19 

Table 2.3: Electricity Generation and Imports, Swaziland 2004 – 2007 20 

Table 2.4: Energy Efficiency of the Boilers in the Sugar Mills 25 

Table 2.5: Current Cogeneration Installed Capacity in Swaziland Sugar Industry 26 

Table 2.6: Overview on Energy Input for Energy Generation in the Sugar Mills, 2006 26 

Table 2.7: Fuel Input for Energy Demand in Simunye Sugar Plant 27 

Table 2.8: Main Processing Figures of Simunye Sugar Mill, 2005 – 2007 28 

Table 2.9: Boiler Characteristics in Simunye Sugar Mill, 2008 28 

Table 2.10: Turbine Characteristics in Simunye Sugar Mill, 2008 29 

Table 2.11: Historical Electricity Generation in Simunye, 2004 - 2006 29 

Table 2.12: Fuel Input for Energy Demand in Mhlume Sugar Plant, 2005-2007 30 

Table 2.13: Main Processing Figures of Mhlume Sugar Mill, 2005-2007 31 

Table 2.14: Boiler Characteristics in Mhlume Sugar Mill, 2007/2008 32 

Table 2.15: Turbine Characteristics in RSSC Mhlume Sugar Mill, 2008 32 

Table 2.16: Fuel Input for Energy Demand in Ubombo Sugar Plant, 2004-2007 33 

Table 2.17: Main Processing Figures of Ubombo Sugar Mill, 2005-2007 34 

Table 2.18: Ubombo Boiler Capacities 34 

Table 2.19: Turbine Characteristics in Ubombo Sugar Mill, 2008 35 

Table 2.20: Electricity Prices by Sectors in Swaziland, 2005 – 2008 44 

Table 2.21: Typical Ethanol Production per ha by Crop 47 

Table 2.22: Sugar Price in relation to Ethanol 48 

Table 3.1: Major Maintenance Energy Efficiency Measures in the Sugar Plants 53 

Table 3.2: Energy Efficiency Measures by Optimization of Operating Model 55 

Table 3.3: Measures to Increase the Efficiency in the Boiler 56 

Table 3.4: Measures to Increase the Energy Efficiency in the Sugar Processing 58 

Table 3.5: Main Possible Energy Efficiency Measures in the Sugar Industry 59 

Table 3.6: Energy and Water Consumption of RSSC in 2007 63 

Table 3.7: Energy Saving Potential from Sprinkler Irrigation to Other Systems 63 

Table 3.8: Sugar Mill Production of Bagasse, 2007 64 

iii

Table 3.9: Sales and Prices of Molasses in Swaziland 2000 – 2007 65 

Table 3.10: Average CMS Price in August 2007 and October 2008 67 

Table 3.11: Urea and Ammonia Prices in August 2007 and August 2008 67 

Table 3.12: Potential of Trash for Energy Supply in Swaziland 69 

Table 3.13: Overview on Crop Yield and Fuel Output 71 

Table 3.14: Mini Biogas Plant 72 

Table 3.15: Overview on Solar Energy Projects per Unit 75 

Table 3.16: Hydro Power Potential in Swaziland 76 

Table 3.17: Commercial Forestry Plantations in Swaziland 78 

Table 4.1: Required Content of a Project Design Document (PDD) 83 

Table 4.2: Description of Transaction Costs 85 

Table 4.3: Estimates on CDM Project: Energy Efficiency to Avoid Coal Input 90 

Table 4.4: Financial Assessment of Energy Efficiency Project to Avoid Coal with and 

without CDM Component in Euro 91 

Table 4.5: Estimates on CDM Project: Fuel Switch from Coal to Trash 93 

Table 4.6: Financial Assessment of Fuel Switch Coal to Trash Project in the Sugar Mills 

with and without CDM Component in Euro 94 

Table 4.7: Estimates on CDM Project: Trash to Grid 96 

Table 4.8: Financial Assessment of Renewable Energy to the Grid Project with and 

without CDM Component in Euro 97 

Table 4.9: Financial Assessment of Renewable Energy Combined Heat and Power 

Project with and without CDM Component in Euro 97 

Table 4.10: Estimates on CDM Project: Biofuels for Transportation 101 

Table 4.11: Financial Assessment of Renewable to the Grid outside the Sugar Industry 

with and without CDM Component in E 103 

Table 4.12: Estimates on CFL Energy Efficiency Project 104 

iv

L I S T O F F I G U R E S 

Figure 1.1: Main Sugarcane Production Locations in Swaziland 10 

Figure 2.1: Primary Energy Sources, Swaziland 2007 17 

Figure 2.2: Electricity Consumption by Sectors in Swaziland, 2007 18 

Figure 2.3: Estimation on Future Energy Consumption Worldwide 21 

Figure 2.4: Sugar Processing 22 

Figure 2.5: Energy Scheme of a Sugar Plant in Swaziland 24 

Figure 2.6: Swaziland Sugar Industry Structure 38 

Figure 2.7: Swaziland Sugar Quantities Sold according to Markets 40 

Figure 2.8: Key Crude Oil Spot Prices in USD/barrel, 1986 – 2008 42 

Figure 2.9: Coal Import Costs in USD/ tonne, 1983 – 2007 43 

Figure 2.10: Prices of Coal, Diesel, Petrol and Paraffin in Swaziland in the Period 1996 

– 2007 in E cents (coal in E) 44 

Figure 2.11: Sugar Export Prices in Swaziland, 1997 – 2008 in E per tonne 45 

Figure 2.12: Price Development of Ethanol 2005 – 2008 46 

Figure 2.13: Feedstock Price for Ethanol Production compared with Sugar Prices 49 

Figure 2.14: Index Prices for the Electricity and Sugar in Swaziland, 2003-2008 50 

Figure 3.1: Top View and Cross-Section of Furrows and Ridges 60 

Figure 3.2: Sprinkler Irrigation 61 

Figure 3.3: Centre Pivot Irrigation 62 

Figure 3.4: Sugarcane Biomass Characteristics 68 

Figure 4.1: Additionality Benchmark Analysis 82 

Figure 4.2: CDM Project Cycle 82 

Figure 4.3: Main Stakeholders in the CDM Approval Process in Swaziland 86 

Figure 4.4: Emission Reduction in a CDM Project 89 

Figure 4.5: Possible Project Setting for Trash to the Grid Project 99 

Figure 4.6: Basic Structure of a CDM Programme of Activities 107 

Figure 4.7: Comparison of Project Lifetime of a Traditional CDM and a PoA 108 

v

L I S T O F A N N E X E S 

Annex 1: Description of Sugar Processing and Refining Process 

Annex 2: Technical Information: RSSC-Simunye 

Annex 3: Technical Information: RSSC-Mhlume 

Annex 4: Specification of Ethanol as Fuel 

Annex 5: Energy Requirements for Irrigation 

Annex 6: Cash Flow and Assumptions for Project on: Solar Water Heating; with and without 

CDM 

Annex 7: Project Idea Note: Peak Timbers Biomass Energy Project 

Annex 8: Cash Flow and Assumptions for Project: Energy Efficiency to Avoid Coal; with and 

without CDM 

Annex 9: Cash Flow and Assumptions for Project: Fuel Switch: Coal to Trash in the Sugar 

Mills; with and without CDM 

Annex 10: Cash Flow and Assumptions for Project: Renewable Energy (Trash) to the Grid by 

Out-growers; with and without CDM 

Annex 11: Project Idea Note: Energy Efficiency Measures in the Sugar Processing to Avoid 

Coal Input at RSSC, Swaziland 

Annex 12: Project Idea Note: Fuel Switch, Energy Efficiency and Renewables to the Grid at 

Ubombo Sugar Limited, Swaziland 

Annex 13: Working Group on the Grid Factor 

Annex 14: List of Participants of Kyoto Workshop 

Annex 15: Presentation of Study Team at the Kyoto Workshop 

Annex 16: Terms of Reference: Renewable Energy and Carbon Assignment for RDMU 

Annex 17: Terms of Reference: Legal Assignment/Grid Factor for RDMU 

vi

A C R O N Y M S 

AAU 

ACP 

BTL 

CDM 

CER 

CHP 

CMS 

COD 

COMESA 

CSP 

DNA 

DOE 

DS 

EB 

EBA 

EC 

EDM 

EE 

EIA 

ERU 

ETOH 

EU 

GDP 

GoS 

HDPE 

IEA 

IPCC 

IPPs 

JI 

Assigned Amount Units 

African Caribbean Pacific 

Biomass to Liquid 

Clean Development Mechanism 

Certified Emission Reduction 

Combined Heat and Power 

Content Management System 

Chemical Oxygen Demand 

Common Market for Eastern and Southern Africa 

Country Strategy Paper 

Designated National Authority 

Designated Operational Entity 

Dry Substance 

Executive Board 

Everything But Arms 

European Commission 

Electricidade de Mosambique 

Energy Efficiency 

Environmental Impact Assessment 

Emission Reduction Unit 

Ethanol 

European Union 

Gross Domestic Product 

Government of Swaziland 

High Density Polyethylene 

International Energy Agency 

Intergovernmental Panel on Climate Change 

Independent Power Producers 

Joint Implementation 

vii

LoA 

LoE 

M & O 

MEC 

MEDP 

MNRE 

NAS 

NCV 

PDD 

PIN 

PPO 

RDMU 

RETs 

RSSC 

SACU 

SADC 

SCGA 

SEA 

SEC 

SIPA 

SPV 

SSA 

SSMA 

STEM 

UNDP 

UNFCCC 

USA 

USD 

VHP Sugar 

WB 

Letter of Approval 

Letter of Endorsement 

Maintenance and operation 

Marketing Executive Committee 

Ministry of Economic Development and Planning 

Ministry of Natural Resources and Energy 

National Adaptation Strategy 

Net calorific value 

Project Design Document 

Project Identification Note 

Pure Plant Oil 

Restructuring and Diversification Management Unit 

Renewable Energy Technologies 

Royal Swaziland Sugar Corporation 

Southern African Customs Union 

Southern African Development Community 

Swaziland Cane Growers Association 

Swaziland Environmental Authority 

Swaziland Electricity Company 

Swaziland Investment Promotion Authority 

Special Project Vehicle 

Swaziland Sugar Association 

Swaziland Sugar Millers Association 

Short term energy market 

United Nations Development Programme 

United Nations Framework Convention on Climate Change 

United States of America 

United States Dollar 

Very High Polarization Sugar 

World Bank 

viii

L I S T O F U N I T S 

Btu 

British Thermal Unit 

ha 

hectare 

kV 

Kilo Volt 

J 

Joule 

GJ 

Giga Joule 

GW 

Giga Watt 

GWh 

Giga Watt hour 

MJ 

Mega Joule 

MW 

Mega Watt 

MWe 

Mega Watt electric 

MWh 

Mega Watt hour 

MWt 

Mega Watt thermal 

TJ 

Tera Joule 

t 

Tonnes 

tch 

Tonnes cane per hour 

°C degree Celsius 

Currencies 

E 

EUR 

USD 

Emalangeni (Swazi Currency) 

Euro 

United States Dollars 

1 Euro 11.5 Emalangeni 

1 USD 0.71 Euro 

ix

A C K N O W L E D G M E N T S 

The carbon team members would like to express sincere gratitude towards the Restructuring 

and Diversification Management Unit (RDMU) for giving them the opportunity to conduct this 

study and for all the support they received during their stay in Swaziland. 

Sincere appreciation to the Swazi Sugar Mill Companies, Ubombo, Sugar Limited, and the 

Royal Swaziland Sugar Cooperation (RSSC) for their cooperation and special thanks to 

Rainer Talanda and John Hulley, from Ubombo Sugar Limited and John-Mark Sithebe and 

Keith Ward from RSSC for their willingness to answer all questions forwarded to them during 

the field work. 

The team would also like to acknowledge the Energy Department under the Ministry of 

Natural Resources and Energy, many thanks to Henry Shongwe, Peterson Dlamini and 

Lindiwe Dlamini for their timeless support and willingness to provide them with information. 

Warm appreciation is awarded to the office of the Designated National Authority, Mr 

Emmanuel Dlamini and all other stakeholders who attended the Swaziland Kyoto Workshop. 

The carbon team would also like to thank Ms Khetsiwe Khumalo for her enduring support 

and valuable inputs in writing the report. 

x

E X E C U T I V E S U M M A R Y 

Energy expenses are already now by far the biggest cost factor of Swaziland’s sugar 

industry. Worldwide energy prices have increased in the past years and the Swaziland 

Electricity Company (SEC) estimates an increase of electricity prices of 20% in the next 

years for the consumers. Although the sugar mills produce large amounts of biomass 

residues (bagasse) which are completely used for own energy production at the mills, 

additional coal has to be imported and electricity for irrigation and housing must be bought 

from the national grid. This situation does not correspond to international standards. Sugar 

companies using state-of-the-art technology or having gone through modernization 

measures leading to reduced energy demand are nowadays in the position to rely only on 

their own fuel sources to fulfil their energy demand. The Swazi mills were constructed at a 

time when energy costs were low, and no significant energy-related investments have been 

done by now. The companies are aware o f their situation and have started to react. 

Initialized by the EC funded RDMU project this study aims at assessing the energy situation 

in the Swazi sugar industry and developing improved and innovative energy concepts. The 

goal of the “Energy and Carbon Assignment” is to provide support to enhancing the 

competitiveness of the Swazi sugar industry by identifying opportunities for reducing energy 

costs, and by proposing alternative energy concepts while making maximum use of new 

financing mechanisms from the Clean Development Mechanism (CDM) of the Kyoto 

Protocol. 

The sugar industry can to a great extent benefit from CDM co-funding for urgently required 

modernization and energy cost saving measures. There are three basic CDM project 

concepts that could be directly implemented by the three large sugar mills of the country: 

1. Energy Efficiency to Avoid Coal Input 

In general, all activities which lead to less energy consumption while providing the same level 

of energy service are comprised under the term energy efficiency. All three sugar mills in 

Swaziland provide a potential to improve the energy efficiency by reducing their steam and 

electricity demand and by optimizing the boilers. Following the implementation of such 

measures, the use of imported coal and emissions of GHG related to burning fossil coal can 

be avoided. 

2. Fuel Switch – Substituting Coal with Trash 

The project concept describes the switch from fossil-based energy to renewable energy 

generation. It is an alternative to the concept described above which in the end leads to 

identical results in terms of emission reductions of GHG through the avoidance of coal 

utilization. The basic idea of the project is to replace coal by burning so-called trash, a 

renewable and therefore carbon-neutral fuel. Cane trash comprises the tops and the leaves 

of green harvested cane and constitutes up to 40% of the total biomass of a sugar cane 

plant. 

Report on First Assignment Renewable Energy and Carbon Team 2008 - Page 1

3. Renewable Energy to the Grid 

The project concept deals with generating renewable electricity based on biomass which is 

fed into the national grid. The renewable energy option within the sugar industry is focused 

on biomass residues, namely trash. The basis for the calculation of emission reduction is 

given by the difference between the amount of emissions, which occurred by generating 

electricity provided by the grid, and any emissions resulting from the production of renewable 

electricity which is fed into the grid. The benefits arising from such a project are obvious: 

local renewable energy sources are used for domestic energy supply. It fosters the national 

goals to increase the renewable energy use and decreases emissions; it generates a new 

commodity as well as a new value chain, and Swaziland becomes less dependent on South 

African electricity imports. 

For Swazi sugar companies it makes the most sense from an economical as well as from an 

emission reduction point of view, to carry out first an energy efficiency project which is 

followed by a project dealing with usage of biomass residues for power production in order to 

avoid purchases of electricity, or with supplying domestically produced renewable energy to 

the grid. It has to be noted that any final decision will be taken by the companies, in which 

measures are going to be implemented! Both, RSSC and Ubombo, are willing to invest in 

energy efficiency as well as in renewable energy measures in their plants and are ready to 

cooperate with RDMU on this issue. 

Conclusions: 

The three sugar mills of the country are willing to invest in order to achieve higher 

energy efficiency, and intend to become more independent from imported energy 

sources in order to meet the upcoming challenges of rising energy costs in 

production. 

RSSC and Ubombo highly welcome the initiative and support of RDMU to assess the 

opportunity of co-financing such measures through emission reduction certificates 

from the CDM. 

Cooperation between RDMU and the sugar companies has started successfully and 

will continue during the next phase of the energy/carbon assignment. 

The utilisation of trash from the sugar industry, however, also has a national dimension. If all 

potential trash from the current 50,000 ha sugar cane fields was used for electricity 

generation, almost 70% of the electricity consumption in Swaziland could be covered. 

Currently, a minimum amount of 350,000 tonnes of trash would potentially be available per 

year. According to very conservative assumptions 700 GWh of electricity could be generated 

annually from burning trash. 

The out-growers sector of the Swazi sugar industry deserves special consideration when it 

comes to financial support provided by the EC project handled by RDMU on behalf of (and in 

cooperation with) the EC representative in the country. Investments aiming at an 

improvement of the out-grower’s situation could be eligible for financial support by the EC 


programme. 30% of the available trash is produced on out-grower’s areas. An involvement of 

the out-growers in the plans of the sugar mills to produce energy from trash would be 

desirable as it opens up new income generating activities for this sector. Sugar companies 

and out-growers could set up a “special project vehicle (SPV)” for implementing a CDM bioenergy 

project. While private companies join the SPV by providing equity, out-growers could 

be financially supported by EC funds to finance the necessary investments. The SPV would 

own and operate the plant. Out-growers provide additional trash, thus increasing the capacity 

of the plant, and in return they profit from cash or free of cost energy deliveries. Even a 

stand-alone investment in energy production based on biomass residues done by the outgrowers 

could be an interesting project setup. In case such a project would receive financial 

support from the EC, complementary financing could be provided through the CDM 

mechanism. 

The concept of generating electricity from biomass can also be replicated outside of the 

sugar industry. Even the large-scale production of plant oil as an alternative to growing sugar 

cane and as a fuel source for domestic electricity production can be considered. 

Conclusions: 

CDM bio-energy projects with the objective of generating energy from sugar cane 

trash seem to provide an opportunity for supporting the out-growers sector. 

There are options for designing a project setup which is based on financial support 

from the EC supplemented by carbon financing. 

The design of such a project will be one of the most important tasks of the upcoming 

phase of the energy/carbon assignment. 

Energy related payments including costs of imported fuels used in the transport sector play 

an important role in the sugar industry and on national level. There is a large potential for biofuels 

in Swaziland which in principle consequently provides an opportunity to obtain cofinancing 

from carbon revenues by setting up respective projects as climate projects under 

the CDM. This refers to the production of plant oil to be used as a substitute for diesel fuel, or 

to the production of ethanol used for blending with fossil petrol. 

There are various opportunities such as energy reduction measures in the irrigation sector or 

energy efficiency measures in the housing sector of the sugar industry. All of them can be 

implemented and lead to a reduction of energy cost, or open up new business opportunities 

for participants of the sugar industry. Therefore, the project opportunities deserve the 

attention of RDMU. 

From a carbon point of view these projects would be too small in terms of emission reduction 

certificates generated. The number and value of certificates does not correspond to the 

transaction costs required for the development and operation of a CDM project. Some of the 

project ideas presented such as energy efficiency in the lighting sector may start in the sugar 

industry and could be expanded to national scale. This is possible by designing such projects 

as CDM Programmes of Activity (PoAs). 


Nevertheless, it proved during the first phase of the assignment that there is a considerable 

common interest in CDM projects in the country. Especially members of the government 

were eager to receive detailed information on the opportunities offered by the new financing 

mechanism. 

Knowledge relating to the CDM Kyoto mechanism in Swaziland is still not widespread. The 

required national authority for approving CDM projects is formally in place, however, not fully 

operational yet. By now no single CDM project has officially been registered, nor is any CDM 

project up and running. Three projects are now under various stages of implementation. One 

of them, a project at Ubombo sugar mill has been identified in the course of the assignment, 

while another one at the RSSC sugar mill is already in an advanced stage of development. 

The Project Design Document (PDD) of this project is currently under validation. One project 

outside of the sugar sector dealing with the use of renewable energy has already been 

described in a PIN. 

Almost all opportunities for CDM projects in Swaziland – inside as well as outside of the 

sugar industry – depend on finding a solution for the “National Grid Factor Problem”. The 

Swazi electricity grid is an integral part of the regional SADC grid which mainly depends on 

energy producing facilities in the Republic of South Africa and on some large hydro-power 

plants in some of the neighbouring countries. About 80% of the electricity consumed in 

Swaziland has to be imported from other countries connected to this regional grid, mainly 

from RSA. Most of the electricity produced within this grid is based on fossil energy sources, 

mainly coal, and therefore leads to high GHG emissions. 

Unfortunately, according to the methodological tool for calculating emission factor for an 

electricity system, “for imports from connected electricity systems located in another host 

country/countries, the emission factor is 0 tons CO2 per MWh.” This means even though the 

electricity used in Swaziland is mainly based on fossil fuels the emissions of these fuels 

cannot be attributed to Swaziland. The electricity generated in Swaziland is mainly hydrobased 

which means that its origin is already a renewable source; hence the grid emission 

factor for Swaziland becomes zero. 

This effectively means that all CDM project concepts dealing with opportunities for using 

renewable energy with the objective to replace energy taken from the grid, or feed renewable 

energy to the grid could not claim any emission reduction certificates. The problem was 

pointed out and discussed with all relevant stakeholders in Swaziland during the mission. It 

was agreed that RDMU will try to assist in solving this problem. 

The table below shows a brief cost and benefit summary of the key projects that were 

identified by the team and considered to be eligible for CDM. These projects are discussed in 

more details in chapter four. 


Table 0.1 Projects Summary Cost and Benefits 

Projects 

Investment 

Costs 1 

(Euro) 

CDM 

transaction 

costs 

(Euro) 

Emission 

Reduction 

per annum 

(t CO2e) 

CER Revenue 

per annum 

(Euro) 

Energy Cost 

Saving 2 per 

annum 

(Euro) 

Revenue from 

Electricity 

Sales per 

annum 

(Euro) 

IRR in % 

with 

CDM 

without 

13.05 

- 

Energy Efficiency to Avoid Coal Input 15,000,000 244,530 63,900 639,000 2,400,000 

8.7 

Fuel Switch from Coal to Trash 36,541,389 141,560 98,800 988,000 3,640,000 

- 23 

0.18 

Renewable Energy to the Grid with 

CHP (use of trash in the sugar 

industry) 

10,234,797 141,560 17,280 172,800 - 1,200,000 

9.97 

5.63 

Renewable Energy to the Grid 

(Use of biomass residues – Peak 

Timbers) 

7,492,661 63,504 12,403 235,118 382,609 101,304 

25 

- 8 

1 These costs include estimated investment cost, and project running cost (O&M). 

2 Cost avoided due to energy saving 


Conclusions: 

In case the “National Grid Factor Problem” cannot be solved, only projects that avoid 

a further utilization of coal will qualify as CDM projects. 

In case a project of sufficient size in terms of emission reductions will be identified 

dealing with fuel switch in the domestic and regional transport sector, the project 

would also be eligible for the production of CERs. 

For all other potential projects in the sugar industry as well as for almost all projects 

on national scale seeking for co-financing opportunities through the CDM, it is 

mandatory to solve the grid problem. 

A solution can only be identified by a special expert experienced in legal issues 

related to the Kyoto process. Financial support by RDMU to finance such an 

assignment would be highly appreciated by all stakeholders. 

The second phase of the assignment will therefore mainly focus on three objectives: 

Development of two PDDs; 

Identification of a project setup in the out-growers sector; 

Capacity building of the DNA. 


1 I N T R O D U C T I O N 

The production and milling of sugar cane is one of the largest industrial sectors in Swaziland, 

accounting for approximately two thirds of the value of agricultural production. The Swazi 

sugar industry can be regarded as a real success story in terms of growth and productivity. In 

the past sugar cane growing was predominantly undertaken by large estates. However, more 

and more medium and small-scale farmers have joined the sector over the last decade. This 

can be attributed to the lucrative economies of sugar cane growing as opposed to other 

sectors. The entry of these new medium and small-scale farmers caused a significant 

expansion of the sector as land under irrigated sugar cane cultivation increased from 38,000 

ha in 1996 to over 50,000 ha in 2006. In 2006, the three sugar mills with a turnover of almost 

200 million Euro produced more than 600,000 tonnes of sugar, and Swaziland sold over 

150,000 tonnes of raw sugar to the EU market. However, the recent development within the 

EU sugar market has come to challenge this scenario by threatening the competitiveness 

and sustainability of the industry. 

When the EU reformed its sugar market and phased out its quotas in 2006 the sugar prices 

obtainable in the EU were expected to lower by a cumulative 36 % within the following four 

years. This would mean a decrease in Swaziland’s annual revenues from sugar export by 

22%. In order to minimise the negative effects of the situation the Government of Swaziland 

has launched a National Adaptation Strategy (NAS). The key objective of the NAS is to 

develop a proactive strategy as a response to the EU sugar sector reform, and to minimise 

the adverse effects on the Swazi sugar industry and the wider national economy. The 

financial requirements for implementing this strategy are estimated at 366 million Euro. The 

Restructuring and Diversification Management Unit (RDMU) has been created to support the 

restructuring needs of the sugar sector on behalf of the EC, whilst ensuring that a 

programme of continuous productivity and efficiency improvement is implemented. 

The NAS has identified energy as an important factor, as energy costs increased 

dramatically over the last years. Therefore, one of the objectives mentioned in the NAS is to 

reduce the negative effects of the reform by enhancing the energy efficiency and the 

profitability of the sugar sector along the value chain with regard to energy aspects. 

On behalf of the EU, RDMU commissioned GFA ENVEST to assess the energy situation in 

the Swazi sugar industry and to develop improved and innovative energy concepts. The goal 

of the “Energy and Carbon Assignment” is to provide support to enhancing the 

competitiveness of the Swazi sugar industry by identifying opportunities for reducing energy 

costs and by proposing alternative energy concepts while making maximum use of new 

financing mechanisms from the Clean Development Mechanism (CDM) of the Kyoto 

Protocol. 

The assignment is divided into two phases: 

an assessment phase and 

a development phase. 

The main activities of the first phase were data collection and assessment of opportunities for 

cost savings in the energy sector within the sugar industry as well as on the national level. 


Building on the outcome the second phase will develop bankable and implementable projects 

with an assessment of co-funding through revenues of carbon certificates under the CDM. 

This report presents the results and findings of the first assessment phase providing an 

overview of the current energy balance of the sugar industry. Project opportunities were 

identified and are described in this report, which also outlines the terms of the second phase 

in order to further develop identified projects. 

The following chapter provides information on the current status of the Swazi sugar industry 

and describes the framework of the “Energy and Carbon Assignment”. 

1 . 1 S u g a r S e c t o r o f S w a z i l a n d 

According to the National Adaptation Strategy of Swaziland the sugar sector is the backbone 

of the economy of Swaziland accounting for about 18% of the GDP, 59% of the overall 

agricultural output and 35% of the agricultural wage employment. 

Sugar production in Swaziland mainly takes place in the Lowveld region. Currently, the sugar 

industry consists of four components: miller-cum-planters and estates (77% of production), 

large growers (17%), medium-sized growers (5%) and small growers (1%). While 

accounting for a smaller volume of total production, the largest number of growers falls under 

the category of medium and small growers. The total area under sugarcane is approximately 

52,000 hectares with a total annual sugar production of approximately 640,000 tonnes. 

There are three sugar mills in the country: Simunye Mill and Mhlume mill, both operated by 

the Royal Swaziland Sugar Corporation (RSSC), and the Ubombo Sugar mill in Big Bend, 

operated by Illovo. 

The Royal Swaziland Sugar Corporation Limited – RSSC 

The Royal Swaziland Sugar Corporation Limited (RSSC) operates two of the three sugar 

mills, Mhlume Sugar Mill built in 1960 and Simunye Sugar mill built in 1980. RSSC is located 

in the north-eastern lowveld and is one of the largest companies in Swaziland, employing 

more than 3,000 people (including seasonal workers) and producing two-thirds of the 

country’s sugar. Listed at the Swaziland stock exchange, RSSC is owned by several hundred 

shareholders, the majority shareholder being Tibiyo Taka Ngwane with 53.1%, followed by 

Tsb Sugar International (Proprietary) Limited with 26.2%. Other shareholders include the 

Swaziland Government, the Nigerian Government, Coca-Cola Export Corporation Limited 

and Booker Tate Limited. 

According to the Swaziland Sugar Association (SSA), RSSC manages approximately 13,300 

hectares of irrigated sugar cane on the two estates Simunye and Mhlume that are leased 

from the Swazi nation. Out growers crop further 18,000 ha irrigated sugar cane fields and 

supply RSSC. Mhlume processes approx. 1.2 million tonnes of cane and produces 185,000 

tonnes of sugar per year, whereas Simunye sugar mill processes 1.8 million tonnes of cane 

and produces 260,000 tonnes of sugar. Currently the two mills Mhlume and Simunye crush 

cane at a combined throughput of 700 tonnes per hour, producing approximately 430,000 


tonnes of sugar (96 o Pol) per season. RSSC also operates a sugar refinery situated at the 

Mhlume mill, which produces 150,000 tonnes of refined sugar, and a 32 million litre capacity 

ethanol plant, which is situated adjacent to the Simunye mill. 

Ubombo Sugar Limited 

The Ubombo sugar mill was built in 1965 and is the oldest sugar plant in Swaziland. Ubombo 

Sugar Limited, a part of the Illovo Sugar Group of South Africa, operates the sugar mill, 

holding a share of 60% while the remaining shares are held by Tibiyo Taka Ngwane on 

behalf of the Swazi nation. The Ubombo sugar mill is situated at the town of Big Bend, in the 

Southeast of the country and annually processes about 1,840,000 tonnes of cane and 

produces approx. 220,000 tonnes of sugar. Production at this mill constitutes about 35% of 

the country’s total output. The company manages roughly 7,600 hectares of irrigated sugar 

cane. Other sugar cane farmers supply Ubombo with around 1 million tonnes of sugar cane 

cropped on 12,000 ha irrigated land. Ubombo presently refines around 85,400 tonnes of raw 

sugar per year. Molasses produced at Ubombo is sold primarily to USA Distillers. 

The operations of the Swaziland sugar industry are regulated by the Swaziland Sugar 

Association (SSA). This means that all the sugar produced in Swaziland is owned by SSA. 

Sugar sales are handled by the Commercial Department of SSA following the decisions 

made by the Marketing Executive Committee (MEC) of the sugar industry (Further 

information on the Swazi Sugar market is given in chapter 2.3.2). The following figure 1.1 

shows the major sugarcane production areas in Swaziland: 

The successful development of the sugar industry in Swaziland during the last years can be 

partially accounted to its access to protected and preferential markets. In the 1960s 

Swaziland took over South Africa’s Commonwealth quota, and it enjoys access to SACU (for 

further information please refer to chapter 2.3). 

However, the EU has reformed its internal sugar market regime resulting in lowering of prices 

obtainable in the EU by a cumulative 36% over four years (starting in 2006), as EU quotas 

are phased out. As a consequence, the prices that growers and millers obtain are estimated 

to drop by about 20%, and annual revenues will decline by 22 million Euro over the four 

years. With all other factors remaining constant, in 2010, the sucrose price will have dropped 

by 270 Euro per tonne compared to 2005. 

The higher quota prices had the effect of concealing factors that compromised the 

competitiveness of local producers: high personnel costs, and the productivity and efficiency 

of smallholder cane supply. 


Figure 1.1: Main Sugarcane Production Locations in Swaziland 

ONLY TH REE M ILLS 

N 

M hlum e 

KDDP*** 

Vuvulane 

M buluzi Sim unye 

M BABAN E 

M anzini 

M alkerns 

Sidvokodvo 

Big Bend 

Siphophaneni 

Sugar mills 

Sugar estates** 

Small and medium size growers 

Title deed land 

Smallholders 

Swazi Nation Land 

LU SIP*** 

N soko 

Source: TechnoServe, 2007 

The mills and the larger producers have responded to the competitive shock by cutting 

overheads and trying to increase their efficiency. The mills and large estates retrenched over 

40% of their workforce, and began to outsource services. The industry is also seeking 

significant cost savings by scaling back the level of social welfare, which it traditionally 

offered to its workforce due to the remote geographical location: free or highly subsidized 

access to education, health, housing and social facilities. These cutbacks occur in a situation 

where the state or other providers are not yet in a position to take over. 

The large commercial growers have high yields (up to 120 tonnes/ha) and have amortised 

their investment in irrigation equipment. Therefore, they can withstand while seeking to 

improve their efficiency. In contrast, smallholder sugar cane producers, particularly new 

entrants, are hardly prepared to respond to lower prices: they are facing high levels of debts, 

and their productivity is low (less than 100 tonnes/ha). Many commercial cane farmers are 

also of the opinion that lower prices, at a time when costs for transport and energy are rising, 

threaten their future in the sugar cane production. 


1 . 2 N a t i o n a l S u g a r B a l a n c e 

In 2006/07, the area under cane was 52,233 ha, while in 2007/08 it was only 50,864 ha. This 

shows a decline of 2.6%, and in the same period the area harvested declined by 4.1%. 

However, the total cane production increased by 2.7% due to a significant increase of 7.1% 

in cane yields. Presently, the industry has about 500 small scale sugarcane growers, who 

were virtually non-existent in the early 1990s. 

In 2006, large-scale farmers comprising RSSC, Ubombo, Tambankulu Estate, Tibiyo Taka 

Ngwane and Crookes Plantation managed and harvested 34,951 ha of sugar cane fields 

which correspond to 70% of all sugar fields in Swaziland. Farmers who own 50 ha up to 800 

ha are classified as medium farmers. These farmers managed 23% of the sugar cane fields 

(11,684.82 ha) under operation. Most of the out-growers are classified as small-scale 

farmers with less than 50 ha. They cultivated 3,678.65 ha of sugar cane which accounts for 

7% of the total area of harvested sugar cane fields in 2006. Hence, out-growers manage 

30% of sugar cane fields in Swaziland. 

The annual average cane production is estimated at 5,017,756 tonnes with an average cane 

yield of 101.05 tonnes/ha between the years 2003/4 and 2007/8. The table below shows the 

sugar cane production between 2006/7 and 2007/8 plus estimates for the season 2008/2009. 

Table 1.1: Sugar Cane Production in Swaziland 2006/07 – 2008/09 

2006/7 2007/8 2008/9 (Estimate) 

Area under cane (in ha) 52,233 50,864 52,071 

Area harvested (in ha) 50,315 48,321 50,260 

Total cane production (in tonnes) 4,930,938 5,062,880 5,100,456 

Sucrose content (% cane) 14.43 14.28 14.5 

Cane yield (tonnes/area harvested) 97.84 104.78 101.9 

Source: www.ssa.co.sz 

The current daily crushing capacities of the three sugar mills in the country account for 9,000 

tonnes (Simunye), 7,000 tonnes (Mhlume) and 9,000 tonnes (Ubombo) of cane, 

respectively. All three factories produce raw and VHP (brown) sugar, while Ubombo and 

Mhlume manufacture refined sugar as well. 

The table below shows the total sugar produced by the three mills, distributed in 2007/08 and 

2008/09 (estimates), as follows: 


Table 1.2: Sugar Mills and Sugar Production Swaziland 2006/07 -2008/09 

Producer 2006/07 2007/08 2008/09 (Estimates) 

Simunye Mill 236,375 tonnes 244,305 tonnes 229,562 tonnes 

Mhlume Mill 167,520 tonnes 165,311 tonnes 185,791 tonnes 

Ubombo Mill 219,462 tonnes 221,620 tonnes 224,641 tonnes 

Total Industry 623,357 tonnes 631,236 tonnes 639,994 tonnes 


Molasses is a by-product of the sugar production process. It is produced at all three mills. 

The average annual molasses production is approximately 190,000 tonnes. The molasses 

production by the three mills in 2007/08, including the estimated production for 2008/09, is 

outlined in the table below. The two main distillers, USA Distillers and RSSC Distillers, use 

most of the molasses for the production of potable alcohol. The rest (less than 1%) is sold to 

small local and foreign customers who use it as an input for food production as well as for 

animal feed. 

Table 1.3: Molasses Production in Swaziland 

Producer 2006/07 2007/08 2008/09 (Estimates) 

Simunye Mill 62,807 tonnes 66,404 tonnes 62,823 tonnes 

Mhlume Mill 47,274 tonnes 49,900 tonnes 53,319 tonnes 

Ubombo Mill 78,235 tonnes 78,235 tonnes 79,296 tonnes 

Total Industry 188,316 tonnes 188,316 tonnes 195,438 tonnes 



1 . 3 N a t i o n a l A d a p t a t i o n S t r a t e g y 

As a response to the EU sugar sector reforms, the Government of Swaziland (GoS) 

elaborated a National Adaptation Strategy (NAS). The key objective of the NAS is to develop 

a proactive strategy as a response to the EU sugar sector reform and to minimise the 

adverse effects on the Swazi sugar industry and the wider national economy. 

In order to mitigate the negative impact the withdrawal of quotas and preferential prices 

would have, the EU pledged to support affected countries in their adaptation process, in 

particular those dependent on the EU market, through the Sugar Protocol provisions of the 

Cotonou Agreement. Swaziland qualified for this support. 

To meet the EU’s requirement for a comprehensive strategy as a condition for support, and 

to ensure the continued viability of the sugar industry, Swaziland prepared its National 

Adaptation Strategy in 2007. The financial requirements for implementing this strategy are 

estimated at 366 million Euro, or about 2.6 billion E. The Restructuring and Diversification 

Management Unit (RDMU) has been created to support the restructuring needs of the sugar 

sector on behalf of the EC, whilst ensuring that a programme of continuous productivity and 

efficiency improvement is implemented. 

The NAS identified actions in eight thematic areas. One of these areas is the “Diversification 

within and outside the sugar industry”. The area’s objectives are to explore the potentials of 

co-generation of electric energy, to strengthen the value chains for alternative crops, to 

reduce costs through the provision of transport infrastructure and to provide a budget of 

109,760,000 Euro for implementing respective measures. Part of the priority issues within the 

area of the “diversification within and outside the sugar industry” is focused on energy. 

The NAS identified energy as an important factor as costs have dramatically increased 

over the past years and the sugar mills need to implement energy efficiency measures. 

Furthermore, the sugar industry is the biggest energy consumer in Swaziland. Hence, the 

overall objective of the Energy/Carbon assignment on behalf of RDMU is to identify 

innovative measures needed to enhance the efficiency and hence the profitability of the 

sugar sector along the value chain, from the smallholder sugar cane growers via the 

transporters to the millers. 

The specific activities undertaken by the Energy/Carbon team involve data collection and 

assessment of opportunities for cost savings in the energy sector including energy efficiency 

measures and the use of local renewable energy sources. The aim is to identify and develop 

bankable and implementable projects in combination with an assessment of co-funding 

through revenues of carbon certificates by implementing them as CDM projects. 


1 . 4 T e r m s o f R e f e r e n c e f o r E n e r g y / C a r b o n S t u d y 

The specific objectives of this consultancy 

are the assessment and data collection in 

Swaziland, the presentation of results and 

recommendations and the development of 

a sustainable energy concept, Project Idea 

Notes (PIN), Project Design Documents 

(PDD). 

The study should be carried out in two 

consecutive parts described alongside. 

This report provides the results of the work 

done in phase 1. First results have been 

provided to local stakeholders in Swaziland 

at a workshop during the mission (please 

refer to annex 14: List of participants of 

Kyoto workshop and annex 15: 

presentation of first results). 

There was an overwhelming interest of 

national authorities in CDM opportunities 

also outside of the sugar industry. 

Therefore, on a limited scale, the report 

also describes co-financing opportunities 

for energy efficiency or renewable energy 

projects which are either not or only 

indirectly related to the national sugar 

industry. 

As agreed with RDMU during the mission 

to Swaziland slight modifications of the 

individual tasks were done. Partly, even 

tasks of phase 2 already were 

accomplished such as the development of 

PINs (please refer to annex 11 and annex 

12). Reasons for overlaps or adjustments 

were given and these were mainly due to 

time constraints. 

It proved that the team arrived in a situation 

were the sugar companies already started 

first measures to scope with rising energy 

expenses. RSSC had just started with 

setting up the first CDM project, whereas 

Ubombo had already basically agreed on 

1. Phase: Assessment and data collection in 

Swaziland 

The objective is to assess and analyse the local 

experience, the relevant markets and conditions for 

sugar production and processing, available 

residues, use of biomass and the generation of 

bio-energy including future options such as the 

production of biofuels (bioethanol). 

The main findings and recommendations will be 

presented to main stakeholders and decision 

makers in Swaziland. The final results will be 

provided in a study report written in English, and 

outlining the current state, options and challenges 

of renewable energy generation in the sugar sector 

of Swaziland. 

Based on the outcomes of the first phase the terms 

of reference and the time schedule for the second 

phase will be defined by the project team. 

2. Phase: Development of an energy concept, 

and CDM cycle (PIN, PDD, validation, 

monitoring training, support in monitoring 

report and first verification) 

The objective of the energy concept is to provide a 

sustainable energy concept for the sugar sector in 

Swaziland based on a synthesis of analysed 

collected data (conditions) as well as current and 

future energy demand (including stakeholder 

participation). 

The option of CO2 certificates generation will be 

evaluated and developed in order to provide cofinancing 

for investment costs, costs for 

maintenance, and post-project activities. Activities 

regarding the CDM cycle cover: 

i) Development of Project Idea Notes (PINs) of 

potential CDM projects, 

ii) Development of Project Design Documents 

(PDDs) of projects which will be implemented 

iii) Including a training on how to monitor the GHG 

reduction, 

iv) Support during the validation and registration 

process, 

v) Support of the first verification process 

including the preparation of the first monitoring 

report. 

an investment and modernization programme, however, without taking into account CDM cofinancing 

opportunities. 


The timing of the mission therefore proved to be optimal, as in the case of RSSC there is still 

time to improve the current suboptimal project design. Especially, however, for Ubombo the 

arrival of the team happened just in time to set up the intended technical measures as CDM 

projects. 

In order not to risk the additionality of the CDM project, the process of formal registration as a 

climate project has to be started before the actual implementation of the first modernization 

measures. Therefore, one primary focus of the work during phase 1 was the cooperation with 

the big sugar companies. 

Nevertheless, also potential project opportunities related to the out-grower sector were 

identified an assessed. This sector is of specific interest for RDMU as it qualifies for 

investment projects that could receive financial support from the EC project and as well 

attract supplementary financial means from other sides through the CDM. 

Due to this specific characteristic this sector as well as related project opportunities should 

receive a more detailed assessment during the second part, while the first part had focused 

more on the companies. 

Some of the very detailed information requirements defined cannot be fulfilled. RDMU and 

the consultants had to sign a non disclosure agreement with one of the companies that 

prohibits the public dissemination of confidential information. 

All information received from this company on harvesting, handling or transporting of trash 

fall under this restriction. The information has led the study team to the understanding that 

biomass energy projects are technically and financially feasible. The terms of reference for 

the first assignment are attached to this report as annex 16. 


2 E N E R G Y B A L A N C E A N D L E G A L 

F R A M E W O R K O F S W A Z I L A N D 

This chapter gives an overview of the current energy situation in Swaziland, paying mainly 

attention to supply and demand. Energy balances provided for the sugar industry focus 

mainly on the three sugar mills. 

Furthermore, the chapter gives a summary of the political and legal framework within the 

energy sector as well as within the sugar industry. The aim is to give a background overview 

of the available supporting policies, strategies and the relevant institutions. To demonstrate 

the impact of energy prices on sugar production the energy and sugar price trends are 

reviewed in this chapter. 

Some important facts: 

60% of energy comes from biomass, 

80% of the electricity is imported, mainly from South Africa. 

All petroleum products are imported. 

Swaziland export anthracite coal (which is domestically mined), and imports 

bituminous coal for consumption from South Africa 

Due to the worldwide energy prices increase Swaziland Electricity Company (SEC) 

estimates an increase of electricity prices of 20% in the next years. The country may 

face a serious energy deficit in the near future. 

2 . 1 C u r r e n t N a t i o n a l E n e r g y B a l a n c e 

Swaziland’s own potential for energy generation is based on coal reserves and hydropower. 

The coal reserves mainly consist of anthracite coal of which the largest part is exported for 

industrial utilization to South Africa due to its high energy content. However, Swaziland 

imports all petroleum products, approx. 80% of its electricity and 100% of bituminous coal 

needs, of which almost 100% are again imported from the Republic of South Africa. Figure 

2.1 below gives an overview of the primary energy supply. The figure illustrates that on 

average the main energy source is biomass (59%), followed by petroleum products (19%), 

coal (14%) and electricity (8%) 3 . In 2007, the total energy consumption was around 41,000 

TJ. 

3 Energy balances of Swaziland of 2006 and 2007 are not available. The estimation is based on import and 

export data on petroleum products, coal, amount of bagasse and sold electricity. The amount of wood fuel is 

an estimation, a wood fuel consumption of 600,000 m3 is assumed. 


Figure 2.1: Primary Energy Sources, Swaziland 2007 

Electricity 

8% 

Wood fuel 

22% 

Coal 

14% 

Diesel 

9% 

Bagasse 

37% 

Petrol 

9% 

Paraffin 

1% 

Source: Ministry of Finance, Customs Department, Swaziland Electricity Board: Annual Report 

2006-2007, 2007, Ministry of Natural Resources and Energy: Swaziland Energy Statistical Bulletin 

2001-2003; 2003; Ministry of Natural Resources and Energy: National Energy Policy (September 

2003); SADC Energy Year Book 2004-2005. 

Biomass 

Biomass used in Swaziland includes bagasse (1,373,504 tonnes), wood fuel and wood waste 

(600,000 m3). Bagasse is a waste product of the sugar industry in Swaziland and gives the 

largest contribution to the energy supply with approx. 15,000 TJ and 36% of the total annual 

energy consumption, respectively. It is used by the sugar industry for electricity and steam 

generation. The electricity is used in the sugar plants and also distributed to surrounding 

company towns. However, no electricity is sold to the national grid due to the lack of 

incentives. Low efficiency conversion techniques are presently used. The wood fuel mainly 

comes from indigenous forests, Savannah woodlands and from forest plantations. The wood 

fuel is consumed in households, and the wood od waste from forest plantations is used by 

timber and pulp industries for electricity and heat generation 4 . 

Coal 

Most coal burning appliances and equipment used in Swaziland (both domestic and 

industrial) are designed to use bituminous coal, and cannot use domestic anthracite and 

semi-anthracite coal. The bituminous coal is imported from South Africa, and in 2007 the 

imported quantity amounted to 232,467 tonnes with a calorific value of 5,811 TJ. 

Petroleum products 

All petroleum products including diesel, gasoline and paraffin are imported from the Durban 

refinery by five international oil companies and are mainly used in the transport sector. In 

total energy consumption petroleum products compromise 7,857TJ (14% of total annual 

energy consumption). 

4 It was not possible to collect data on wood fuel consumption in Swaziland. 


Electricity 

Electricity production, imports and sales in Swaziland are in the responsibility of SEC (the 

role and structure of SEC will be described in more details in the chapter 2.4.1.2). About 80% 

of the electricity sold by the Swaziland Electricity Company (SEC) is imported from Eskom in 

South Africa which is mostly coal-based. The rest is produced by SEC through hydro power 

plants. In 2007 SEC sold 943.5 GWh of electricity to 4 main sectors: industry (44%), 

agriculture (19%) (mostly used for irrigation), commercial mercial (11%) and domestic (26%). The 

figure below shows electricity consumption by the different sectors in Swaziland for the year 

2007. 

Figure 2.2: Electricity Consumption by Sectors in Swaziland, 2007 

11% 

26% 

19% 

44% 

Industry 

Agriculture 

Commercial 

Domestic 

Source: Swaziland Electricity Board: Annual Report 2006-2007, 2007, Ministry of Natural Resources and 

Energy: Swaziland Energy Statistical Bulletin 2001-2003; 2003; Ministry of Natural Resources and Energy: 

National Energy Policy (September 2003); SADC Energy Year Book 2004-2005. 

SEC electricity production is generated from 4 hydro power stations and one diesel generator 

with a total installed capacity of 50.6 MWe. Table 2.1 below shows the current installed 

energy generation capacity in Swaziland. 

Table 2.1: Installed Energy Generation Capacity in Swaziland 

Power plant 

Ezulwini hydro power station 

Edwaleni hydro power station 

Edwaleni diesel generation 

Maguduza hydro power station 

Mbabane hydro power station 

Installed capacity 

20 MW 

15 MW 

9.5 MW 

5.6 MW 

0.5 MW 

Established in year 

1985 

10 MW in 1963; 

5 MW in 1968 

1963 

1969 

1953 

Source: Swaziland Electricity Board: Annual Report 2006-2007. 


2 . 1 . 1 E n e r g y I m p o r t s a n d E x p o r t s 

The total amount of biomass used for energy generation comes from indigenous products. 

The biggest consumers of biomass are the sugar industry with the consumption of bagasse, 

and the timber and paper industry. Additionally, private households use wood fuel for cooking 

and heating purposes. 

Petroleum products are 100% imported from the refinery in Durban. At present, petrol 

consumption in Swaziland is 112 million litres per year, total consumption of diesel is 109 

million litres, and that of paraffin is about 9 million litres. 

The situation regarding coal and electricity is more complex. Hence, a short description on it 

is provided in the following paragraphs. 

Coal 

Coal is the only naturally occurring fossil fuel in the country. Coal reserves amount to 207.6 

million tonnes, defined as “run-of-mine” reserves. The potential reserves are estimated to be 

at least 1 billion tonnes. The Maloma Colliery is producing anthracite coal, which is a highquality 

coal with low ash and high carbon content but is also of low volatility. It has low 

sulphur content which makes it more environmentally benign. Because of its high quality it 

achieves much higher prices in the international coal markets than bituminous coal from 

South Africa. For this reason it is not sold locally but exported to be used in the metallurgical 

industry. Any coal consumed in Swaziland is bituminous coal from South Africa and for more 

than ten years the imports account for around 200,000 tonnes per year. 

Table 2.2: Import and Export of Coal, Swaziland 

2003 2004 2005 2006 2007 

Import coal in t 266,084 252,380 203,469 179,955 232,467 

Export coal in t 148,549 154,474 75,563 426,283 986,745 5 

Source: Ministry of Finance, Customs Department 

Electricity 

The commercial supply of electricity through the national grid is under the responsibility of 

the government-owned SEC. The table below shows the total electricity sold and its origin of 

generation (losses are not separately mentioned). The imported electricity from Eskom, 

South Africa is based on 88% coal, 5% nuclear and 7% hydro power; whereas electricity 

from EDM, Mozambique is based on 96% hydro power and 4% fossil fuels (diesel, natural 

gas and coal). In 2007, Swaziland imported 76% of its electricity from Eskom; 8.5% was 

purchased from STEM and EDM while the remaining 15.5% were generated in Swaziland. 

5 The Ministries of Finance and Energy could not give sufficient reasons for the high increase in coal production 

during the last years. 


Table 2.3: Electricity Generation and Imports, Swaziland 2004 – 2007 

2004 2005 2006 2007 

Imported power Eskom – GWh 765.2 768.7 774.2 841.5 

Imported power STEM & EDM – GWh 151.6 150.3 119.8 93.7 

Local generation – GWh 103.5 159.5 155.5 171.1 

Total Electricity Sales (GWh) 852.8 855.9 855.8 943.5 

Average selling price (cents E) 42 44.9 46.3 47.4 

Source: Swaziland Electricity Board: Annual Report 2006-2007. 

Prior to 2000, electricity was imported from South Africa through three 132 kV lines with a 

total capacity of 96 MW. Subsequently, a 400 kV transmission line between Mozambique 

and South Africa via Swaziland has been established, adding 250 MW to the capacity 6 . 

2 . 1 . 2 F u t u r e I m p a c t s a n d t h e D e v e l o p m e n t o f 

I n t e r n a t i o n a l E n e r g y M a r k e t s 

Between 2004 and 2007 electricity consumption increased by over 10% in Swaziland. The 

rise in electricity demand was a result of the further electrification of rural areas. During the 

same time period Swaziland purchased additional electricity from Mozambique and from the 

STEM, since South Africa is facing an energy supply crisis due to its increased own demand 

and its inadequate capacities. 

SEC forecasts high deficits in its electricity supply: However, the construction of the new 20 

MW Maguga hydro dam was finalised in May 2007 7 . SEC is undertaking a feasibility study on 

a new 1 GW coal-fired power station. This year the first part of the study was finalised with a 

positive estimation. The goal is to capitalise Swaziland’s own quantities of coal for energy 

generation with a potential export of energy in case of excess quantity. 8 

According to demand forecasts for 2015 done by MNRE the consumption of petrol will arrive 

at about 183 million litres and that of diesel at about 170 million litres in Swaziland. The 

6 The 400 kV transmission line was built with the intention of supplying power from Eskom to an aluminium 

smelter in Maputo, it also contributes to Swaziland’s energy supply. (Source: Ministry of Natural Resources 

and Energy: National Energy Policy (September 2003)). Additionally, SEC maintenances a 132 kV (329 km) 

transmission line, a 66 kV (828 km) transmission line from the Maguga dam which is under construction; and 

6766 km of an 11kV distribution line to provide and supply energy in the country. 

7 In August 2003, the SEC and the European Investment Bank signed a $9.3 million loan agreement for the 

construction of a hydroelectric power station at the Maguga dam on the Komati River. In November 2004, 

Alston Power and Consolidated Power Ltd. signed contracts with the SEC to supply and install turbines and 

generators, as well as to construct and commission substations for the Maguga power project. The Maguga 

project is part of the Swazi government's plan to reduce the importation of electricity. 

8 The idea to use the large coal reserve for own energy generation was already considered in 1987, as it is 

already mentioned in the UNDP/WB report 1987: Swaziland: Issues and Options in the Energy Sector. 

However, the frame conditions regarding energy supply, energy security and prices changed a lot, so it 

became more profitable to undertake such investments. 


consumption of paraffin has remained reasonably constant over the last 10 years and is 

therefore expected to remain at present levels for the foreseeable future. 

As the energy demand in all Southern African Development Community (SADC) countries is 

likely to rise, an increase in price is unavoidable. SEC estimates an increase in electricity 

prices of up to 20% 9 per year for the next 3 to 5 years in Swaziland. The price increase for 

the following period of up to another 10 years is estimated at 8% annually. Bearing in mind 

that the major electricity provider for Swaziland, Eskom, is going through an energy crisis 

due to the high local (RSA) demand and insufficiently installed capacities, the estimated price 

increase can only be conservative. 

The trend of energy consumption in SADC countries follows the world trend. The figure 

below presents an estimation of the world marketed energy consumption. The consumption 

in 2005 was almost double the consumption in 1980 and the estimated consumption in 2030 

is 50% higher as in 2005. 

Figure 2.3: Estimation on Future Energy Consumption Worldwide 

World marketed energy consumption 1980-2030 

(in quadrillion Btu) 

700,0 

600,0 

500,0 

400,0 

300,0 

200,0 

100,0 

694,7 

608,4 651,8 

512,5 563,0 

462,2 

283,7 308,6 347,4 365,0 397,8 

0,0 

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 

Source: Energy Information Administration (2007), http://www.eia.doe.gov/oiaf/ieo/world.html 

The energy markets and prices will be discussed in more detail in chapter 2.4. 

9 Interview with the SEC done in September 2008 


2 . 2 E n e r g y B a l a n c e s w i t h i n t h e S u g a r I n d u s t r y o f 

S w a z i l a n d 

The sugar industry is one of the energy intensive industries in Swaziland and requires a 

considerable amount of heat (in terms of steam) and electricity. Though nominally the 

industry should be able to produce sufficient energy from its own biomass residues to meet 

its current demand, the Swazi sugar industry still has to import considerable amounts of coal 

and grid electricity. This section of the chapter elaborates on the current energy balances 

within the sugar industry focusing mainly on the three sugar mills in the country. 

Sugar Processing 

Sugar production requires a considerable amount of energy, with the main energy 

consumption processes being cane crushing in the figure 2.4 illustrated as “shredder” (4), 

milling (5), condensing and cooling (evaporator) (7) and sugar crystallization (9). More details 

of each step process are provided in Annex 1. The figure below gives a visual impression of 

each step of the sugar processes. 

Figure 2.4: Sugar Processing 

Source: http://www.deir.qld.gov.au/images/whs/sugarmillfig02.jpg 


The sugar mill boilers and turbines are the heart for energy provision and hence for the 

whole sugar processing. The energy flow within the sugar mill has to be analysed in terms of 

boiler condition, turbines and efficiency. Therefore, an introduction on boilers and turbines is 

provided in the next paragraphs. 

The general need for boilers and turbines in the sugar industry 

Boilers are extremely critical to the operation of a cane sugar mill. By burning fuel and/or 

biomass in a boiler water becomes overheated to steam under a certain pressure. The 

overheated steam is conducted on a back-pressure turbine. Electrical current arises due to 

stress relief of the steam through the turbine. The steam from the boilers and exhaust steam 

from the turbines are used in several process steps but mainly in the evaporating process 

where more than 50% of the energy content of the generated steam is consumed. In 

Swaziland the processing of raw cane juice to raw sugar requires up to 0.4 kg of steam per 

tonne of cane provided by low (15 down to 1.5 bar) pressure steam. Electric motors driving 

the centrifugals and the pumping system in the sugar process together require 90% of the 

electricity. In total, the Swazi sugar industry needs up to 4 GJ power for processing one 

tonne of cane. 

The sugar cane industry is one of the few industries that are able to generate at least part of 

its own fuel demand at low cost. The fibre of the cane (bagasse) utilised as fuel in the boiler 

furnaces is generally sufficient to supply the total steam demand necessary for the 

production of raw sugar. 

State-of-the-art sugar factories are well-balanced regarding internal energy flows and 

normally leave over a surplus of bagasse. This bagasse surplus which would not be required 

for the production process can provide more steam that could be used for additional 

electricity generation by turbines. 

There are two options for maximizing electricity generation in a sugar plant: 

1. Increasing the pressure in the boiler leads to a higher pressure difference between 

the boiler and the pressure of the process steam resulting in a higher electricity 

generation in the turbines. 

2. Installing a condensate turbine to generate electricity at low pressure requires a 

perfect adjustment of the use of steam and electricity in the sugar processing in order 

to get surplus steam which can be used in the condensate turbine. The installation of 

a condensate turbine makes only sense in case of surplus steam and during offseason 

operation. 

In general, there are two different kinds of turbines, namely back-pressure turbines with an 

energy efficiency from 20% up to 34% and condensate turbines with a higher efficiency of 

about 43%. In Swaziland only the less efficient back-pressure turbines are installed. 

The Swazi sugar mills are using steam in different process steps with low pressure (19.4 – 

15 down to 1.5 bar) in form of a cascade. Figure 2.5 illustrates the main energy cascade of a 

Swazi sugar factory. The evaporators are the biggest steam consumers as illustrated in the 

centre of the figure. At this station the water content of the raw juice is reduced by 

evaporation in order to increase the sucrose content of raw juice. The energy demand 


depends mainly on following factors: i) the water content in the raw juice, ii) the juice 

temperature as well as iii) the technical performance of the single evaporators. 

The evaporation station in a sugar mill consists of a number of evaporators in series 

interconnected with one energy flow. The evaporators operate under automatically controlled 

conditions with each subsequent evaporator operating under decreasing pressure. The 

pressure of used steam is used optimally in case it reduces the pressure stepwise in each 

evaporator. The energy scheme in figure 2.5 illustrates this effect. At the first evaporator the 

pressure is 19.4 bar and it stepwise decreases until the fifth evaporator with 4.4 bar. Hence, 

the energy cascade reduces the specific steam demand to 25%, which means that out of 1 

kg steam 4 kg water can be evaporated instead of only 1 kg water in case of no energy 

cascade. 

Figure 2.5: Energy Scheme of a Sugar Plant in Swaziland 

450,0 bar 

445,0 °C 

Off gas, warm 

Off gas, hot 

Boiler 

Fuel 

Turbine 

Electrical 

power 

Heat exchanger 

app. 90,0 °C 

6,0 bar 

19,4 bar 

119,3 °C 

6,0-60,0 °C 

6,0 bar 

15,5 bar 12,1 bar 7,0 bar 4,4 bar 

112,4°C 105,0°C 88,5 °C 78,2 °C 

I. Effect Evaporater II. Effect Evaporater III. Effect Evaporater IV. Effect Evaporater 

V. Effect Evaporater 

Make up 

1,5 bar 

65,6 °C 

Pumpe 

Steam 

condensate 

tank 

0,2 bar 

6,0- 60,0 °C 

As mentioned above, the steam scheme illustrates the energy cascade with the different 

pressure and temperature levels in a simplified way. The figure does not show other steam 

consumers in the raw house. 

The description above demonstrates that steam supply is the determining factor in the sugar 

industry. Therefore, energy efficiency and energy consumption parameters are always 

expressed in the ratio of cane to steam. 


The sugar plant RSSC in Simunye has an energy efficiency of 48% or in other words 480 

tonnes of steam are demanded for 1,000 tonnes of sugar cane input. This corresponds to 

0.06 kg of coal per tonne of sugar. Data on efficiency for RSSC Simunye and the two other 

factories are shown in the table below. 

Table 2.4: Energy Efficiency of the Boilers in the Sugar Mills 

Sugar Factory 

Efficiency 

(%) 

Steam 

(in tonnes per 1000 

tonnes of sugar) 

Coal 

(in kg per tonne of 

sugar) 

Simunye 48 480 0.06 

Mhlume 67 670 0.19 

Ubombo 58 580 0.14 

Source: RSSC, Ubombo 

2 . 2 . 1 S t a t u s o f E n e r g y P r o d u c t i o n a n d U t i l i z a t i o n 

In Swaziland’s sugar industry the main energy sources are bagasse, coal and electricity. For 

about 3 years small amounts of tops and leaves of sugar cane (trash) are used by RSSC and 

Ubombo within trials. There are basically two types of sugar cane residues of sufficient 

calorific value: Bagasse, which is the fibrous residue delivered after the extraction of the 

juice from the sugar in mills, and the cane residues made up of leaves and tops of cane 

plants (also known as cane trash) that remain behind in the field after the harvest. 

Substantial amounts of bagasse are produced by the sugar industry and it has become a 

standard to use it for own energy generation within the plants. 

Despite the significant amount of bagasse Swazi sugar factories are currently importing 

electricity from the Swaziland Electricity Company (SEC) as well as coal from Eskom. The 

electricity from SEC is mostly used for the irrigation of the sugar cane estates owned by the 

factories. Coal is combusted with bagasse in cogeneration systems (boiler and turbine 

station) during the milling season. Coal is also used in off-season to generate energy for 

housing, and other units such as distillery and refinery. 

Table 2.5 shows the current cogeneration capacity in Swaziland. Although the combined 

capacities of the three sugar factories reach 51 MW, this power is generated from 30 bar 

pressure boilers and back pressure turbines; none of the electricity generated is sold to the 

grid. 10 

10 Source: 

http://www.gefweb.org/documents/Council_Documents/GEF_C28/documents/2597FinalFSPBrief_CogenforAfr 

ica.pdf 


Table 2.5: Current Cogeneration Installed Capacity in Swaziland Sugar Industry 

Sugar Mill 

Capacity (MWe) 

Mhlume 18.5 

Simunye 17 

Ubombo 15.5 

Total 51 


Table 2.6 shows the amount of fuel input used by the sugar mills for their own energy 

generation. Bagasse gives the largest contribution and provides approximately 85% of the 

energy generation. All three sugar mills in Swaziland produce bagasse with a moisture 

content varying between 50% and 53%. The moisture content is the main determinant of the 

calorific value, i.e. the lower the moisture content the higher the calorific value. Bagasse has 

a calorific value of 7 GJ/tonne at 50% moisture content. If bagasse has a dry substance of 

about 90% the calorific value raise up to 18 GJ/tonne. 

Table 2.6: Overview on Energy Input for Energy Generation in the Sugar Mills, 2006 

Energy generation 

input 

Bagasse in tonnes 

(approx. 50% 

moisture content) 

Trash in tonnes 

(25% moisture) 

RSSC Mhlume RSSC Simunye Illovo Ubombo 

359,911 505,485 503,663 

0 10,900 n.a. 

Coal 32,521 19,633 8,081 

Own electricity 

generation in GWh 

42.6 68.7 79.6 


All sugar mills have to purchase electricity to cover the energy demand for irrigation and 

housing. Additionally, diesel fuel for transportation is required. 

In the following section a detailed overview of the energy balance in each sugar mill is 

presented. 


2 . 2 . 2 T h e R o y a l S w a z i l a n d S u g a r C o r p o r a t i o n L i m i t e d 

– R S S C S i m u n y e 

During each season RSSC Simunye, Swaziland’s biggest sugar mill, crushes around 1.8 

million tonnes of sugar cane and produces 7,000 tonnes of raw sugar and 237,000 tonnes of 

VHP sugar. Simunye also runs a distillery with an annual production of 32 million litres 

ethanol. 

For the energy supply of the sugar plant including irrigation, transportation, housing and the 

sugar mill, bagasse, coal, trash, electricity and diesel fuel are used to cover the required 

energy demand. Table 2.7 provides an overview of the amount of energy inputs in Simunye. 

Coal consumption is divided into in and off season. In the off season coal is used for 

electricity generation for irrigation purposes and for energy supply for housing. The amount 

of trash used varies as it is still under development and ongoing trials are not finished. The 

aim of these trials is to replace 100% of the currently used coal by trash. RSSC is developing 

a CDM project 11 which is currently under validation which deals with fuel switch from fossil 

coal to renewable trash. 

Table 2.7: Fuel Input for Energy Demand in Simunye Sugar Plant 

Simunye 2007 2006 2005 

Coal burnt in season (tonnes) 14,816 10,886 8,269 

Coal burnt in off season (tonnes) 5,916 8,747 11,961 

Bagasse burnt (tonnes) 504,060 505,485 492,408 

Trash burnt (tonnes) 4,800 10,900 0 

Source: RSSC 

The table below shows the main processing figures of RSSC Simunye for the years 2005 to 

2007. The boiler house recovery of over 90% indicates a thermal loss of less than 10%; 

however, the overall recovery specified with 89% shows the recovery of the boiler house 

including the failures in the production process. The overall efficiency increased over the last 

3 years by up to 85% which indicates the degree of capacity utilisation of the sugar mill. 

11 RSSC (Royal Swaziland Sugar Corporation) Fuel Switching Project, further information available under: 

https://cdm.unfccc.int/Projects/Validation/DB/KKL3GHXCQL0RAHZ9TBZEKE3XBUZ5D1/view.html 


Table 2.8: Main Processing Figures of Simunye Sugar Mill, 2005 – 2007 

Manufacturing in Simunye 2007 2006 2005 

Cane crushed (tonnes) 1,896,825 1,810,622 1,885,709 

Tonnes cane per hour (TCH) 386 402 407 

Pol% Cane 14.37 14.53 14.56 

Mixed Juice Purity (%) 87.38 87.34 86.64 

Extraction (%) 96.83 96.5 96.91 

Moisture bagasse (%) 53.13 52.16 50.59 

Boiler house recovery (%) 92.2 92.51 90.96 

Overall recovery (%) 89.10 89.27 88.15 

Raw sugar (tonnes) 6,938 6,645 12,534 

VHP sugar (tonnes) 237,367 229,730 230,930 

Overall efficiency (%) 85.24 80.11 79.96 

Source: RSSC 

Simunye sugar mill has three bagasse-coal fired water tube boilers, each with a capacity of 

55 tonnes of steam per hour, and one water tube boiler fired only with bagasse with a 

capacity of 125 tonnes of steam per hour that can also combust coal. All boilers produce 

steam with a pressure of 30 bar. All boilers have installed air pre-heaters and economizers. 

The capacity of each of these boilers is shown in the table below. The installed capacity is 

290 but the running capacity is on average 195 tonnes steam per hour. 

Table 2.9: Boiler Characteristics in Simunye Sugar Mill, 2008 

Boiler 

Installed 

Capacity 

(t/h) 

Running 

capacity (t/h) 

Applicable fuel 

Pressure 

Age 

(years) 

No: 1 55 Bagasse and coal 30 bar 28 




TOTAL 290 195 

Source: RSSC 


The power station at Simunye consists of 3 back-pressure turbines with an installed capacity 

of 17 MWe. The power station is capable of exporting 9 MWe to the national grid. However, 

surplus electricity is used for irrigation purposes. The average workload is 12.5 MWe. 

Table 2.10: Turbine Characteristics in Simunye Sugar Mill, 2008 

Turbine/ Alternator 

Installed Capacity 

(MWe) 

Running capacity 

(MWe) 

Age (years) 

Simunye TA 1 3.5 28 

Simunye TA 2 3.5 28 

Simunye TA 3 10 50 

TOTAL 17 12.5 

Source: RSSC 

The total electricity generation varies between the years. However, it can be stated that 

Simunye sugar mill generates on average 70 GWh of electricity. 85% of the electricity is 

produced during the season and the rest during off season to provide electricity for irrigation, 

the distillery and housing. Table 2.11 shows the historical electricity generation from 2004/5 

to 2006/7. 

Table 2.11: Historical Electricity Generation in Simunye, 2004 - 2006 

Electricity generation in GWh 

2006/7 2005/6 2004/5 

68.7 74.8 73 

Source: RSSC 

Annex 2 provides further information on the technical equipment and capacities in Simunye 

sugar plant. 


2 . 2 . 3 T h e R o y a l S w a z i l a n d S u g a r C o r p o r a t i o n L i m i t e d 

– R S S C M h l u m e 

RSSC operates a sugar mill plus a refinery located at Mhlume with a yearly capacity of 

120,000 tonnes refined sugar. In 2007/2008 the sugar mill produced 22,000 tonnes of raw 

sugar and 22,000 tonnes of VHP sugar. There is a higher demand of coal as the refinery 

needs additional energy. 

The production of refined sugar is executed by melting raw sugar in water which afterwards 

goes through a cleaning procedure. After cleaning the sugar production a process starts in 

which the sugar runs through the evaporation, crystallization, centrifuge and drying. As 

described in the introduction of this chapter the whole process is very energy-intensive. 

Table 2.12 outlines the required fuel input at Mhlume sugar plant. The coal demand 

increased from 2005 to 2006 by one third due to an expansion of the plant capacity (please 

refer to table 2.13, amount of VHP sugar). All bagasse produced at the milling process is 

combusted in the boilers. Mhlume does not combust any trash so far, however, according to 

the submitted CDM project RSSC plans to combust trash at Mhlume mill in future, too. 

Table 2.12: Fuel Input for Energy Demand in Mhlume Sugar Plant, 2005-2007 

Mhlume 2007 2006 2005 

Coal burnt (tonnes) 31,003 32,521 24,426 

Bagasse burnt (tonnes) 343,440 339,917 359,911 

Source: RSSC 

The overall efficiency of the boiler house decreased by 10% in the years 2005 to 2007, which 

indicates failures in the process. Hence, the overall work load and the degree of capacity 

utilisation respectively decreased correspondingly by 10% to 71%. 

According to the main processing data and the on-site visits Mhlume mill provides a 

significant potential for energy efficiency improvements. 


Table 2.13: Main Processing Figures of Mhlume Sugar Mill, 2005-2007 

Manufacturing in Mhlume 2007 2006 2005 



Operation period (hours) 3,929 4,353 4,594 

Pol% Cane 14.74 17.82 17.86 

Mixed Juice Purity (%) 86.83 86.69 86.48 

Extraction (%) 96.85 97.29 97.52 

Moisture bagasse (%) 50.32 50.26 50.45 

Boiler house recovery (%) 89.41 90.54 90.00 

Overall recovery (%) 86.59 88.09 97.77 


VHP sugar (tonnes) 22,701 32,062 0 

Refined sugar (tonnes) 120,435 104,302 125,459 

Overall efficiency (%) 70.70 77.31 79.61 

Source: RSSC 

The Mhlume sugar mill runs three bagasse-coal fired boilers with a total capacity of 293 

tonnes of steam per hour. Last season, the running capacity was 263 tonnes per hour. All 

three boilers operate under 30 bar pressure and are already equipped with an air pre-heater 

and an economizer. Table 2.14 below outlines the characteristics of each of these boilers. 

Steam from the boilers is mainly required for the 15 evaporators with a five-effect system (as 

outlined in figure 2.5). The evaporation process demands two-thirds of the produced steam 

(220 tonnes per hour). Furthermore, steam is also needed in the milling process as the 

diffuser and the milling line are powered by steam driven mills. Currently, there are losses of 

about 700 tonnes of steam per day. The steam leakages have to be identified and analysed 

in order to improve the efficient use of the steam produced. 


Table 2.14: Boiler Characteristics in Mhlume Sugar Mill, 2007/2008 

Boiler 

Installed 

Capacity (t/h) 

Running 


Applicable fuel Pressure Built in 

No:1 68 Bagasse and coal 30 bar 1978 



Total 293 263 

Source: RSSC 

The Mhlume mill also has three back-pressure turbines with an installed capacity of 7.5 

MWe, 8 MWe and 3 MWe. The total installed capacity is 18.5 MWe. The running capacity is 

on average 11 MWe. In addition, the Mhlume plant holds a 1 MWe diesel engine as a 

standby in case of emergency. 

Like the other sugar plants Mhlume requires additional electricity, especially in off-season for 

irrigation purposes. 

Table 2.15: Turbine Characteristics in RSSC Mhlume Sugar Mill, 2008 


Installed capacity 

(MWe) 


(MWe) 

Age (years) 

Mhlume TA 1 7.5 40 



TOTAL 18.5 11.5 

Source: RSSC 

Annex 3 provides further information on the technical equipment and capacities of the 

Mhlume sugar plant. 


2 . 2 . 4 U b o m b o S u g a r L i m i t e d 

During the 2006/2007 season Ubombo sugar plant crushed close to 2 million tonnes of cane 

and produced 123,000 tonnes of raw sugar, 4,500 tonnes VHP sugar and over 100,000 

tonnes refined sugar. The plant in Ubombo consists of three main units: one boiler and 

power generation house, one sugar mill and one refinery with a production capacity of 20 

tonnes per hour. 

Table 2.16 provides an overview of fuel input to the Ubombo sugar plant. Ubombo runs trials 

on the use of trash since 2005. As evident from the table; coal demand reduced considerably 

from 2005 due to trash utilization over the last 3 years. It has to be mentioned that the trials 

also analysed different trash quality characteristics such as different moisture content. 

Therefore, the energy impact of using trash of one year cannot be directly compared to other 

years. The table also shows that Ubombo already uses all available bagasse for its own 

energy generation like the other mills. Furthermore, to meet the total energy demand 

electricity for irrigation had to be purchased from SEC. In 2007, Ubombo switched part of 

their cultivated land from sprinkler irrigation to centre pivot irrigation which is a more energy 

efficient irrigation method and this has resulted in considerable amounts of electricity 

savings. 

Table 2.16: Fuel Input for Energy Demand in Ubombo Sugar Plant, 2004-2007 

Ubombo 2007 2006 2005 2004 

Coal burnt (tonnes) 10,081 8,081 13,416 36,994 

Bagasse burnt (tonnes) 501,729 503,663 515,044 486,298 

Diesel consumption (litres) 1,597,546 1,641,948 1,682,375 1,812,409 

Source: Ubombo 

The table below shows the main processing figures of Ubombo from the year 2005 to 2007. 

As indicated the overall efficiency was 85% in 2007. Compared to other mills, Ubombo has a 

relatively low bagasse moisture content of 49.4% on average. 


Table 2.17: Main Processing Figures of Ubombo Sugar Mill, 2005-2007 

Manufacturing in Ubombo 2007 2006 2005 



Operation period (days) 227 239 235 

Pol% Cane 13.87 14.04 13.95 

Moisture% bagasse (%) 49.75 49.17 49.29 


VHP sugar (tonnes) 14,573 4,660 0 

Refined sugar (tonnes) 98,111 104,044 93,091 

Overall time efficiency (%) 85 83.60 82.27 


The Ubombo sugar mill has seven bagasse-coal fired water tube boilers. All boilers produce 

steam with a pressure of 30 bar and all are equipped with air pre-heaters and economizers. 

Boiler 7 has the ability to increase the pressure by up to 45 bar. The capacity of each of 

these boilers is shown in the table below. The installed capacity is 275 tonnes of steam per 

hour but the running capacity is on average 202 tonnes of steam per hour. 

Table 2.18: Ubombo Boiler Capacities 

Boiler 

Installed 

capacity 

(t/h) 

Running 


Applicable fuel Pressure Built in 

No: 1-5 (each 20) 

100 

Bagasse and coal 

30 bar 

1965 

No: 6 105 Bagasse and coal 30 bar 


TOTAL 275 202 


For its own demand Ubombo has also installed 30 bar back-pressure turbines to generate 

electricity. In 2007, 79.6 GWh of electricity were generated, hereof 65.6 GWh covered the 

electricity demand in the mill and 14 GWh were used for irrigation. 


Table 2.19: Turbine Characteristics in Ubombo Sugar Mill, 2008 


Installed 

Capacity (MWe) 


(MWe) 

TOTAL 15.5 11.32 


Ubombo installed a decentral process control system in the mill, but the refinery is not 

covered by this control system. 

2 . 3 P o l i t i c a l a n d L e g a l F r a m e w o r k C o n d i t i o n s 

The legal energy policy and planning framework in Swaziland is currently controlled solely by 

the government through the Ministry of Natural Resource and Energy (MNRE). However, this 

is set to change with the creation of the national Energy Regulatory Authority envisaged in 

the new Energy Regulatory Act of 2007. The Energy Section, within MNRE is an 

independent unit responsible for all energy related matters. Its mandate is to ensure a 

sustainable supply and use of energy for all. 

One of the major players in the energy sector in the country is Swaziland Electricity 

Company, (SEC) 12 , which is a government owned company. Currently, the company is 

enjoying a monopoly on import, distribution and supply of electricity through the national grid. 

Though major companies in the sugar and forest sector also play an important role in 

generating electricity, these companies currently produce electricity for their own 

consumption. These companies are connected to the grid but do not sell their surplus of 

generated electricity to SEC, because there are no regulations or tariffs for feeding into the 

grid. 

2 . 3 . 1 C u r r e n t L a w s a n d R e g u l a t i o n s i n t h e E n e r g y 

S e c t o r 

Swaziland’s national policy agenda for sustainable social, environmental and economic 

development is set out in a long-term vision, the National Development Strategy (NDS) 13 . 

According to the NDS the energy sector plays a central role to achieve socio-economic 

development. The strategic objectives of the energy sector outlined in the NDS include the 

following: 

1. Ensure improved access to a range of energy services for the whole population; 

2. Make electricity available and affordable in rural areas; 

12 Former Swaziland Electricity Board, (SEB) 

13 Also known as Vision 2022 


3. Assess the development and dissemination of appropriate renewable energy 

technologies, 

4. Improve energy efficiency. 

The National Energy Policy 2003 was mainly formulated to address the energy-related 

strategic objectives outlined in the NDS. The key objective of this policy is to diversify 

Swaziland’s energy base by ensuring an adequate supply and the security of energy in 

Swaziland. Within this policy, issues relating to energy such as petroleum, renewable energy 

and other fuels are discussed. The policy calls for environmentally and economically 

sustainable production, supply and use of energy. The Energy Policy also supports the 

increasing importance of using cleaner fuels and the development of more efficient energy to 

meet the nation’s energy needs and ease dependence on imported energy. 

Currently, the country is undergoing major power reforms that are meant to liberalise the 

industry and allow more effective private sector participation. The main objectives of these 

reforms include among others: 

1. Improve quality and reliability of supply; 

2. Increase the use of local energy resources for electricity generation, thereby 

contributing to the security of supply; 

3. Increase cost reflectivity and transparency of electricity tariffs; 

4. Increase access to electricity throughout the country, thereby facilitating economic 

development. 

To facilitate the current reforms, 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 2007. 

• The Swaziland Electricity Company Act of 2007 provides for the transformation of the 

Swaziland Electricity Board (SEB) to the Swaziland Electricity Company (SEC), 

which is a company under the Companies Act of 1912. SEC is to perform all functions 

which were performed by SEB relating to generation, transmission, distribution and 

supply of electricity. 

• The Energy Regulatory Authority Act of 2007, establishes the Energy Regulatory 

Authority and defines its procedures. According to this Act the independent Energy 

Regulatory Authority, once in place, will be responsible for the monitoring and 

controlling of the energy industry, the setting of tariffs and prices and for the issuing of 

licenses for all undertakings in the energy sector. 

• The Electricity Act of 2007 opens the sector to private participation through a 

licensing regime overseen by a Regulatory Authority. The Act provides for the 

regulation of the Electricity Supply Industry in Swaziland. It generally regulates the 

generation, transmission, distribution and supply of electricity in Swaziland. Any 

person generating, transmitting, distributing or supplying electricity in the country is 

required to be licensed by the Energy Regulatory Authority. 


Supportive Energy Sector Strategies 

1. Utilization of Renewable Energy and Action Plan 1997 

This strategy indicates a long term programme for the development of renewable energy in 

the country. The main aim of this action plan is to develop and promote renewable energy 

initiatives in the country. However, according to the energy department this action plan is 

already outdated and needs immediate review. It is envisaged that it will be updated and 

integrated to the National Energy Policy Implementation Strategy, which is currently 

developed. 

2. Biofuels Strategy 

The country is currently developing a Biofuels Strategy which aims at providing clear 

guidance regarding the action and measures that must be adopted in order to improve and 

coordinate the development of biofuels in the country. The long term goal of the strategy is to 

ensure that: “The biofuels potential of Swaziland is adequately developed and the production 

managed in an environmentally sustainable way, without constraining food security and 

equally benefiting all people in Swaziland” 14 . The strategy is developed by a biofuels task 

team and is expected to be finalised and handed over to MNRE by the end of 2008. 

2 . 3 . 2 C u r r e n t R e g u l a t i o n s R e l a t e d t o t h e N a t i o n a l 

S u g a r M a r k e t 

The operations of the Swaziland sugar industry are regulated by the Swaziland Sugar 

Association (SSA). The Swaziland Sugar Association was formed in 1964 and is responsible 

for providing the services necessary for the general development of the industry. The main 

mandate of SSA includes: 

• Providing technical services to growers (so that they produce high-quality cane on a 

sustainable basis); 

• Conducting cane testing services (to determine the sucrose content so that growers 

are paid accordingly); 

• Marketing all the sugar as well as all by products except bagasse. 

This means that all the sugar produced in Swaziland is owned by the SSA. The sugar sales 

are handled by the Commercial Department of SSA, through the decisions made by the 

Marketing Executive Committee (MEC) of the sugar industry. 

Structure 

The local sugar industry derives its structure from the Sugar Act of 1967. The highest policymaking 

body within the SSA is the Council. The Council comprises twelve members from the 

Swaziland Sugar Millers Association (SSMA) and twelve members from the Swaziland Cane 

14 Direct quote from the Draft biofuels strategy 2008 


Growers Association (SCGA). Sugarcane growers and millers respectively belong to the 

Swaziland Cane Growers Association (SCGA) and Swaziland Sugar Millers Association 

(SSMA). These two bodies are equally represented in the Council. The Council is chaired by 

an independent person who has no direct or indirect interest in growing or milling sugarcane, 

neither in the disposal of sugar or molasses. 

The Council has also a number of bodies reporting to it. The Sugar Industry Quota Board is 

also chaired by an independent person. Millers and growers from the sugar industry can 

become members as well as independent persons who do not have any financial interest in 

the sugar industry. The voting balance is in favour of the independent members. The Council 

of SSA creates the total sucrose quota on the basis of available milling capacity and markets 

for the disposal of sugar. The Quota Board then allocates the sucrose production quotas 

among successful applicants. When allocating available sucrose quotas, the Quota Board 

must be convinced that the applicants have access to suitable land and adequate water 

supply. Successful applicants are allocated a "contingency quota" which, subject to 

satisfactory performance, is in time converted into a permanent quota. 

This structure and the stakeholders of the sugar industry are illustrated in figure 2.6 below. 

Figure 2.6: Swaziland Sugar Industry Structure 

Source: Swaziland Sugar Asssociation 


Markets 

The Swaziland sugar industry sells on five main markets, namely the EU, the US, the 

Southern African Customs Union (SACU), the Common Market for Eastern and Southern 

Africa (COMESA) and the world market. 

• EU Market: Swaziland’s preferential status in the EU is guaranteed through a 

trade instrument, the Sugar Protocol (SP) as part of the Cotonou Agreement. This 

preference was further expanded through the Special Preferential Sugar. These 

two schemes have formed the backbone of Swaziland’s sugar trade with the EU. 

Sugar sales to the EU amount to about 150,000 tonnes per annum, with 120,000 

tonnes sold under the SP. 

• US Market: Sales into the US benefit from the Tariff Rate Quota (TRQ), which 

allows access on preferential terms. The sales to the US amount to about 16,000 

tonnes per annum. 

• SACU Market: Sales into the SACU market include sugar destined for the local 

market. SACU sales are approximately one-half of the total SSA sales. 

• COMESA: Sugar sales at regional level besides SACU go through the COMESA 

market. Sales to this market are almost 100,000 tonnes per annum. 

• World Market: Sales to this market are largely representative of residual sales, 

where the excess sugar is sold. This market is characterized by generally low 

prices. 

The graph below shows quantities of sugar sold to the different markets between 1996/97 

and 2007/8. The quantities of sugar sold to the different markets have been fluctuating over 

the years. Sugar sales to the SACU market accounted for over 50% over the last five years 

while in 2007/8 sales to the EU market made approximately 30% of total sales. 


Figure 2.7: Swaziland Sugar Quantities Sold according to Markets 

700.000 

Quantities sold acc. to market (MT) 

600.000 

500.000 

400.000 

300.000 

200.000 

100.000 

- 

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 

SACU COMESA EU USA World Market 

Source: National adaptation strategy, Swaziland Government, April 2006 

2 . 3 . 3 P e r s p e c t i v e s 

Due to the impending power crisis in the SADC region coupled with the escalating world 

energy prices, the use of local energy sources to meet national requirements is imperative 

for Swaziland. Eskom is without doubt running out of surplus power and this affects the 

whole region. However, the situation will be particularly desperate in Swaziland where, as 

already mentioned, 80% of the electricity is imported from Eskom. Therefore, there is a need 

for the Swazi government to develop vigorous strategies and programmes, which aim at 

exploiting and promoting sustainable energy to achieve energy security. 

The ongoing power reforms and the development of strategies such as the biofuels strategy 

and the national policy implementation strategy are seen as essential first steps in facing up 

the challenge. Nevertheless, more needs to be done in terms of promoting energy efficiency 

and renewable energy in the country. This could include: 

1. Creating a favourable environment for big sugar, timber and pulp industries as well as 

other potential enterprises to participate in domestic energy supply. This could be 

accomplished in a form of favourable regulations and feed-in tariffs, which should be 

defined and implemented as soon as possible; 


2. Incentives for Independent Power Producers (IPPs) using Renewable Energy 

Technologies (RETs); 

3. Support of off-grid electrification under rural electrification; 

4. Setting national targets for renewable energy; 

5. Setting up national funds or credit lines for investments that result in increased 

energy efficiency and renewable energy. 

Sugar Industry 

The reform of the EU sugar market will have substantial impact on the Swazi sugar industry. 

As already mentioned in chapter 1, Swaziland has been enjoying a preferential status within 

the EU market, under the sugar protocol and the Special Preferential Sugar agreement, 

where the country benefits from predetermined prices and regulated quota. As a result of this 

Swaziland achieved export returns of approximately 600 million Euro yearly through sugar 

exports to the EU. However, this is set to change under the current reforms where the sugar 

price is expected to decline by a cumulative 36% over the period 2006-2020. Moreover, by 

2009 Swaziland, like other ACP countries, will have to compete with other less developed 

countries that will soon have guaranteed access to the EU market under the EBA agreement. 

This situation calls for the development of effective strategies and actions that could prepare 

the country as well as the sugar industry to adjust meaningfully to these reforms. Such 

actions should address: 

• Reduce production cost; 

• Increase in the competitiveness and sustainability of the sugar industry; 

• Secure a competitive sugar price i.e. decrease costs (use biomass for energy 

generation, increase process efficiency); 

• Increase quality (invest in modern technology); 

• Introduce new products (as bioethanol). 

2 . 4 M a r k e t s a n d P r i c e s 

Corresponding to the increased energy prices mentioned in chapter 2.1 the following chapter 

presents the price development on the world market and the Swazi market. The price 

development of several energy sources as well as of sugar demonstrates their correlation. 

As the share of energy costs represents about 50% of the production costs in the sugar 

industry, energy consumption and energy costs respectively constitute crucial factors. 


2 . 4 . 1 E n e r g y P r i c e s 

2.4.1.1 Crude oil, Coal, and Derivates 

World energy prices drive any investment and continue to play a vital role in stimulating or 

limiting economic development. Oil is a major source of energy worldwide; the price of crude 

oil has been rising continuously over the past years with striking hikes reaching over 100USD 

in the past few months. Figure 2.8 shows the crude oil spot prices for the period 1986-2008. 

The graph demonstrates that prices were relatively stable until the year 2000. The crude oil 

spot prices in January 2008 were almost three times higher than the prices in the year 

2000 15 . 

Figure 2.8: Key Crude Oil Spot Prices in USD/barrel, 1986 – 2008 

Source: IEA Key World Energy Statistics 2008 

On the contrary, coal prices have been historically lower and more stable than oil prices. 

However, over the last couple of years coal prices have behaved in the same way as oil 

prices, with a notable sharp increase in the period 2003 to 2007. Figure 2.9 shows the prices 

for steam coal import from 1983-2007. In the period 1983-2003 the price was relatively 

stable, but in the period 2003 to 2007 the price increased by almost 100%. 

15 Impacts from the financial crisis (since September 2008) to the oil prices are not considered in the report. 


Figure 2.9: Coal Import Costs in USD/ tonne, 1983 – 2007 

Source: IEA Key World Energy Statistics 2008 

There is a link between energy price trends on the world market and in Swaziland. In graph 

2.10 the prices for coal, petrol, diesel and paraffin are presented. At the beginning of October 

2008 diesel and petrol were available at gas stations in Swaziland at a price of 1030 E cents 

per litre and petrol for 930 E cents per litre, respectively. The significant increase in prices in 

Swaziland corresponds to world trends. 


Figure 2.10: Prices of Coal, Diesel, Petrol and Paraffin in Swaziland in the Period 

1996 – 2007 in E cents (coal in E) 

1000 

900 

800 

700 

600 

500 

400 

300 

200 

100 

0 

Coal (E/t) 

Petrol (Ec/lit) 

Diesel (Ec/lit) 

Paraffin (Ec/lit) 

1996 

1998 

2000 

2002 

2004 

2006 

2008 

Source: Ministry of Natural Resources and Energy, Energy Department and RSSC 

2.4.1.2 Electricity 

The electricity prices in Swaziland differ depending on the end user. In the table below three 

consumer sectors are presented with prices. All consumer categories are facing an increase 

of around 20% compared to the prices in 2005. It is also important to mention that the 

consumers in Swaziland are charged for a base fee regardless of the consumed electricity 

that ranges between 40 and 1500 E per month. 

Table 2.20: Electricity Prices by Sectors in Swaziland, 2005 – 2008 

Electricity price 

Ec/kWh 

2005 2006 2007 2008 16 

Domestic 42.47 44.08 45.98 50.58 

Industrial 21.81 22.64 23.61 25.97 

Commercial 56.48 58.63 61.15 67.27 

Source: RSSC 17 

16 The data for 2008 is the price in October 2008. 

17 Unfortunately it was not possible to get any information from SEC directly. 


In energy-intensive industries like the sugar industry the impact of fuel and electricity price 

increases is severe and may lead to a loss of competitive advantage, and on the long run it 

might even lead to a breakdown of the industry. 

2 . 4 . 2 S u g a r P r i c e s 

The graph below gives the sugar prices during the period 1996 to 2007 for four export 

markets of Swaziland’s sugar production. The highest prices are reached on the EU market 

with 4,600 E per tonne of sugar. Over the last couple of years the prices on the US market 

were similar to the prices on the SACU and COMESA markets. Throughout the whole period 

the least fluctuations in sugar prices occurred on the COMESA market. Each of the these 

sugar markets experienced turbulences in this period, however, in 2008, the price has 

increased compared to the price in 1998 for all the observed markets apart form the US 

market. 

From 2003 to 2008 the sugar prices in Swaziland followed the world price trends and since 

2004 they have been experiencing a constant increase by around 10% yearly. The weighted 

average price increase from 1996 to 2007 was more than 55%. 

Figure 2.11: Sugar Export Prices in Swaziland, 1997 – 2008 in E per tonne 

5.000 

4.000 

3.000 

2.000 

1.000 

- 

96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 

SACU COMESA EU USA 

Source: National Adaptation Strategy, Swaziland Government, April 2006 


2.4.2.1 Ethanol 

In 2007, approximately 54 million m3 fuel ethanol were produced worldwide of which the 

USA produced almost 48% and Brazil 38% of total ethanol. Annex 4 specifies ethanol 

characteristics regarding fuel ethanol. 

Like sugar prices (see 2.4.2) the price of ethanol does not show such dramatic increases as 

fossil fuel commodities. Figure 2.12 illustrates the commodity price of ethanol fuel at the 

different stock exchanges. Since the beginning of 2008 the price varied between 2 and 3 

USD per gallon but has been steadily increasing. The ethanol price shows more linkages to 

the sugar price than to crude oil. Brazil, the world market leader in the production of sugar 

and ethanol, is able to switch from ethanol and sugar processing in short term. Therefore, the 

country is perfectly prepared to adjust to varying international market conditions. This makes 

Brazil the dominating producer of ethanol. 

Figure 2.12: Price Development of Ethanol 2005 – 2008 

Source: http://www.cbot.com/cbot/pub/cont_detail/0,3206,126+36292,00.html 

Production costs of ethanol vary from the most efficient producers in Brazil to the most 

expensive producers, the Europeans. In Brazil the production costs of ethanol are 

approximately 24 to 28 Euro cents per litre. In addition to the production costs, transportation 

costs to the European or to the African markets have to be considered which can be 

estimated at 5 Euro cents per litre. In total, the costs of Brazilian ethanol to the foreign 


market vary between 29 to 33 Euro cents per litre ethanol. In Europe, the total costs 

excluding the transportation costs vary between 47.5 and 64 Euro cents per litre. Hence, the 

world market leader Brazil is able to offer ethanol for the European market at a more 

favourable price (39% to 52% cheaper) than the European producers. The reason is due to 

different feedstock use. In Europe, ethanol is produced out of grains and sugar beet, 

whereas Brazilian producers use sugar cane for the ethanol production which is more 

yielding than grains. The following figure outlines the typical ethanol yield per hectare. The 

figure of sugar cane is based on the average yield in Brazil, the data on corn refers to the US 

and the remaining figures refer to crop yield in the European Union. It shows that sugar cane 

is the most profitable feedstock for ethanol production. 

Table 2.21: Typical Ethanol Production per ha by Crop 

7000 

6000 

5000 

4000 

3000 

2000 

1000 

0 

Sugar 

cane 

Sugar 

beet 

Corn Wheat Barley 

Yield in litres per ha 

Source: Fulton et al., Biofuels for Transport: An International Perspective (Paris: International Energy 

Agency, 2004). 

The biggest part of the costs for ethanol composes the feedstock costs with 70 to 80% from 

the total costs. That includes all costs in the production and supply of feedstock (seeds, 

seedlings, fertilizer, irrigation, labour costs, agricultural equipment etc.). Additional costs are 

transportation costs, operation costs of the ethanol plant and working capital costs 

depending on the investment which was undertaken. 

The feedstock price of the fair market value of ethanol has to be determined in order to 

compare the return of investment of sugar and ethanol production. The feedstock price is 

calculated by subtraction of operating, transportation and capital costs from the fair market 

value. The determination follows as described below: 

At first the ethanol market value has to get determined. Based on the experiences on the 

global ethanol market the commercially available ethanol price is defined at 0.55 Euro per 

litre as an average selling price. 


From the average selling price the operating, transportation and capital costs have to be 

subtracted. 

The following costs are assumed: 

1) transportation costs are estimated at 0.05 Euro per litre, 

2) operation costs are estimated with 0.06 Euro per litre, 

3) working capital costs are defined at 0.03 Euro per litre, 

4) tax is not considered. 

The result shows a determined feedstock cost. Based on the demonstrated calculation the 

feedstock cost from the defined ethanol price is 0.41 Euro per litre ethanol. 

In a next step the determined feedstock cost is recalculated into the sugar price per 

kilogramme of sugar. The benchmark of ethanol yield and ethanol production from sugar 

respectively ranges between 500 and 590 litres ethanol per tonne of sugar. In the calculation 

below an average yield of 550 litres of ethanol from one tonne of sugar (and 0.55 litre of 

ethanol per 1 kg of sugar, respectively) is assumed. The sugar price per kg is calculated by 

the multiplication of the feedstock cost per litre ethanol (0.41 Euro) with the ethanol yield in 

percentage (55% and 0.55 respectively). 

Based on all assumptions: in case of a ethanol price of 0.55 Euro per litre a sugar price of 

0.22 Euro per kg would be possible. However, taxes and profit margin are not considered. 

The result of the calculation shows that at an ethanol price of 6.33 E/litre (0.55 Euro/ litre) the 

share of the feedstock cost is 2.59 E/kg sugar (0.23 Euro/kg sugar). Hence, a selling price of 

fuel ethanol at 0.55 Euro per litre is comparable to a selling price of 225.50 Euro or 2,593 E 

per tonne of sugar. 

The following calculations in table 2.21 summarize the assumptions and the result. 

Table 2.22: Sugar Price in relation to Ethanol 

Euro 

Emalangeni 

Market price fuel ethanol (per litre ethanol) 0.55 6.33 

Transportation (per litre ethanol) -0.05 -0.58 

Operation costs (per litre ethanol) -0.06 -0.69 

Capital costs (per litre ethanol) -0.03 -0.35 

Feedstock costs (per litre ethanol) 0.41 4.72 

Ethanol yield on sucrose (litre ethanol/kg) 0.55 0.55 

Sucrose price ex SSA (per kg) 0.22 2.59 


The result compared with the sales price of SSA is illustrated by a black line in the figure 

below. It shows that sugar sales to the EU and SACU would be more profitable than the 

production of ethanol. However, the production of ethanol would be more profitable than 

sugar sales to COMESA and USA. 

Figure 2.13: Feedstock Price for Ethanol Production compared with Sugar Prices 

Source: National Adaptation Strategy, Swaziland Government, April 2006, modified by Consultant 

The diversification of the Swazi sugar industry offers the option to choose between sugar 

and/or ethanol sales depending on the highest benefit which can be gained on the market. In 

case the fair market value of ethanol increases, it makes more sense to go for ethanol, and 

in case the sugar and global ethanol price decreases, the ethanol sales for the domestic 

market (as fuel) can be considered, too. The capacity of sugar production can easily be 

increased or decreased. The Swazi sugar industry would gain more flexibility by the 

diversification of its products and therefore it would be less dependant on the sugar market 

as it is right now. According to the presented estimations the ethanol production is worth to 

consider in Swaziland. 

2 . 4 . 3 S u m m a r y 

Energy costs account for around 50% of the overall production costs which made it 

necessary to take a closer look at the correlation of price developments for energy sources 

and sugar sales within the context of this study. 

The following graph shows the index prices for electricity 18 and the weighted average sugar 

prices in Swaziland for the period 2003 to 2008. Taking the year 2003 as the basis the 

electricity price has constantly increased by an average rate of 6% per year. The highest 

18 The electricity price for industrial consumers is presented. 


increase of around 10% occurred in the year 2008 and can be explained by the energy crisis 

in South Africa being the main electricity provider to Swaziland. 

During the same period the weighted average sugar price decreased between the years 

2003 to 2007. The highest decrease occurred in 2006 when the price was more than 13% 

lower than the one of the base year. In 2007, sugar prices approximately reached the price 

level of the base year, and in 2008, the price increased by almost 10%. 

Figure 2.14: Index Prices for the Electricity and Sugar in Swaziland, 2003-2008 

140 

130 

120 

110 

100 

90 

Electricity price 

(EC/kWh) 

Sugar price 

(weighted average) 

in E/MT 

80 

2003 2004 2005 2006 2007 2008 

Source: National Adaptation Strategy, Swaziland Government, April 2006; RSSC 

Although energy remains the biggest cost factor in sugar production increasing electricity and 

coal prices are not reflected in an adequate increase of sugar prices. 

Since 2003, the price for electricity in Swaziland went up by 30% – and this will continue at a 

more significant rate in the nearest future – and the price of coal by over 130%, respectively. 

At the same time sugar prices have been declining on the sugar world market until 2006 they 

finally increased by only 10%. 

The sugar industry of Swaziland has no other means to react to international market 

tendencies than by taking adaptation measures. It is hardly possible to forward rising energy 

or fertilizer costs to the sugar sales price. 

In this situation the sugar producers have to investigate options for energy efficiency, 

renewable energy measures and alternative energy concepts in order to secure a stable 

profit for their production and to become more competitive on the world market. 

Furthermore, it needs to be evaluated under which market conditions a diversification of 

commodities in the sugar industry becomes feasible and financially attractive. If for example 

the sugar price falls below 225.50 Euro or 2,593 E, respectively, per tonne of sugar it will be 

more attractive to produce and sell ethanol instead of sugar. 


3 A S S E S S M E N T O F O P P O R T U N I T I E S F O R 

E N E R G Y E F F I C I E N C Y A N D R E N E W A B L E 

E N E R G Y 

The current chapter summarizes identified options to reduce energy costs by implementing 

energy efficiency (3.1) and renewable energy (3.2) measures within the sugar industry of 

Swaziland. Potential energy efficiency measures are proposed for the sugar processing and 

irrigation sectors. 

The report does not provide specific detailed technical instructions for each of the three 

plants. Detailed technical feasibility studies have to be undertaken in order to provide such 

information. Besides, such investment decisions are something that needs and will be 

decided by the engineering departments and at the management level of each company. 

Instead, a series of technical measures was identified by the study team, which is based on 

state-of-the-art technology in the sugar industry. These measures have been discussed with 

the technical staff of the sugar mills. From the bundle of potential energy saving and bioenergy 

activities suggested by the study team, the companies may select and implement 

those which are in line with already foreseen investment strategies and which have a high 

potential for being co-financed through carbon certificates. 

Options for using bio-energy are described along the process of producing sugar and 

respective by-products. Furthermore, additional options were identified and described such 

as the utilisation of trash (discussed in section 3.2.6), or the establishment of oil crop energy 

plantations (discussed in section 3.2.7). 

Also project opportunities were assessed in renewable energy and energy efficiency outside 

the sugar industry which are described in chapter 3.3. 

The development and implementation of these opportunities request further concepts, basic 

engineering and last but not least an economic assessment. Based on the data gathered 

during the fact finding mission in phase 1, at this stage of the assignment suitable project 

ideas are outlined. 

During the follow-up phases concrete measures will be identified together with the mill 

operators that might qualify as CDM projects and therefore could receive support for setting 

up a climate project from the EC project. Additionally, project opportunities located in the out 

growers sector could be identified that might be suitable for receiving direct financial support 

from RDMU managed funds as well as from carbon revenues. 


3 . 1 E n e r g y E f f i c i e n c y i n t h e S u g a r I n d u s t r y 

The overall efficiency of the sugar plants is about 85%, there is a gap of up to 15% to 

improve the performance of the plants to 100% efficiency, i.e. there is still room for efficiency 

improvements. 

Energy efficiency measures in the sugar cane industry are divided into the following 

categories: 

- Energy efficiency by optimization of the existing process, 

- Energy efficiency by optimization of the operating model, 

- Energy efficiency by changing process steps, 

- Energy efficiency in irrigation. 

The implementation of these measures underlies several decision making processes within 

the industry. The optimization of the existing process is under the responsibility of the 

operator. Normally, this does not need significant additional investments and should be 

executed in the course of maintenance. 

The optimization of the operating model requires strategic as well as political decisions. 

The change of process steps requires the execution of a profitability analysis as well as a 

technical examination in order to implement these measures in single steps according to an 

investment plan. 

Subsequently, the different possibilities of each category will be shown. 

3 . 1 . 1 E n e r g y E f f i c i e n c y b y O p t i m i z a t i o n o f t h e 

E x i s t i n g P r o c e s s 

The quickest, cheapest and easiest implementable measure for energy optimization is the 

avoidance of energy losses during the sugar process. 

1. Completion of the insulation and closing of steam leakages 

In all sugar mills in Swaziland the insulations are completely or at least partly destroyed due 

to maintenance and repair measures. Therefore, it is recommendable to rebuild the 

insulation as well as to close all leakages at the pipeline systems in order to avoid any 

losses. 

2. Installation and completion of frequency converter 

In the past engines were either turned on or off, and during engine operation the 

performance was only adjusted by volume flow through the valves and not through the actual 

performance demand of the process. With the presently available frequency converters it is 


possible to adjust the engine performance according to the production requirement and 

therefore to reduce the energy demand of the engines. Frequency converters should be 

installed at big pumps like cooling cycle pumps, juice pumps, boiler fan and the centrifuge 

motors. 

3. Reduction of leakage current 

The electrical switching system has to be checked with regard to leakage currents and has to 

be insulated accurately. Otherwise accordant circuits have to be installed in order to reduce 

power losses within the switching system. About 3% of the electrical performance can hereby 

be saved. 

Table 3.1: Major Maintenance Energy Efficiency Measures in the Sugar Plants 

Measures Energy savings Costs 

1 Completion of the insulation 

and closing steam leakages 

2 Bringing in a frequency 

converter on the big 

electrical motors 

3 Reduction of leakage 

current 

2 up to 5% of the 

steam demand 

Up to 10% of the 

motors energy 

demand 

Up to 3% 

electrical power 

savings 

Depending on 

condition of the 

plant 

Up to 15,000 Euro 

per engine 

Depending on 

condition of the 

plant 

Status in the 

mills 

Applicable to 

all mills 

Applicable to 

all mills 

Applicable to 

all mills 

3 . 1 . 2 E n e r g y E f f i c i e n c y b y O p t i m i z a t i o n o f t h e 

O p e r a t i n g M o d e l 

1. Completion of a high automation standard process control system 

There is a high risk that failures in the sugar processing are detected late which leads to 

interruptions in the sugar process. The utilisation of a high automation standard process 

control system is recommended to improve the total performance of the sugar mill. Such a 

control system requires a central process control room and the control system has to cover 

the whole plant. The decentral process control stations in use would not be required 

anymore, and problems within the production process could be detected earlier. Additionally, 

this would allow the operator to have direct influence on the process and the production 

downtimes could be reduced. 

2. Production of ethanol 

Under the current sugar regulatory framework, which gives all the power related to sugar 

marketing to the SSA, it is only possible to increase the ethanol production for the sugar 


market through the processing of molasses to ethanol. Only changes to currently existing 

national regulations and the deallocation of sugar contingents would allow sugar producers 

to be able to decide on their own whether they want to produce ethanol or sugar. 

Brazil owns the leading sugar and ethanol production industry in terms of technology and 

efficiency. The Brazilian ethanol and sugar producers are able to choose between sugar and 

ethanol production on short notice. On average the share between sugar and ethanol 

production is about 50% of the incoming sucrose content by cane. The ethanol yield is 

between 500 and 590 litres ethanol per tonne of sucrose. 

The option to choose and switch from ethanol to sugar production could mean a higher 

flexibility for Swaziland’s sugar industry. Operators could produce for the market with the 

highest demand leading to higher financial returns. If the Swazi sugar industry converts 50% 

of the sucrose content of the harvested cane into ethanol, a production potential of about 

200,000 m3 of ethanol per year exists. The current annual production of around 60,000 m3 

of ethanol is fabricated from molasses only. 

The sugar factories traditionally tried to optimize their process by maximizing the A-sugar 

output and minimizing the ratio of B- and C- sugar 19 and molasses. Since the late 1960s the 

focus is on the production of A-sugar and not on the energy consumption of this process. By 

maximizing the A-sugar output the energy demand per tonne of sugar increases as the B- 

and C-sugars are melted again and returned to the evaporation process in order to convert 

them into A-sugar. To improve the energy performance in the sugar industry the focus must 

be on the production of A-sugar with the lowest energy demand per tonne of sugar. That 

leads to higher sucrose content in the molasses. Additionally, the ratio of B- and C-sugar 

increases. Molasses, B- and C- sugar are used for ethanol production. This corresponds to a 

decrease of A-sugar output. The ratio of sucrose usage can be adjusted between 70% sugar 

and 30% ethanol up to 30% sugar and 70% ethanol. The energy demand for the production 

of ethanol from cane amounts to approximately 70% of the total energy demand for the sugar 

production 20 . Assuming a ratio of 50% ethanol production from the total sugar amount 

including molasses, an energy saving of up to 19% can be achieved. 

For the production of ethanol a fermentation and distillation unit is required. The by-product 

vinasse could be used for biogas production (energetic utilisation) or could be fed into an 

evaporator to produce concentrated molasses (CMS) as a fertiliser substitute. 

3. Extension of the boiler and turbine operation time 

During off-season the boilers are shut down and are therefore not available for steam 

production. Any extension of the operation period into the off-season leads to an additional 

biomass request. Therefore, RSSC and Illovo undertake trials in the provision and 

combustion of tops and leaves (trash) from sugar cane with bagasse and coal in their boilers. 

The result so far indicates that a blending of up to 10% of trash is possible. The boilers could 

run another 14 weeks during off-season in order to produce electrical power. This could be 

used for covering energy needs for irrigation or be exported to the public grid. 

19 A- B- and C- sugars are a classification of the sugar structure and indicate the quality. 

20 Without consideration of a further treatment of the sugar within the refinery. 


4. Change from water wash layer to syrup or molasses wash layer 

Periodic centrifuges can be operated with syrup or molasses wash layer instead of a water 

wash layer. This reduces the water demand and subsequently the energy demand for 

evaporation. 

Table 3.2: Energy Efficiency Measures by Optimization of Operating Model 

Measures Description Effect Cost Status in the 

mills 

1 Installation of a 

high automation 

standard control 

system 

Implementation of 

a complete 

process control 

system 

Increasing overall 

efficiency 

(now 85%) 

Up to 400,000 

Euro 

Applicable to all 

mills 

2 Production of 

ethanol 

Reduction of B 

and C Sugar 

loops 

Energy savings up to 

19% 

500 Euro per m3 

yearly capacity of 

EtOH 

Installed in 

Simunye 

3 Extension of 

operating time of 

boiler and turbine 

Combustion of 

additional 

biomass 

Selling electrical energy 

to the grid/usage of 

electrical energy for 

irrigation 

Provision of trash 

Trials done at 

Ubombo and 

Simunye 

4 Syrup/molasses 

wash layer 

Less water to evaporate Approx. 40,000 

Euro 

Applicable to all 

mills 

3 . 1 . 3 E n e r g y E f f i c i e n c y b y C h a n g i n g P r o c e s s S t e p s 

3.1.3.1 Boiler Improvements 

The following options are given to increase the efficiency in the boiler: 

1. Installation of a high pressure boiler and replacing the low pressure boiler; 

2. Increasing the caloric value of the bagasse. 

1. Installation of a High Pressure Boiler and Replacing the Low Pressure Boiler 

State-of-the-art boiler pressure in the sugar industry is about 65 bar which leads to an 

increase of electricity generation. The pressure in installed boilers in all mills is 30 bar. 

Currently, all sugar mills are working on different project ideas which shall increase the 

energy efficiency in the boilers. However, due to different conditions each mill needs a 

specific solution. 

Possible options cover the 

1) Upgrade of existing boilers from 30 bar to 45, which would require an investment of 

about 4 million Euro. 

2) Installation of a new high efficient boiler with a pressure of 45 bar including a 

condensate turbine, which would require an investment of about 25 million Euro. 


3) Installation of a new highly efficient boiler, which would require an investment of 

over 50 million Euro for a 100 tonne boiler running with up to 65 bar. 

2. Installation of Bagasse Drying and Pelletizing. 

The calorific value of bagasse relates to the moisture content which is normally around 50%. 

If the moisture content is lower, then the calorific value will increase. Theoretically, the 

calorific value is up to 19 MJ at 100 dry substances (DS). By improving the efficiency of the 

drying process the calorific value of bagasse could be increased. 

Up to now, there is no technical solution for the bagasse dryer in place. This has to be 

developed. 

Table 3.3: Measures to Increase the Efficiency in the Boiler 

Measures Description Effect Cost Status in 

the mills 

1 Increasing of 

the boiler 

pressure 

Upgrade of existing 

boiler and/or 

replacement of the 

existing boilers and 

the turbines 

Increase of 

electrical 

output 

20,000 Euro per 

tonne of steam 

250,000 Euro per 

tonne of steam up 

to 25 million Euro 

Applicable 

to all mills 

2 Increasing the 

calorific value 

of the bagasse 

Drying the bagasse 

Less 

combustion 

of bagasse 

leads to 

equal amount 

of energy 

Research and 

development 

needed 

3.1.3.2 Energy efficiency in the Sugar Processing 

Further optimization possibilities for improving energy efficiency are presented below: 

1. Switch from steam driven engines to electric driven ones: 

The shredders, mills and also the boiler fans are still driven with steam-driven engines 

operating with a steam pressure of 30 bar. 12% of the total steam produced in the boilers is 

required for running the engines instead of generating electricity through the turbines. By 

replacing these engines with electrical engines with undirected frequencies, thermal energy 

will be released that could be used for the process. Exhaust steam from the turbine could be 

used in the evaporation. 


2. Replacement of the Mechanical Mills with Diffuser 

Alternatively to sugar milling the juice can be extracted using a diffuser. The energy demand 

for a diffuser is significantly lower compared to milling lines. Ubombo and Mhlume have 

already partly installed a diffuser. 

3. Increasing the juice temperature 

To reduce the energy demand of the juice clarifier and the first effect evaporator it is possible 

to preheat the incoming sugar juice with exhaust heat. This requires an installation of a heat 

exchanger before the juice clarifier and evaporator. The required heat and surface depends 

on the steam scheme of the respective plant. 

4. Optimising the evaporation station 

Regarding the process step of evaporation numerous measures could be taken in order to 

reduce the energy demand. This, however, already requires detailed engineering out of the 

scope of work at this point in time. Following general measures can be suggested: 

• Utilization of vapours from all evaporator bodies 

• Minimization of evaporator condenser losses 

• Usage of falling film evaporators 

• Installation of a cleaning in place (CIP) system for heaters and evaporators 

• Optimal usage of heating with condensate and crystallization vapour 

• Stepwise flashing of condensate by “condensate cigars”. 

5. Increasing of mash cooling capacities/installation of vertical crystalliser 

A significant potential to save energy in the different sugar plants is to increase the A-sugar 

stream and to reduce the B- and C sugar ratio. As already mentioned, the aim of a sugar 

factory is to produce A-sugar, as B- and C-sugar are not marketable. All fractions undergo 

the same process up to the point of the centrifuge. After that stage the B- and C- sugar are 

melted and re-fed into the process. The ratio between the different fractions can be improved 

by installing a mash cooling or a vertical crystallizer. Therefore, the extension of the cooling 

capacities and/or the utilisation of a vertical crystalliser are an efficient way to reduce the 

energy demand due to the reduced back-flow of the melted sugar. 

Under optimal conditions up to 3% of the energy demand of the sugar factory can be saved. 

6. Replacement of numerous small centrifuges with fewer but significantly 

bigger ones 

As a result of technological innovation it is recommendable to replace the small centrifuges in 

the centrifuge station with significantly bigger ones. The energy demand could be reduced by 

20% per tonne of processed sugar. 


Table 3.4: Measures to Increase the Energy Efficiency in the Sugar Processing 

Measures Description Effect Cost 

1 Replacement of 

steam driven 

engines by 

electrical engines 

Replacement could 

be done: shredder, 

mill and boiler fan 

Optimization of 

the ratio between 

heat and electric 

energy 

Up to 35,000 

Euro/engine 

Applicable 

to mills 

Applicable 

to all mills 


the mechanical 

mills by diffuser 

Technology change Optimization of 

the ratio heat 

and electric 

energy with low 

pressure steam 

Applicable 

to Simunye 

3 Increasing of the 

inlet temperature 

of the sugar juice 

by a pre-heater 

in front of the 

juice clarifier and 

the 1. effect 

evaporator 

Installing additional 

falling stream heat 

exchanger for the 

juice pre-heating 

Reduction of the 

energy demand 

of the evaporator 

Up to 320,000 

Euro 

Applicable 

to all mills 

4 Optimisation of 

the evaporator 

unit 

Optimisation of the 

equipment 

Reduction of 

steam demand 

Following 

detailed 

Engineering 

Applicable 

to all mills 

5.1 Increasing mash 

cooling 

capacities 

Installing additional 

cooling equipment 

Reduction of the 

B- and C-sugar 

loop 

Approx. 

75,000 Euro 

per cooler 

Applicable 

to all mills 

5.2 Installation of 

vertical 

crystallizer 


numerous small 

centrifuges by 

significant bigger 

ones 

Reducing up to 

3% of the energy 

demand in the 

raw house 

Reduction of up 

to 20% of 

electrical 

demand at the 

total electrical 

consumption of 

the centrifuge 

station 

Depending on 

the situation in 

the plant 

Applicable 

to all mills 

Applicable 

to all mills 


3.1.3.3 Summary of Energy Efficiency Measures in the Sugar Industry 

In all three mills the following main energy efficiency measures could be implemented: 

Table 3.5: Main Possible Energy Efficiency Measures in the Sugar Industry 

Measure 

Optimization of the 

existing process by 

Optimization of the 

operating model 

Changing inefficient 

process steps by applying 

state-of-the-art 

technologies 

1. Completion of the insulation and closing different 

steam leakages 

2. Installing a frequency converter at the big electrical 

motors 

3. Reducing of leakage current if possible 

1. Installing a central Process Control System 

2. Extension of operating the boiler 

3. Running the centrifuges with a syrup molasses layer 

instead of water 

1. Increasing the boiler pressure where it is feasible 

2. Redesign of the production process under the 

aspects of energy efficiency 

The steam demand in the Swazi sugar mills varies between 480 and 670 tonnes per 1,000 

tonnes of sugar cane. If all possible energy efficiency measures could be accomplished the 

efficiency increase would be up to 50%, as the steam system would be perfectly optimized. 

The steam demand per 1,000 tonnes of sugar cane could be reduced to 300 tonnes of 

steam. This would lead to a decrease of the current production costs by 25%. 

In case all energy efficiency measures proposed would be implemented no imported fossil 

fuels or grid energy for the production process at the mill would be required anymore. 


3 . 1 . 4 E n e r g y E f f i c i e n c y i n I r r i g a t i o n 

Basically, four systems of irrigation are applied in Swaziland, namely drip, sprinkler, centre 

pivot and furrow irrigation systems. A brief description of these four systems is given below: 

Furrow or surface irrigation is a simple, low energy gravity fed system. Uniform flat or 

gentle slopes are preferred for furrow irrigation. On steep land, terraces can also be 

constructed and furrows cultivated along the terraces. In sandy soils water infiltrates rapidly. 

For clay soils, the infiltration rate is much lower than for sandy soils. Furrows can be much 

longer on clayey than on sandy soils. After construction the furrow system should be 

maintained regularly. During irrigation it should be checked if water reaches the downstream 

end of all furrows. There should be no dry spots or places where water stays ponding. 

Overtopping of ridges should not occur. The field channels and drains should be kept free 

from weeds. 

However, though it is relatively simple to manage it is comparatively inefficient and thirsty, 

and it is not a suitable option for sandy or shallow soils. For commercial estates it also has 

the disadvantage of being labour intensive. 

Figure 3.1: Top View and Cross-Section of Furrows and Ridges 

Source: FAO 

Sprinkler irrigation is a method of applying irrigation water in a similar way as natural 

rainfall. Water is distributed through a system of pipes usually by pumping. It is then sprayed 

into the air through sprinklers so that it breaks up into small water drops which fall to the 

ground. The pump supply system, sprinklers and operating conditions must be designed to 

enable a uniform application of water. Sprinklers are best suited to sandy soils with high 

infiltration rates although they are adaptable to most soils. A good clean supply of water, free 

of suspended sediments, is required to avoid problems of sprinkler nozzle blockage and 


spoiling the crop by coating it with sediment. A typical sprinkler irrigation system consists of 

the following components: i) pump unit, ii) mainline and sometimes submainlines, iii) laterals 

and iv) sprinklers. The pump unit is usually a centrifugal pump which takes water from the 

source and provides adequate pressure for delivery into the pipe system. 

Figure 3.2: Sprinkler Irrigation 

Source: Tickie de Beer 

The centre pivot system consists of one single sprayer or sprinkler pipeline of relatively 

large diameter, composed of high tensile galvanized light steel or aluminium pipes supported 

above ground by towers moved on wheels, long spans, steel trusses and/or cables (figure 

16). One end of the line is connected to a pivot mechanism at the centre of the command 

area; the entire line rotates about the pivot. The application rate of the water emitters varies 

from lower values near the pivot to higher ones towards the outer end by the use of small 

and large nozzles along the line accordingly. The centre pivot is a low/medium pressure fully 

mechanized automated irrigation system of permanent assemble. The cost of each system 

unit is relatively high and is therefore best suited to large irrigated farms. The area covered 

can be from 3.5 ha to 60 ha, according to the size of the centre pivot, and the larger the area 

the lower is the cost of the system per unit area. 


Figure 3.3: Centre Pivot Irrigation 

Source: Tickie de Beer 

Drip irrigation involves dripping water onto the soil at very low rates (2-20 litres/hour) from a 

system of small diameter plastic pipes fitted with outlets called emitters. Water is applied 

close to plants so that only part of the soil in which the roots grow is wetted. With drip 

irrigation water, applications are more frequent (usually every 1-3 days) than with other 

methods and this provides a very favourable high moisture level in the soil. Generally, only 

high value crops are considered for drip irrigation because of the high capital costs of 

installing a drip system. Drip irrigation is adaptable to any farmable slope and suitable for 

most soils. One of the main problems with drip irrigation is blockage of the emitters. All 

emitters have very small waterways ranging from 0.2-2.0 mm in diameter and these will 

become blocked if the water is not clean. Thus it is essential for irrigation water to be free of 

sediments. If this is not the case, filtration of the irrigation water will be needed. 

At RSSC drip irrigation applied on 9,500 ha now is the prevalent system. It is being 

expanded at a yearly rate of 500 ha replacing sprinkler systems which, nevertheless, still 

exist on 6,200 ha. Furrow irrigation is maintained at around 4,000 ha. It is the cheapest to 

apply but requires at least twice as much water as drip irrigation. 

At Ubombo, drip irrigation is not favoured because of problems caused by silt in the Usutu 

River water. Ubombo is also renouncing sprinkler irrigation and is expanding the area under 

centre pivots. 

Table 3.6 provides an overview on energy and water consumption per hectare for irrigation at 

RSSC. The table shows that, beside furrow irrigation, drip irrigation is the most economical in 

terms of water and energy followed by centre pivot and sprinkler. 

Several studies and trials verify these results (please refer to annex 5). According to the 

farmers and irrigation experts in Swaziland centre pivot irrigation is the most favoured. 

However, if skilled workers and a proper management are available drip irrigation will be the 

most efficient one. 


Table 3.6: Energy and Water Consumption of RSSC in 2007 

Irrigation type Sprinkler Drip Centre Pivot Furrow 

Energy 

kWh/ha/year 

Water consumed 

cubic m/ha/year 

1,914 1,493.4 1,726.4 0-100 

10,130 8,465 9,118 11,600 

System efficiency 70 n.a. 85 60 

Yield 

tonnes/ha/year 

110 n.a. 120 100 

Source: RSSC 

Trials in irrigation research 21 showed that the average energy demand for sprinkler irrigation 

accounts for 0.85 kW per ha, centre pivot accounts for 0.76 kW and drip irrigation for 0.62 

kW per hectare. 

The table below illustrates the energy saving potential by switching from sprinkler irrigation to 

centre pivot and drip irrigation, respectively. 

Table 3.7: Energy Saving Potential from Sprinkler Irrigation to Other Systems 

RSSC data 

Research data 

From sprinkler to centre 

pivot 

From sprinkler to drip 

irrigation 

10% energy savings 11% energy savings 

22% energy savings 27.5% energy savings 

Source: Tickie de Beer, RSSC 

To place 3,000 hectares of smallholder out-grower farms under a centre pivot irrigation 

system instead of a sprinkler system will result in energy savings of 0.57 GWh/year and per 

hectare. 

21 Irrigation Expert Tickie de Beer 


3 . 2 B i o - E n e r g y i n t h e S u g a r I n d u s t r y 

As discussed in chapter 2 section 2.1, biomass energy sources comprise over 60% of 

Swaziland's total energy consumption. This section describes all organic by-products of the 

sugar industry which could be used for energy generation. Firstly, energy options from sugar 

by-products such as bagasse, molasses (ethanol) and vinasse which are already being used 

in the sugar industry are discussed, followed by residues which are currently not used such 

as waste water, trash and additional biomass options. The section outlines the current use 

and the energy options that have to be analysed in order to undertake a financial 

assessment in a second step. 

It should be emphasized that trash contains an enormous energetic potential which is 

currently still under development in Swaziland. Regardless of the by-product, the most 

important question regarding bio-energy is to secure a steady and sustainable supply of 

biomass requesting sound logistics concepts. 

It must be noted that some of the information the study team received on harvesting and 

handling of trash is regarded as confidential information and is therefore not presented in 

detail in this report! 

3 . 2 . 1 B a g a s s e 

In 2006/07, about 1,373,504 tonnes of bagasse were produced and completely used for 

steam production in the sugar industry. Bagasse is the fibre of the sugar cane which remains 

after the milling process. 

Bagasse covers approximately 85% of the energy demand of all three sugar mills and is 

currently combusted together with coal and small amounts of trash in the boilers. 

Table 3.8: Sugar Mill Production of Bagasse, 2007 

Mill 

Cane processed in 

tonne 

Bagasse produced in 

tonne 

Mhlume 1,292,660 367,715 

Simunye 1,896,825 504,060 

Ubombo 1,886,199 501,709 

Source: RSSC and Ubombo Sugar Limited 

Hence all bagasse is already used for energetic purposes in the sugar industry. The energy 

output could be increased by drying the bagasse as the moisture content is around 50%. 

However, the respective technology is still under development. 


3 . 2 . 2 M o l a s s e s 

Molasses, another by-product in the sugar industry, is used for ethanol production. In 2007, 

the Swazi sugar industry produced 194,539 tonnes of molasses. Only less than 1% of 

produced molasses is sold as animal fodder. RSSC uses the molasses from Mhlume and 

Simunye for ethanol production in its own distillery at Simunye. Ubombo sells the molasses 

to USA distillers for ethanol production. Almost all ethanol produced in Swaziland is sold as 

portable alcohol to the EU, Western Africa and the SACU market. The table 3.9 below shows 

the purchased tonnes of molasses and the average prices. The amount of available 

molasses would only increase in case of an expansion of the sugar production and more 

sugar cane input, respectively. The financial value of molasses increased by 34% within the 

last 7 years. Hence, molasses is not available for energy use as it is currently used as a 

source for ethanol production which is financially more attractive. 

Table 3.9: Sales and Prices of Molasses in Swaziland 2000 – 2007 

Sales in tonnes 

Average Price E per tonne 

2000 156,193 160.00 

2001 163,012 122.82 

2002 167,060 158.62 

2003 180,867 184.08 

2004 210,466 181.24 

2005 204,698 188.00 

2006 203,805 215.00 

2007 199,527 215.00 

Source: SSA 

Molasses could also be used as a substratum for biogas production for energy purposes. As 

all molasses is used for ethanol production, energy use in form of biogas production is 

currently not considered. 


3 . 2 . 3 E t h a n o l 

The current overall potential for producing ethanol from total sugarcane in Swaziland is about 

400 million litres per annum, based on the actual sugar cane production. 

It would easily be possible to meet the E10 22 ethanol requirement using the existing 

molasses feedstock. Its current production (RSSC and USA Distillers) is approximately 60 

million litres hydrous ethanol (96.5% purity), which needs to be converted to anhydrous 

ethanol (99% purity of ethanol). A 10% ethanol blending of petrol for transportation (E10) in 

Swaziland would require approximately 12 million litres of ethanol. 

RSSC produced, blended and dispensed with great success 10,000 litres of E10 fuel to ten 

RSSC vehicles in 2007. These trials are planned to be continued and expanded. (Please 

refer to annex 4: Specification on ethanol as fuel.) 

The Swaziland’s sugar industry has a potential to diversify its commodities by producing 

ethanol as fuel. A decision to develop and implement a project for producing ethanol as fuel 

has to take into consideration the future price developments of fossil fuel, sugar and ethanol 

for the beverage market. According to current technology and prices it can be stated that at a 

sugar price of above 2.59 E per kg sugar it would be more profitable to sell sugar than 

ethanol. 

3 . 2 . 4 V i n a s s e 

Vinasse remains when the ethanol has been extracted from the molasses. Each litre of 

produced ethanol leaves approximately 10 litres of vinasse with a brix of 13%. Vinasse holds 

a COD content of 30,000 mg/l (30 kg per m3) 23 . In Swaziland approximately 600 million litres 

of vinasse were produced in the ethanol production last year. Total vinasse in Swaziland 

contains a biogas potential of 500,000 m3 and more than 950 GJ energy respectively. 

Biogas could be produced by an anaerobic bio digester. Produced biogas contains 

approximately 60-70% of methane which could be used for energy purposes. 

However, the Swazi sugar industry is more interested in evaporating the vinasse up to 40% 

brix to produce the so-called Condensed Molasses Solids (CMS) and to use this as an 

alternative fertilizer as it also contains inorganic chemicals. Nevertheless, as prices for 

fertilizers such as urea and ammonia increased, CMS prices also went up dramatically. The 

tables below illustrate that CMS prices increased by over 166% in the last year and the 

international fertilizer prices (ammonia, urea) by over 206%, respectively. 

22 E10 means an ethanol blending of 10% in petrol. This mixture can be used without requiring motor 

modifications. 

23 Interview with USA Distillers 


Table 3.10: Average CMS Price in August 2007 and October 2008 

August 2007 October 2008 

Average CMS price per tonne in E 451.48 1,201 

Average CMS price per ha In E 2,153 5,628 

Source: Enviro Applied Product, 2008 

Table 3.11: Urea and Ammonia Prices in August 2007 and August 2008 

August 2007 August 2008 

Average ammonia price per tonne in E 1,706 5,761 

Average urea price per tonne in E 2,061 6,322 

Source: SAS Swaziland Agricultural Suppliers, 2008 

In 2005, Ubombo already carried out a CMS study and identified a cost saving potential of 

approximately 320 E per hectare by using CMS instead of granular fertilizer. 

3 . 2 . 5 W a s t e W a t e r 

In all sugar mills waste water is treated in anaerobic and aerobic open lagoons and it is reused 

in the processing and for irrigation purposes. Sugar manufacturing effluents typically 

have a chemical oxygen demand (COD) of 2,300-8,000 mg/l from cane processing. The 

waste water contains a biogas potential of 2.25 m3 biogas per m3 waste water. The 

implementation of an anaerobic digester for waste water treatment and biogas production is 

financially not attractive due to low waste water quantities and low organic content. Each 

sugar mill produces approximately 6,000 m3 waste water per year from sugar production. 

The alternative would be the installation of sealed covers over the existing anaerobic lagoons 

to create an anaerobic digester system. The covers are made of a high density polyethylene 

(HDPE) geo-membrane which can be sealed (e.g. strip-to-strip welding and peripheral 

anchor trench dug around the lagoon perimeter). The HDPE covering captures almost 100% 

of the biogas produced in the lagoons. The captured gas could be transported via pipelines 

and blown into the boiler to increase the energy efficiency. The use of biogas from 6,000 m3 

wastewater would lead to coal savings of approximately 500 kg of coal. In general, prices for 

a HDPE geo-membrane are 5-20 Euro/m2 depending on the quality and specifications of the 

product. 


3 . 2 . 6 T o p s a n d L e a v e s f r o m S u g a r C a n e ( T r a s h ) 

Cane trash comprises the tops and the leaves of green harvested cane and constitutes up to 

40% of the total biomass of sugar cane (see figure 3.4 below). 

In 2006, 50,315 hectares were under sugar cane production in Swaziland. This means that 

10-15 tonnes of trash would have been available per hectare if cane had been green 

harvested instead of being burnt. However, only 7-10 tonnes of trash per hectare can be 

used; the rest has to remain on the field for soil fertility reasons. Hence, a minimum amount 

of 350,000 tonnes of trash would potentially be available. 

Figure 3.4: Sugarcane Biomass Characteristics 

Source: Erlich, C. (2006). Sugar and Ethanol Industries – Energy View, Energy Technology. 

The total calorific value of trash can be estimated at 15 GJ per tonne which is equal to 

approximately 5 MWh per tonne of trash. Hence, 700 GWh of electricity could be generated 

under the assumption of an efficiency of 40% 24 corresponding to a value of 350,000,000 E 

(30.4 million Euro). 

The electricity supplied by SEC costs on average 500 E (43.48 Euro) per MWh. If all 

potential trash from the current 50,000 ha sugar cane fields was used for electricity 

generation, about 70% 25 of the electricity consumption in Swaziland could be covered. This 

amount of electricity generation requires a biomass combustion plant with an installed 

capacity of approx. 90 MWe which would need an investment for boilers and turbines of 

approximately 180 million Euro. 

24 Thermal energy is not considered in that calculation. Therefore an energy efficiency rate of 40% is assumed. 

25 Based on the electricity consumption of 2007, electricity losses are not considered. 


Table 3.12: Potential of Trash for Energy Supply in Swaziland 

Sugar cane 

fields 

Potential 

trash 

NCV 

Potential electricity 

generation (EE = 

40%) 

Electricity is sold 

to SEC (500 E per 

MWh) 

50,000 ha 350,000 

tonnes 

5,250,000 GJ 700 GWh 350,000,000 E 

For the past 3 years the sugar industry has been running trials on trash harvesting and 

combustion of trash. The implementation of this project activity requires special technical 

equipment and methods for “green harvesting”. The additional costs also include labour and 

fuel demand for the equipment. Modifications are necessary at the plant and boiler feed 

system to utilise cane trash. The cane trash preparation plant includes a grinding station 

where trash bales are shredded, and a conveying system that mixes the trash into the 

bagasse for combustion in the boilers. 

Trash recovery and preparation still requires research and practical trials. The combustion of 

trash also needs long-term trials for analysing the technical applicability (e.g. corrosion 

problems in the boilers, ash melting point, NO2 emissions etc.). Current results from the trials 

indicate that the mixture ratio of cane trash to bagasse burning in the existing boilers is a 

serious challenge. At present a maximum of about 10% of cane trash can be used. As the 

trials are still ongoing the financial implications of such a project are still difficult to account. 

However, the Swazi sugar industry plans to use trash as an additional biomass fuel for its 

own energy generation. RSSC aims to use 90,000 tonnes while the total amount of trashed 

envisaged to be used at Ubombo are still confidential at this stage. Nevertheless, both sugar 

companies would be able to substitute coal by using trash as an alternative and renewable 

fuel. It is currently intended by both companies to combust trash up to an amount of 10% 

and to burn it together with bagasse. Surplus electricity could be exported to the national 

grid. 

Of course also the possibility exists to combust trash as a pure fuel source, i.e. without 

mixing it with bagasse or coal. This, however, requires the installation of specific boilers 

made of stainless steel. Especially, in case the sugar industry would look at electricity as a 

new commodity, and large-scale electricity production from trash would be taken into 

account, specific technology is needed. 

There is a third opportunity for using the sugarcane residues. As the combustion of trash 

offers technical challenges mainly due to ash slagging, the application of a fermentation 

technology could also be considered. An alternative project idea is the establishment of a 

biogas facility. Any type of organic material can be used as a substratum which includes: 

waste water, molasses and trash. The ash problem does not occur within the fermentation 

process of trash. However, biogas technology requires a special mixture of input materials to 

nurse an optimal bacteria culture. In case only trash will be used as input material some 

manure and /or green cut have to be integrated in the input mixture. The bacteria culture is 

the core of the fermentation process and hence for the biogas production. The operator 

needs to pay attention to it as the bacteria are sensitive regarding input materials and 


temperature. Every time a biogas plants is shut down the bacteria culture has to be build up 

again which could require more than 6 months. As sugar is a seasonal product biogas 

technology is only suitable for a full year operation time, hence additional organic material 

has to be available. The biogas technology is more expensive in investment costs and only 

competitive in case heat/cooling and electricity are used in combined heat and power 

stations. 

3 . 2 . 7 E n e r g y P l a n t a t i o n 

Marginal land which is currently not under use qualifies for the establishment of energy 

plantations (e.g. short-term rotation energy plantation, oil crops such as castor bean or 

jatropha) in order to produce additional biomass for energetic utilisation. In case fossil fuel is 

replaced co-financing opportunities from CDM exist. 

In general two options are feasible: 

I. Stationary use: combustion of additional solid biomass (wood) or pure plant oil (PPO) 

for thermal and electricity generation; 

II. 

Mobile use: production of plant oil for transportation. 

The stationary use of wood fuel from energy plantations is comparable to the energy use of 

trash. Wood fuel also contains a calorific value of approximately 15 GJ/tonne but can be 

combusted in boilers without technical problems. As short term energy plantations and oil 

crops are not in the scope of the assessment it is not deeply analysed. However, operators 

of the sugar mills and the MNRE showed interest in biofuels for transportation. Therefore the 

production of oil crops for transportation is briefly outlined. 

In case of a mobile use with plant oil the following aspects have to be considered: 

• Land availability: 

Only marginal land which is currently not under agricultural use should be used, and in case 

of oil crops, non edible oil crops should be preferred in order to avoid conflicts and 

discussions on food versus fuel production. 

• Yield (seed, fertilizer, water): 

Capitalising marginal land contains a high risk of low yields. Additional costs for seeds, 

fertilizers and water have to be considered, if significant yields are expected. Therefore, trials 

on available land are recommendable in order to estimate needed amelioration measures. 

Furthermore, drought resistant plants should be considered such as castor bean or jatropha. 


Following example shall provide an idea on potential yields on marginal lands; in which the 

estimation is based on jatropha and castor bean: 

1 ha castor bean = approx. 1 tonne seed = approx. 500 litres castor oil 

1 ha jatropha = approx. 2 tonnes seed = approx. 500 litres jatropha oil 

• Labour availability: 

Jatropha as well as castor bean are quite labour-intensive due to manual harvesting. 

• Engine modification could be required: 

Diesel engines can be operated on PPO with suitable modifications. Principally, the viscosity 

and surface tension of the PPO must be reduced by preheating it, typically by using waste 

heat from the engine or electricity, otherwise poor atomization, incomplete combustion and 

carbonization may result. One common solution is to add a heat exchanger, an additional 

fuel tank for "normal" diesel fuel (fossil diesel or biodiesel) and a three way valve to switch 

between this additional tank and the main tank of PPO. The engine is started on diesel, 

switched over to vegetable oil as soon as it is warmed up and switched back to diesel shortly 

before being switched off to ensure that no vegetable oil remains in the engine or fuel lines 

when it is started from cold again. In colder climates it is often necessary to heat the PPO 

fuel lines and the tank as it can become very viscous and even solidify. In Germany, diesel 

engine modification costs about 5,000 Euro (per truck) due to high labour costs. The required 

technical equipment covers mainly a second tank, tyre-tubes and valves. 

A 2,000 ha castor oil plantation produces 2,000 tonnes of seeds. As the oil content of castor 

beans is 50% and the density of plant oil is 0.92 kg/l, about 920,000 litres of pure plant oil 

can be produced. The energy content of PPO corresponds to 0.96 per litre of diesel fuel; 

hence, 883,200 litre of diesel fuel can be substituted. Regarding a diesel fuel price of 

currently over 10 E, roughly 8,832,000 E for diesel fuel could be saved. 

Table 3.13: Overview on Crop Yield and Fuel Output 

Land 

availability 

Crop Yield (seed)/year PPO in litres Diesel equivalent in 

litres 

2,000 ha Jatropha 4,000 tonnes 920,000 883,200 

2,000 ha Castor 2,000 tonnes 920,000 883,200 


3 . 2 . 8 M i n i S u g a r M i l l s a n d o w n B i o - e n e r g y G e n e r a t i o n 

One of the biggest challenges mentioned in the national sugar adaptation strategy are high 

transportation costs for sugar cane farmers which are located not close enough to the 

existing sugar mills. The RDMU commissioned an expert to assess and analyze the option to 

establish mini-sugar mills. The idea is that farmers produce sugar syrup and transport the 

syrup to the mills. Hence, the implementation of such mini mills would reduce transportation 

costs and a part of the value chain will remain at the farmers. The biggest energy consuming 

production steps such as milling and evaporating would have to be covered in the mini sugar 

mill. 

The combination of mini-sugar mill and a mini biogas plant could be explored to analyze the 

option to generate required energy demand of the mini sugar mill with residues as bagasse, 

waste water and any additional biomass such as trash and organic waste from private 

households. Table 3.14 outlines the main parameters of a mini biogas plant (with a piccolo 

fermenter and a small CHP). It is assumed that the input of organic material is 1 tonne per 

day with a 20% dry substance (DS) and by ¾ biodegradable. Of course the size of such a 

plant can be enlarged. 

Table 3.14: Mini Biogas Plant 

Amount of 

organic material 

(20% DS) 

MWhe per year MWhtherm per year Price in Euro 

1 tonne per day 108 216 100,000 

As outlined above a biogas plant needs to operate the whole year. In case input material as 

trash, manure and other organic material are not available constantly all year round, biogas 

technology is not a suitable option. Additional investigations have to be undertaken in order 

to assess if biogas technology can be seen as a realistic additional alternative for energy 

generation. Following most important factors have to be analysed: 

1) Property rights of land and ownership for a biogas facility (approx. 2,000 m2), 

2) Technical requirements to feed into the national grid (voltage, hertz etc), 

3) Available heat/cooling consumer near by, 

4) Logistics for biomass supply (transportation), 

5) Supply of biomass (amount, type and season) and organic waste management, 

6) Availability of qualified staff. 

The introduction of biogas technology makes only sense in case several small scale biogas 

facilities will be established because the required effort for the biomass and waste 

management could be high. 


3 . 3 O p p o r t u n i t i e s a t N a t i o n a l L e v e l 

The Energy and Carbon team also screened all types of renewable energy and energy 

efficient options at national level outside of the sugar sector. The following section of the 

chapter summarizes the main findings of the current state, projects already undertaken and 

an estimation of future potential. The opportunities are described for each renewable energy 

type. 

3 . 3 . 1 W i n d E n e r g y 

In the years 1999 to 2002 a feasibility study including installation of wind measuring 

equipment was undertaken, which was supported by the Danish Co-operation for 

Environment and Development. Wind measurements have been carried out over a period of 

one year on five sites 26 in Swaziland. 

The findings can be summarized as follows: Swaziland does not offer very good conditions 

for wind energy generation, as the mean wind speed is not very high. Siteki is the best 

location with an estimated energy generation capacity of 1,700,000 kWh with a 1 MW wind 

turbine at 50m hub height which corresponds to a work load of less than 20%. Investment 

costs can be estimated at 1 million Euro per installed MW. In case of an electricity price of 40 

Euro/MWh the annual benefits account 68,000 Euro, only. 

It is recommended to focus on other types of renewable energy as no significant potential 

exists for wind power. 

3 . 3 . 2 S o l a r E n e r g y 

Preliminary indications lead to the conclusion that in principle annual solar capacities are 

very favourable and range between 4 to 6 kWh/m2 per day. 

The MNRE has been involved in a number of initiatives to promote the use of solar energy. 

Between 1992 and 1995 the ministry conducted a pilot project mainly to electrify government 

institutions like schools and clinics without access to grid electricity in rural areas. Several 

street lighting, solar water heating, vaccine and refrigeration were also installed as part of 

this project. Through this project four Photo Voltaic (PV) water pumping systems were 

installed in different regions. Unfortunately, this project was not successful, partly due to 

some technical problems but mainly because of the high theft rate of the systems. 

Other initiatives include the UNESCO funded Mphaphati solar village project conducted in 

1999. The project used PV systems to electrify a primary school at Mphaphati. A 600 W 

capacity was installed and the electricity generated was used for lighting and for various 

audio visual equipments. The total cost of the system, including the equipment and 

26 Sites of wind measurements: Nhlangano, Siteki, Piggs Peak, Luve and Sithobela 


installation, was around 60,000 E. This project was a success but later it was superseded by 

the arrival of grid electricity in the community. 

Besides government initiatives, there are a couple of stand-alone solar home systems owned 

by individuals scattered across the country. These are mainly used for lighting, and to power 

small appliances such as TV, radio etc. A few solar systems have also been used for water 

pumping. Even though solar PV offers a good alternative to grid electricity, the penetration 

rate has been very low for household use in rural communities and this is mainly because of 

the big upfront investment cost required. 

The use of solar energy requires high investments which remain the biggest bottleneck in all 

solar energy projects. Without financial incentives or other co-financing options, solar energy 

seems to be too expensive for domestic use. Currently, there are no solar technologies 

connected to the grid. 

Table 3.15 below outlines two different solar energy projects. One is based on the installation 

of solar panels with an area of 37m2 (based on estimated energy demand for water heating 

in each school) in each school for warm water heating in schools, colleges or hospitals. 

The other project idea presents the installation of a 1kWp for electricity generation. In case 

the building is connected to the public grid, a costly battery system can be saved and 

generated electricity can be fed into the grid directly. 

Following assumptions are considered: 

According to the MNRE each boarding school has an average monthly electricity bill of 3000 

Emalangeni and 43% of this is due to water heating using electric geysers. Hence, the 

current energy demand for hot water is assumed to be 2,745 kWh per month. According to 

the Renewable Energy Association of Swaziland and the experiences in former projects the 

solar radiation in Swaziland is quite favourable lying between 4 to 6 kWh/m2/day. To 

estimate the total collector area required an insolation of 5 kWh/m2/day was applied. The 

efficiency of the solar water heating system is assumed to be 50% and the system is 

estimated to operate for nine months in a year, (estimating only 3 months of overcast). 

Therefore, based on the above assumptions, the solar panel system is estimated to provide 

heat which corresponds to 24.7 MWh thermal energy per year. Hence 11,610 E per year per 

school could be saved because so far the thermal energy is covered by electricity from the 

national grid. Based on this scenario each school could generate and benefit from carbon 

credits of approximately 17.8 CER per year which leads to a co financing of 2.135 E per 

year. The carbon component is too small in order to develop a single CDM project, but if 500 

buildings (including all boarding school, colleges, the university and health centres) will be 

equipped with such panels a CDM component could be considered. The amount of carbon 

credit can only be generated in case thermal demand is covered by electricity from the 

national grid in the baseline scenario. 

Please note that solar water heating makes only sense in case the thermal energy can be 

used directly and if space for the panels and tanks is available. Furthermore, precautions 

against thievery have to be considered. A cash flow for a solar water heating project is 

provided in annex 6. 

The other project case outlines the installation of a 1kWp Photo Voltaic (PV) system. A 

photovoltaic system consists of multiple components, including cells, mechanical and 


electrical connections and mountings and means of regulating and/or modifying the electrical 

output. The feeding of electricity into the grid requires the transformation of direct current 

(DC) into alternating current (AC) by a special, grid-controlled inverter. In a stand alone PV 

system without grid connection the generated power needs to be buffered with a battery. The 

battery system is the most expensive part of a PV system. 

A 1kWp PV system needs approximately 7 to 10 m2 panel area and generates 

approximately 4.5 MWh electrical power per year which lead to energy cost savings of 2,115 

E per year. Following assumptions were undertaken to estimate the energy output: 5 hours 

daily sunshine, 3 months per year overcast, the PV system is estimated with an efficiency of 

30%. The co financing option via carbon credits makes only sense in case at least 3,000 PV 

systems with a capacity of 1 kWp would be installed. 

Table 3.15: Overview on Solar Energy Projects per Unit 

Capacity 

Investment 

costs 

Generated 

heat/electricity 

per year 

Saved 

energy 

costs per 

year 

Carbon 

component 

(CER per 

year) 

Solar water 

heating 

system 

37 m2 84,170 E 24.7 MWh 

thermal energy 

11,610 E 17.8 

PV System 

1 kWp 

(7-10 

m2) 

50,000 E 

without battery 

system 

4.5 MWh 

electrical energy 

2,115 E 3.24 

100,000 E with 

battery system 

Grid connected PV systems are recommended for households and businesses which are 

already connected to the grid. However, feed in policies and regulations still need to be 

negotiated with SEC. Such a programme can enhance the up-take of PV technology while 

increasing the share of renewable energy in Swaziland. 

Solar heating systems perform quite well and are recommended in case thermal energy is 

currently covered by electricity from the national grid. 

3 . 3 . 3 H y d r o p o w e r 

As outlined above, Swaziland has 41 MWe installed capacity of hydro power including the 

new Maguga dam. Hydro power is currently the only renewable energy source connected to 

the grid in Swaziland. 

With the existing information provided by the International Energy Agency (IEA) the following 

preliminary information indicates the hydro potential for the country: 


Table 3.16: Hydro Power Potential in Swaziland 

Potential 

Installed 

capacity 

Running 

capacity 

Gross theoretical potential 440 MW 3800 GWh/a 

Existing capacity 41 MW 100-200 GWh/a 

Economically 

potential 

exploitable 

61 MW 310 GWh/a 

Technically exploitable potential 110 MW 560 GWh/a 

Source: IEA 

The energy department in the MNRE conducted a micro and mini hydro study in 2006 with 

the aim of assessing the potential of micro and mini hydro power generation to reinforce grid 

electrification in the country. The study identified 30 potential sites for power generation with 

capacities between 100 kW and 2 MW. However, the main challenge in further exploitation of 

these sites is the prolonged drought in the country, which means some sites may already be 

less favourable. Currently, only three sites have been approved for further development and 

the ministry is still working on preparing logistics for the commissioning of the preliminary 

feasibility studies on the different sites. The approved sites are Mnjoli dam, Mpuluzi river and 

Lusushwana river. 

3 . 3 . 4 E n e r g y E f f i c i e n c y 

In the late 1990s the government initiated a programme on fuel-efficient stoves. The 

majority of rural households still cooks on an open fire with low end-use efficiency, while 

many higher income rural and peri-urban households tend to use wood in a coal stove which 

requires even more wood than an open fire. The impact on the forest stand is significant as 

fire wood is not sustainably used and the forest area is decreasing in Swaziland. However, 

only a few households benefited from the programme as there was a lack of funds from the 

government to buy and disseminate more stoves. The lack of access to micro-finance for 

women in the country also limited the sustainability of the programme. 

Nevertheless, the use of fuel efficient stoves in rural households would increase the energy 

efficiency by up to 40% and hence contribute to the sustainable use of fuel wood in the 

country. 

The MNRE aims to promote the distribution and use of efficient light bulbs so called 

compact fluorescent light bulbs (CFL). Up to 80% of electricity can be saved by 

substituting a normal 100 W light bulb with a corresponding CFL. Even if it is financially 

attractive to switch the light bulbs the population does not switch easily as the investment 

costs remain the biggest barrier. 


Both described energy efficiency projects need further incentives in order to start and to 

spread the project idea. A new CDM approach called “CDM programme of activities” can be 

applied and included in such a concept (Please refer to chapter 4). 

3 . 3 . 5 B i o m a s s – E n e r g y 

More than 60% of Swaziland's final energy consumption is based on biomass resources. 

Biomass is not only the major fuel in households, but also the major source of electricity 

generation from own resources in the sugar, pulp and saw mill industries. This proves the 

strategic importance of biomass within the national energy balance. The timber and pulp 

industry uses own biomass residues for energy purposes (e.g. Sappi and Piggs Peak). 

Estimations state that the pulp and timber industry used more than 700 TJ of wood waste for 

steam and electricity generation last year. 

Nevertheless, the bio-energy potential in Swaziland is much higher compared to current 

utilization. Following project options are briefly described and should give an idea of potential 

projects ideas. All ideas require more planning especially with regard to: 

a) sustainable biomass supply (type, availability and logistic), 

b) regulations on feed in-tariffs procedures, 

c) applied technology, 

d) assessment for co-financing options (Please refer to chapter 4), 

e) ownership and investment. 

3.3.5.1 Timber Industry Uses Additional Solid Biomass and Energy Plantation 

During the processes of thinning and harvesting in commercial plantation, branches are left 

on the ground to decompose. Additionally, sawmills produce not only bark and sawdust as 

waste but also sweepings, knots, dregs and grits that are usually deposited in landfills. 

The available amount of wood residues has not yet been assessed and is an issue for further 

investigations. The synopsis below gives an impression on the size of plantations and yields 

of the main plantations. However, it has to be stated that the major part of the residues is 

already used. 


Table 3.17: Commercial Forestry Plantations in Swaziland 

Plantation 

Details 

Sappi • 58,000 ha 

• Approx. 1 million m3 of pulpwood harvested per annum 

• 20,000 tonnes/annum of redundant branches 

• 10,230 tonnes/annum of mill wood waste 

Piggs Peak • 25,000 ha 

• Produces 240,000 m3 of saw log and pulpwood per annum 

Shiselweni forestry • 12,500 ha 

• Produces 125,000 m3 of saw log per annum 

Wattle forests • 25,000 ha 

• Naturalised; exists in both managed and unmanaged forms 

• Total production: 150,000 m3 per annum 

Source: Swaziland Investment Promotion Authority (SIPA) 

There is an opportunity for collecting other available biomass e.g. residues that for the time 

being remain in the forests, and additional organic material such as municipal solid waste for 

combustion. Additionally, it can be considered to establish energy plantations with short 

rotation crops for biomass supply. Like the sugar industry, the pulp and paper industry can 

upgrade existing boilers in order to generate more electricity for export to the national grid. 

Due to the lack of information on feed-in regulations and tariffs as well as on harvesting, 

transportation and processing costs no preliminary economic assessment can be done. 

Peak Timbers plans to collect additional biomass for its own electricity demand and for 

exporting the surplus electricity to the public grid. The project idea is described in a project 

idea note provided in annex 7. 

3.3.5.2 Biofuels for Transportation 

The idea is to produce biofuels on idle land and use it for domestic transportation. Biofuels 

are understood as 1 st generation biofuels such as bioethanol, biodiesel and pure plant oil. 

The project idea is also discussed in chapters 3.2.3 and 4.5. 

The Energy and Carbon team estimates a significant availability of potential land for energy 

plantations. The potential land comprises idle land not under agricultural use, and additional 

land that could be made available by implementing improved pasture management systems. 

On behalf of the MNRE international and local consultants are carrying out a biofuels 

strategy which will be available by the end of 2008. The study will give recommendations on 

how to take advantages of the biofuel potential by considering negative impacts on land use 

changes, the competition of fuel and food crops and maximize the benefit for smallholder 

farmers in rural areas. 


Second generation biofuels like Biomass to Liquid (BTL) and lignocelluloses fermentation are 

not yet proven technologies and need several more years to become operational on 

industrial scale. Estimations on production costs for the second generation biofuels are 

approximately 1.20 Euro up to 1.80 Euro per litre. Therefore, there will not be a financial 

feasible project opportunity for 2 nd generation biofuels in the near future. 

3.3.5.3 Biogas Generation from Landfills, Waste Water Treatment and Animal 

Husbandry 

The Energy department in the MNRE has not been directly involved in the development of 

biogas projects in the country, however, the Women in Development department within the 

Ministry of Regional Development and Youth Affairs has initiated a few biogas projects 

spread across the country in the past years. Experience from these projects shows that 

household biogas units are generally uneconomic to operate. Water is scarce in many rural 

areas and cattle roam freely in the summer months, thus making it difficult to get enough 

dung for biogas feedstock. Moreover, international experience has shown that biogas 

digesters are quite complex to operate, require a fairly precise mix of feedstock and water, 

and require relatively high investment costs which will be an obstacle for implementation by 

rural households. 

Dung from cattle and pigs farms needs to be collected in order to use it for energy purposes. 

In Swaziland the energy utilisation of dung and residues from chicken farming offers better 

options than cattle due to its location. Dung is centrally collected and available. However, the 

energy potential has never been estimated by now. 

All landfills and municipal waste water treatment facilities in Swaziland are too small in terms 

of waste amount and organic content for recovering biogas from decomposed organic 

material. Hence, required investments exceed the financial benefits. 


4 C O - F I N A N C I N G O F M E A S U R E S F O R 

E N E R G Y S A V I N G S T H R O U G H T H E C L E A N 

D E V E L O P M E N T M E C H A N I S M I N 

S W A Z I L A N D 

The Clean Development Mechanism (CDM) is one of the three flexible mechanisms 

established under the Kyoto Protocol. It offers the opportunity to generate CO2 certificates by 

implementing projects which reduce greenhouse gases (GHG). The certificates can be 

traded and sold internationally in order to co-finance the required investment in a climate 

project. This chapter provides an introduction to CDM and describes the objectives and the 

procedures which have to be followed for the development of a CDM project activity. 

Furthermore, the situation for CDM in Swaziland is described and different CDM project 

options and challenges are outlined. 

A major focus has been placed on identifying CDM project opportunities in the Swazi sugar 

sector, and hence on co-financing energy efficiency and bio-energy investments through 

emission reduction certificates. 

4 . 1 I n t r o d u c t i o n t o C D M 

In Japan, a legally binding set of obligations for 38 industrialized countries and 11 countries 

in Central and Eastern Europe (so called Annex 1 countries) was established in 1997, to 

reduce their GHG emissions to an average of 5.2% below their 1990 levels over the 

commitment period 2008-2012. The so-called Kyoto Protocol sets targets for six main 

greenhouse gases: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), 

hydrofluorocarbons (HFCs); perfluorocarbons (PFCs); and sulphur hexafluoride (SF6). The 

Protocol established three flexible mechanisms designed to help industrialized countries 

(Annex I Parties) reduce the costs of meeting their emission targets by achieving emission 

reductions at lower costs in other countries than they could domestically: 

• International Emission Trading permits countries to transfer parts of their ‘allowed 

emissions’ ("assigned amount units" (AAUs). 

• Joint Implementation (JI) allows countries to claim credit for emission reductions 

that arise from investment in other industrialized countries, which result in a transfer 

of equivalent "emission reduction units" (ERUs) between the countries. 

• The Clean Development Mechanism (CDM) allows emission reduction projects that 

assist in creating sustainable development in developing countries to generate 

"certified emission reductions" (CERs) for use by an investor/buyer. 

The mechanisms give countries and private sector companies the opportunity to reduce 

emissions anywhere in the world, and they can use these reductions for fulfilling their 

emission reduction obligations. Any such reduction, however, should be supplementary to 

domestic actions in the Annex 1 countries. 


Through CDM and JI projects the mechanisms could stimulate international investment and 

provide the financial resources for cleaner economic growth in all parts of the world. The 

CDM in particular aims to assist developing countries in achieving sustainable development 

by promoting environmentally friendly investment from industrialized country governments 

and businesses. 

The CDM is supervised by the Executive Board (EB) which has a mandate to approve 

baseline and monitoring methodologies and accredits independent organizations – known as 

designated operational entities (DOE). The DOE is responsible for validating proposed CDM 

projects, verifying the resulting emission reductions, and certifying those emission reductions 

as CERs. Another key task of the EB is the maintenance of a CDM registry which supervises 

all issued CERs and maintains a CER account for each non-Annex 1 country (e.g. 

Swaziland) hosting a CDM project. In order to participate in CDM, all parties (Annex 1 and 

non-Annex 1 Parties) must meet three basic requirements: 

1. Voluntary participation, 

2. Establishment of a National CDM Authority (DNA), 

3. Ratification of the Kyoto Protocol. 

CDM project eligibility 

The Kyoto Protocol demands several criteria that CDM projects must satisfy. Two critical 

aspects could be broadly described as additionality and sustainable development. 

Additionality: Article 12 of the Protocol states that projects must result in “reductions in 

emissions that are additional to any that would occur in the absence of the project activity”. 

The CDM projects must lead to real, measurable, and long-term benefits related to the 

mitigation of climate change. The additional GHG reductions are calculated with reference to 

a defined baseline. A benchmark analysis is the common indicator to prove additionality. An 

appropriate financial indicator has to be chosen and compared with a relevant benchmark 

value: e.g. required return on capital or internal company benchmark. In reference to figure 

4.1 the project owner could argue that the project activity without carbon revenue is not 

profitable or even profitable but not sufficiently profitable compared with other investment 

alternatives. Whereas by applying for the project as CDM, the carbon revenue makes the 

project attractive relative to investment alternatives. 

Sustainable development: The protocol specifies that the purpose of the CDM is to assist 

non-Annex 1 counties in achieving sustainable development. There is no common guideline 

for the sustainable development criterion and it is up to the developing host countries to 

determine their own criteria and assessment process. The DNA of the host country is 

responsible to check and approve the sustainable development criteria. 


Figure 4.1: Additionality Benchmark Analysis 

Source: UNDP, Guidebook to Financing CDM Projects, 2007 

4 . 2 C D M P r o j e c t C y c l e 

All CDM projects are subject to the same implementation procedure which is known as the 

CDM project cycle. A simplified version of this process is shown in the figure below, mainly 

highlighting the relevant stages, stakeholders and indicating a timeline. 

Figure 4.2: CDM Project Cycle 

Source: UNDP, Guidebook to Financing CDM Projects, 2007 


The first step is the development of a project idea note (PIN) which outlines the project idea 

and the estimated amount of CER which could be generated. 

The most important document in the appliance for a CDM project is the project design 

document (PDD) which describes in detail the nature of the project activity. In the PDD, the 

issues of project additionality and monitoring should be adequately addressed and 

information on the environmental impacts of the project has to be provided. Moreover, prior 

to the PDD development a local stakeholder consultation exercise should be undertaken. 

The PDD should demonstrate that the project allowed for public comments and state how 

these will be addressed by the project. 

The present outline of the PDD is shown in table 4.1. In section C of the PDD the projects 

participants must decide which of the two possibilities for the crediting period they prefer a: 

a) period of maximum10 years, or 

b) period of maximum 7 years with the potential for renewal at most for two 

additional 7 year periods (a maximum of 21 years). 

The baseline (scenario and emissions; section B) is the core of a PDD. It describes and 

determines the scenario that reasonably represents GHG emissions that would occur in the 

absence of the proposed project activity. 

Table 4.1: Required Content of a Project Design Document (PDD) 

Section A 

Section B 

Section C 

Section D 

Section E 

Section F 

Section G 

Annex 1 

Annex 2 

Annex 3 

General description of project activity 

Application of a baseline methodology 

Duration of the project activity/crediting period 

Application of a monitoring methodology and plan 

Calculation of GHG emission by sources 

Environmental impacts 

Stakeholders´ comments 

Contact information on participants in the project activity 

Information regarding public funding 

Table: Baseline data 

Source: UNFCCC, by consultants 

The PDD must be sent to the DNA to receive a letter of approval (LoA). The approval from 

the DNA confirms that the project activity assists in achieving sustainable development in the 

host country. 

The PDD is then submitted for validation by a Designated Operational Entity (DOE), which is 

an independent third party entity approved by the Executive Board (EB). The validation 


process mainly involves a review of the project information as provided in the PDD, a 30 

days stakeholder consultations process (this is done by publishing the PDD on the UNFCCC 

website and invites comments from all interested parties) and a site visit. Following a 

successful validation the DOE presents a validation report, and the project will then be 

submitted to the EB for registration. The validation report mainly indicates whether the 

project, as expressed in the PDD, meets the Kyoto Protocol criterion and all stipulated CDM 

procedures. The project registration serves as a formal acceptance by the EB of a validated 

project activity as a CDM project. 

After the project activity has been implemented, the project owner has to ensure that all 

monitoring procedures as identified in the PDD are undertaken and a periodic (mostly 

annual) monitoring report is produced which is submitted for verification to the DOE. 

Verification is basically a proof of the monitored emission reductions which authenticate the 

data collected as the monitoring plan and conducted by a field visit by the DOE. The DOE 

summarizes the results in a verification report. 

Subsequently, the DOE submits a verification report to the EB which is a formal confirmation 

that emission reductions were actually achieved. In the final phase of the cycle the EB can 

issue the CER to the project. 

Transaction costs 

Transaction costs are costs that arise from initiating through completing transactions to 

generate CERs. This kind of costs consist of upfront costs, implementation costs (i.e. costs 

spread out over the entire crediting period), and trading costs. Table 4.2 provides a summary 

of these costs and the estimated cost per transaction. Upfront costs include direct expenses 

for the development of the project document (PDD), negotiations, validation, and approval. 

Implementation costs include costs incurred for monitoring, verification and issuance fee 

while trading costs are those incurred in trading CERs such as brokerage costs and costs to 

hold an account in national registry. Several studies show that the transaction cost per tonne 

of CO2 for large projects is very small or even negligible while that for small-scale projects is 

quite significant. Given this, it becomes obvious why investors prefer large-scale projects. 


Table 4.2: Description of Transaction Costs 

Transaction 

component 

Description 

Estimated 

costs in Euro 

Negotiation costs 

Includes those costs incurred in the 

preparation of the PDD that also 

documents assignment and scheduling 

of benefits over the project time period. 

It also includes expenses in organizing 

public consultation with key 

stakeholders 

Upfront 

costs 

Baseline 

determination, 

PDD 

development 

Development of baseline, application of 

methodology and development of 

monitoring methodology 

20,000 – 50,000 

Approval costs Costs of authorization from host country Depending on 

host country 

Validation costs 

Costs incurred in reviewing and revising 

the PDD by DOE 

15,000 – 20,000 

Registration 

costs 

Registration by UNFCCC EB 

Depending on 

amount of CER 

Monitoring costs 

Costs to collect data 

Operational 

Phase 

Verification costs 

Issuance costs 

Costs to hire a DOE and to report to the 

UNFCCC EB 

Costs for issuance of CERs by 

UNFCCC EB 

10,000 – 15,000 

Depending on 

amount of CER 

Transfer costs 

Brokerage costs 

Trading 

Registration 

costs 

Costs to hold an account in national 

registry 


4 . 3 C D M i n S w a z i l a n d 

The Clean Development Mechanism (CDM) is applicable in Swaziland as a host-country 

since Swaziland ratified the Kyoto Protocol in January, 13, 2006. The Designated National 

Authority (DNA) has already been established and is based within the Ministry of Public 

Works and Transport. The contact person in the DNA office is Mr. Emmanuel Dumisani 

Dlamini. However, since the DNA office is still at its early implementation stage, so far neither 

detailed guidelines regarding the approval process nor sustainability guidelines have been 

published. As Swaziland does not yet have any practical experience on approval procedure it 

is difficult to estimate respective timelines. 

However, according to Mr Dlamini the approval procedure consists of two major 

consultations. Depending on the type of the CDM project the first consultation will take place 

between the DNA and the related ministry in charge (e.g. MNRE) in order to verify whether 

the projects fulfils national interests. The PDD is also submitted to the Swaziland 

Environmental Authority (SEA) a parastatal organisation within the Ministry of Environment. 

SEA verifies that the CDM project follows the environmental sustainability criteria of 

Swaziland and has a positive environmental impact. A positive consultation leads to the 

issuance of a letter of approval (LoA) by the DNA. So far the Swazi DNA does not charge 

any fees for the issuance of a LoA. 

Figure 4.3: Main Stakeholders in the CDM Approval Process in Swaziland 

DNA 

Meteorological Department 

Mr. Emanuel D. Dlamini 

Related Ministry 

(check on national interest 

and goals) 

Swaziland Environmental 

Authority 

(check on EIA) 

So far one CDM project located in Swaziland is under preparation. The PDD of the project: 

RSSC (Royal Swaziland Sugar Corporation) Fuel Switching Project was published October 

2, 2008 on the UNFCCC website 27 . The project is currently under validation by SGS and 

aims to switch from coal to trash for energy generation in the sugar processing. A LoA from 

the Swazi DNA has been requested. 

27 http://cdm.unfccc.int/Projects/Validation/DB/KKL3GHXCQL0RAHZ9TBZEKE3XBUZ5D1/view.html 

(22 October 2008) 


4 . 4 C D M P o t e n t i a l i n t h e S u g a r I n d u s t r y 

In general, the study team identified three basic project opportunities within the Swazi sugar 

industry that have the potential to be developed under the CDM: 

• Energy efficiency measures in a sugar mill in order to reduce coal input, 

• Fuel switch by substituting coal with trash, 

• Renewable energy (based on trash) to the public grid. 

The following sections of the chapter briefly outline these three project concepts. 

All other project options in the sugar industry mentioned in chapter 3 such as 

• Energy efficiency measures in irrigation, 

• Energy efficiency in housing on the compound of the sugar plant, 

• Renewable energy for housing, 

• Plant oil for transportation, 

proved to be too small in terms of carbon revenues to cover transaction costs of a CDM 

project. The projects are briefly outlined below. 

Energy efficiency measures in the irrigation system 

As mentioned in chapter 3.1.4 a sprinkler irrigation system requires an electricity demand of 

approximately 1,914 kWh per ha per year compare to 1,726 kWh per ha per year under a 

centre pivot system. Hence, the switch from sprinkler to centre pivot irrigation would save 

10% of electricity and 188 kWh per ha per year respectively. Assuming a grid factor of 720 

tCO2 per GWh, the reduction of an electricity demand from the national grid due to a switch 

of the irrigation system would result in a CO2 emission mitigation of 0.14 tCO2 per ha per 

year. Over 70,000 ha have to be transformed from sprinkler to centre pivot irrigation in order 

to reach a minimum size of 10,000 CER per year which would be reasonable to develop a 

CDM project in order to cover transaction costs. 

Energy efficiency in housing 

The project idea involves the replacement of incandescent light bulbs with compact 

fluorescent lamps (CFLs) in households at the compound of the sugar plant. It is assumed 

that 100W incandescent light bulbs are currently used and replaced. The replacement of a 

100W incandescent light bulb with a corresponding 20W CFL, saves 80W/h and this is about 

80% of the energy consumed. The annual electricity savings sum up to 102 kWh, under the 

assumption of an operation time of 3.5 hours per lamp per day and 365 days per year. 

Assuming a grid factor of 720 tCO2 per GWh, each CFL reduces 0.07 t of CO2. To generate 

at least 10,000 CER per year about 150,000 CFLs have to be replaced which is not realistic 

within the sugar industry. 


Renewable energy for housing 

A possible renewable energy alternative for housing is the instalment of solar panels for hot 

water or PV systems for electricity generation. As outlined in subchapter 3.3.2, solar projects 

under CDM require a high number of units (500 each 32 m2 units of solar panels or 3,000 PV 

each 1 kWp systems) in order to reach a reasonable size. 

Plant oil for transportation 

The project idea outlined in chapter 3.2.7 covers 2,000 ha used for plant oil production on 

idle land on the sugar estates. 883,200 litres of diesel could be substituted within the sugar 

mill. The replacement of 883,200 litres fossil diesel would avoid approximately 2,300 t of 

CO2. By applying the approved CDM methodology 28 , all upstream emissions which occur 

through cultivation (fertilizer appliance, transportation), transportation from the field to the mill 

and to the distribution place and in the milling process, have to be considered. All upstream 

emissions have to be determined and subtracted from the baseline scenario. According to 

the strength of past experience at least 40% of emissions have to be subtracted as project 

emissions which lead to an emission reduction of less than 1,400 tCO2 per year. 1,400 tCO2 

correspond to 1,400 CER which is definitely too small to justify transaction costs. 

However, it must be noted that even without co-financing through carbon certificates the 

Swazi sugar industry should consider this opportunity as it provides several advantages. 

There would be considerable cost savings from avoiding the purchase of diesel. Additionally, 

as most of the work has to be done by manual harvesting such an initiative offers new job 

opportunities which, for example, could be offered to workers who might lose their 

employment in case mechanical cane harvesting is introduced on a larger scale. 

4 . 4 . 1 E n e r g y E f f i c i e n c y t o A v o i d C o a l I n p u t 

In general, all activities which lead to less energy consumption while providing the same level 

of energy service are comprised under the term energy efficiency. Currently, under normal 

production conditions the Swazi sugar companies need approximately 62,000 29 tonnes of 

coal per year. 

All three sugar mills in Swaziland provide a potential to improve the energy efficiency by 

reducing their steam and electricity demand and by optimizing the boilers. Technical options 

were summarized in chapter 3.1.3.3. 

28 AMS III T: Plant oil production and use for transport applications; further information available under: 

http://cdm.unfccc.int/methodologies/SSCmethodologies/approved.html . 

29 Coal consumption assumed (refer to coal consumption 2005-2007): Simunye: approx. 20,000 tonnes per year; 

Mhlume: approx.32,000 tonnes; Ubombo: 10,000 tonnes 


Description of a possible CDM project 

CDM project idea: 

The project activity comprises energy efficiency measures implemented at a sugar mill plant 

in Swaziland in order to optimize the steam system. Activities could include energy efficiency 

measures such as the installation of new efficient high pressure boiler including economizer 

and air pre-heater, and upgrades of existing boilers. Additionally, activities to reduce steam 

demand could be undertaken as switching steam-driven engines to electrical engines and 

closing of isolation leakages. The electricity demand could be reduced by a replacement of 

several small centrifuges with a single bigger centrifuge and by implementing frequency 

converter at the big engines. 

Baseline: What would happen without the CDM project activity 

The existing sugar mills generate their steam and electricity generation with an energy mix 

consisting of bagasse and coal. As energy generation of bagasse is renewable only the 

avoidance of coal generates carbon certificates. Hence in the non-renewable baseline 

scenario 62,000 tonnes of coal are combusted corresponding to CO2 emissions of 146,630 

tCO2 30 . In other words each combusted tonne of coal leads to an emission of 2.365 tCO2. 

Emission reduction: 

As illustrated in figure 4.4, emission reductions result from the difference between the 

baseline emissions and GHG emissions after implementing the CDM project activity (project 

emissions). 

In the proposed CDM project idea the non-renewable baseline emissions comprise 146,630 

tCO2 per year due to coal combustion. The project emissions cover: any fossil fuel 

consumption still needed in the steam generator and any emissions from additional electricity 

or fossil fuel consumption due to the project activity. 

At this stage detailed project emissions cannot be estimated, therefore 10% of the emissions 

are estimated as project emissions assuming a conservative approach. 

Figure 4.4: Emission Reduction in a CDM Project 

30 IPCC (2006) published the emission factor for bituminous coal and states a default value of 94,600 kg CO2 

per TJ. A calorific value of 25 GJ per tonne of coal and an annual consumption of 62,000 tonnes of coal are 

assumed. 


The proposed project activity would generate 131,967 CER per year which correspond to 

approx. 1,319,670 Euro annual revenues from carbon credits in order to co-finance the 

required investments in energy efficiency at the three mills. 

The table below summarizes the main estimates regarding such an energy efficiency project 

referring to one tonne of coal. The total benefit is summed up to 100 Euro per avoided tonne 

of coal. The minimum size of such a project should avoid 7,000 -10,000 tonnes of coal. 

Table 4.3: Estimates on CDM Project: Energy Efficiency to Avoid Coal Input 

Baseline emissions 

Emission reduction 

Carbon revenues 

Project lifetime 

Additional benefit 

2.37 tCO2 per tonne of coal 

2.13 tCO2 per avoided tonne of coal 

Approx. 20 Euro per year per avoided tonne of coal 

10 years, corresponding to 200 Euro revenue per avoided 

tonne of coal 

Saved coal purchase costs approx. 80 Euro per year per tonne 

of coal 

Financial assessment: 

Following table outlines a brief financial assessment assuming a CDM project activity which 

includes energy efficiency measures of 15 million Euro to avoid 30,000 tonnes of coal. 

A CDM project lifetime of 10 years is assumed. The emission reductions are estimated with 

63,900 CER per year. A selling price of 10 Euro per CER is assumed which corresponds to 

annual revenues of 639,000 Euro and 6.39 million Euro revenues for the full 10 year project 

lifetime, respectively. Due to the efficiency measures 30,000 tonnes of coal can be avoided, 

assuming a coal price of 80 Euro per tonne, 24 million Euro can be saved. On the other hand 

245,309 Euro of transaction costs are considered due to the CDM project development and 

running costs. 

The analysis shows that the internal rate of return (IRR) with a CDM component is 13.05% 

and without CDM revenues it is 8.7%. Assuming a discount factor of 8%, the net present 

value (NPV) clearly presents that the project activity is financially attractive due to carbon 

revenues. Annex 8 provides cash flows for further information. 


Table 4.4: Financial Assessment of Energy Efficiency Project to Avoid Coal with and 

without CDM Component in Euro 

With 

CDM 

Without 

CDM 

Carbon 

revenues 

Saved 

energy 

costs 

Investment 

CDM 

transaction 

costs 

IRR 

NPV 

(interest 

rate 8%) 

6,390,000 24,000,000 15,000,000 244,530 13.05% 3,447,484 1.28 

C/B 

24,000,000 15,000,000 8.70% 432,000 1.03 

Next steps: 

1) A detailed technical planning has to be undertaken in order to identify suitable energy 

efficiency measures, to prove the financial viability and to plan the implementation of such a 

project activity. 

2) CDM steps: 

• Development of a PIN in order to request a LoE from the DNA 

The LoE proves that the project activity was initially planned as CDM project and 

indicates that the project activity complies with requirements of sustainability criteria 

of the host country. 

• Assessment of adequate CDM methodology, 

• Development of a PDD, 

The development of a PDD is required in order: 

a. to ask for a LoA from the host country, 

b. validate the project activity by a DOE, 

c. register the project at UNFCCC. 

Once the project is registered by UNFCCC, the PDD does not have to be adapted to new 

versions of the applied methodology. That reduces the risk of additional transaction costs. 

Reference to the situation in Swaziland: 

The proposed project option is applicable to all sugar companies. Under a climate 

perspective the project does not face big barriers. The proposed project is summarized in a 

Project Idea Note in annex 11 (Project Idea Note: Energy Efficiency Measures in the Sugar 

Processing to Avoid Coal Input at RSSC, Swaziland). 

The PIN was already submitted to the Swazi DNA in order to get a letter of endorsement 

(LoE). 


4 . 4 . 2 F u e l S w i t c h S u b s t i t u t i n g C o a l w i t h T r a s h 

The project concept describes the switch from fossil-based energy to renewable energy 

generation. RSSC undertakes such a project opportunity which has been developed as CDM 

project, and, as already mentioned, the PDD is under validation. In the following the RSSC 

project idea is outlined. 

However, Ubombo is also preparing such a project already. The company has been running 

its trash harvesting and combustion trial for two years and is ready to implement the project 

under the CDM. 



The project foresees investments to replace the use of coal in a sugar mill by sugar cane 

trash (tops and leaves) that is currently burned in the field. The Mhlume and Simunye sugar 

mills of RSSC burn significant amounts of coal, particularly in the off-season, to meet their 

energy demands. It is current practice to burn the cane in the field before harvesting. The 

proposed project will make use of green harvesting techniques using chopper harvesters. 

The cane trash will be baled and collected in the field, transported to the mill, and ground in a 

tub grinder to make it suitable for use as a fuel. This cane trash will then be fed into a multifuel 

boiler as a supplementary fuel source to the bagasse. The project aims to replace 100% 

of the coal currently used at both mills and thus reduce the corresponding GHG emissions 

associated with coal combustion. 

On average, the sugar industry in Swaziland consumes at least 52,000 tonnes of coal per 

year in case ongoing trash trials are considered. Assuming the same efficiency rate of coal 

and trash combustion (as the same boilers are used) and considering a calorific value of 25 

GJ per tonne of coal and 15 GJ per tonne of trash, approximately 87,000 tonnes of trash 

have to be burnt in order to substitute the 52,000 tonnes of coal. Hence, 8,700 ha of sugar 

cane fields have to be green harvested. 

It is assumed that modifications have to be undertaken in the boilers, the feed system of the 

mill and for the provision of additional storage space. Hence additional costs of 1.5 million 

Euro are assumed. However, big investments have to be undertaken for equipment to 

harvest the trash and operational and maintenance costs will increase significantly. The 

additional costs are described in the financial assessment below. 


In the baseline scenario the operation continues with the existing boiler(s) using the same 

fuel mix or less biomass residues as in the past and the biomass residues (trash) are burnt in 

an uncontrolled manner without utilizing them for energy purposes. Assuming a coal 

consumption of 52,000 tonnes of coal the baseline emissions are approximately 123,240 t 

CO2. 


Project emissions, which have to be considered and subtracted from the baseline emissions, 

include CO2 emissions from fossil fuel and electricity consumption that is attributable to the 

project activity (equipment for harvesting), CO2 emissions from transportation of biomass 


esidues to the mill that are combusted in the boiler(s). Project emissions are estimated with 

20%, hence the emission reduction is estimated with 98,800 tCO2. 

Table 4.5: Estimates on CDM Project: Fuel Switch from Coal to Trash 






Additional O & M 

costs 

Investment in 

harvesting equipment 

2.37 tCO2 per tonne of coal 

1.90 tCO2 per avoided tonne of coal 

Approx. 19 Euro per year per avoided tonne of coal 

10 years, corresponding to 190 Euro revenue per avoided tonne of 

coal 

Saved coal purchase costs approx. 60 - 80 Euro per year per 

tonne of coal 

Approx. 333 Euro hectare 

Approx. 300,000 Euro per chopper which could cover maximum 

500 hectare 

Financial Assessment: 

The financial assessment is based on RSSC data which resulted from an ongoing pilot 

project. Capital expenditures which have to be undertaken in order to provide trash as 

burning material are the choppers (250,000 USD/each), collection equipment (124,114 

USD/per chopper) and trash processing equipment (45,098 USD/per chopper). 18 choppers 

are required in order to harvest and collect the needed amount of trash and 1.5 million Euro 

are needed in order to modify the boilers, feed system and storage capacity which result to 

total investment costs of about 4.7 million Euro. According to RSSC operation and 

maintenance costs sum up to 3,175,000 Euro per year for transportation of trash from the 

field to the mill, costs related to choppers and harvesting and soil preparation. 

Due to the combustion of trash 52,000 tonnes of coal can be avoided. Under the assumption 

of a coal price of 80 Euro per tonne of coal the project is financially attractive. Assuming a 

project lifetime of 10 years and a coal price of 80 Euro per tonne the IRR, even without a 

CDM component, is 16.3%. 

Following table outlines the main financial indicators assuming a coal price of 70 Euro per 

tonne of coal. The table shows that in case of a coal price of 70 Euro the project is only 

financially feasible if a CDM component is included. A sensitivity analysis showed that the 

IRR decreases below 10% in case of a coal price of 75 Euro per tonne without CDM 

component and in case of a CDM component the coal price has to be at least 60 Euro per 

tonne in order to reach an IRR of 10%. 

Annex 9 provides a cash flow and undertaken assumptions for further information. 


Table 4.6: Financial Assessment of Fuel Switch Coal to Trash Project in the Sugar 

Mills with and without CDM Component in Euro 

Carbon 

revenues 

Coal 

savings 

Investment 

O & M 

costs 

CDM 

transaction 

costs 

NPV 

(interest 

rate 8%) 

IRR 

With 

CDM 

Without 

CDM 

9,880,000 36,400,000 4,697,163 31,971,630 141,560 4,129,958 23% 

36,400,000 4,697,163 31,971,630 1,460,025 0.18% 

Next steps: 

As the RSSC CDM project is already under validation in the next stage: 

• The project owner or the project developer requests a LoA from the Swazi DNA. 

• The PDD will be submitted to the EB and requests for registration. 

A similar project at Ubombo would have to go through the complete development and 

registration process. 


The proposed project option is applicable to both sugar companies and, as mentioned for the 

energy efficiency project, under a climate perspective the project does not face big barriers. 

The two project ideas could even be combined if coal is partly avoided by energy efficiency 

measures and partly by fuel switch. 

If RSSC implements the planned CDM project an energy efficiency project that generates 

emission reductions from avoiding coal consumption will no longer be possible. 

However, if a sugar company has not already started any project according to logical and 

economical considerations CDM project measures should start with energy efficiency. 

Project A (energy efficiency 4.4.1) avoids import and utilization of coal through implementing 

energy saving measures as described before. Project B (fuel switch 4.4.2) then could make 

maximum use of using trash for generating electricity for the national grid as described below 

(refer to subchapter 4.4.3). 


4 . 4 . 3 R e n e w a b l e E n e r g y t o t h e G r i d 

The project type covers the generation of renewable electricity based on hydro, wind, solar or 

biomass which is fed into the national grid. The renewable energy option within the sugar 

industry is focused on biomass namely trash. The basis calculation of the emission reduction 

is the difference between the amount of emissions which occurred by generating electricity 

provided by the grid and the occurred emissions from the renewable electricity which is fed 

into the grid. 

The benefits which arise by such a project are obvious: local renewable energy sources are 

used for domestic energy supply. It fosters the national goals to increase the renewable 

energy use and decreases the carbon footprint; it generates a new commodity and a new 

value chain, and Swaziland becomes less dependent on South African electricity imports. 



In the meantime the ongoing trials on trash handling are resulting in financially feasible 

options to harvest and provide trash as fuel. The idea of the project is to capitalize the trash. 

Each hectare provides around 10 tonnes of the renewable material which can be sustainably 

used without leading to negative effects on the fertility and water storage capacity of the 

soils. There is obviously a high technical potential for the sugar industry to considerably 

contribute to the national energy supply. 

The additional combustion of trash on a large scale leads to a surplus of electricity that can 

be exported to the national grid. Existing boiler equipment has to be upgraded and/or 

replaced by very efficient state-of-the-art biomass boilers and efficient turbines. 

A minimum of approx. 15,000 tonnes of trash and a biomass boiler with an installed capacity 

of 2 MW are required in order to provide 16.4 GWh per year. In case the project is not 

located at the compound of the sugar mills, a minimum investment of 4 million Euro is 

required for boiler and turbine equipment. An available heat or cooling consumer at the 

location where the electricity generation takes place would increase the efficiency from 40 to 

80% as otherwise the energy content of the exhaust heat will be lost. 


The electricity supplied by the Swazi grid will remain as it is. 80% of the electricity is 

generated and imported from South Africa and the remaining 20% are generated by hydro 

power. The provision of trash is highly innovative, the GoS does not provide any incentive 

system to foster renewable energy, and SEC does not offer a feed in-tariff system or a 

regulation. The required investments are relatively high as a biomass boiler with an installed 

capacity of 2 MWe requires approximately 4 million Euro investment. The baseline emissions 

which occur by the generation of 16.4 GWh correspond to 11,808 tCO2 per year 31 . 

31 Assuming a national grid factor of 720t CO2 per GWh. 



Project emissions, which have to be considered and subtracted from the baseline emissions, 

include CO2 emissions from fossil fuel and electricity consumption that is attributable to the 

project activity (equipment for harvesting), CO2 emissions from transportation of biomass 

residues to the mill that are combusted in the boiler(s). Project emissions are estimated with 

20%, hence the emission reduction is estimated at 9,446 tCO2. 

The table below outlines the main estimates regarding the CDM benefits. All calculations 

are based on the so called national emission grid factor of Swaziland. The 

determination of that grid factor follows a defined guideline provided by the EB. The current 

guideline is not applicable to Swaziland. Hence the following calculations and estimation of 

potentials are carried out under the assumption of a grid factor of 720 tonnes CO2 per GWh. 

The methodological problem related to the grid factor is discussed in section 4.6.1. 

Table 4.7: Estimates on CDM Project: Trash to Grid 






Additional O & M 

costs 

Investment in 

harvesting equipment 

720 tCO2 per exported GWh 

576 tCO2 per exported GWh 

Approx. 5,760 Euro per year per exported GWh 

10 years, corresponding to 57,600 Euro revenues per exported 

GWh 

Sold electricity to SEC (MWh = 470 E); 470,000 E per exported 

GWh 

Approx. 333 Euro hectare 

Approx. 300,000 Euro per chopper which could cover 500 hectare 


Following table 4.8 outlines a summary of a brief financial assessment assuming a CDM 

project activity with an investment of 4 million Euro for a 2 MW biomass plant, additional 

required equipment for a feeding system and a storage facility. Additional investment costs 

were estimated as followed with reference to the pilot project of RSSC. As capital 

expenditure the investment in 5 choppers (250,000 USD each), collection equipment 

(124,114 USD per chopper) and trash processing (45,098 USD per chopper) is required. 5 

choppers are needed in order to harvest 15,000 tonnes of trash on at least 1,500 ha. 

According to RSSC operation and maintenance costs are estimated as follows: 

transportation of trash from the field to the mill with 171,465 Euro per year, costs related to 

choppers and harvesting 237,495 Euro per year and soil preparation 138,450 Euro per year. 

Assuming an operating time of 8,200 hours per year 16.4 GWh electricity is generated and 

exported to the public grid. The emission reductions are estimated at 9,446 CER per year. A 

selling price of 10 Euro per CER is assumed which corresponds to an annual revenue of 


94,460 Euro and almost a 1 million Euro revenue for the full 10 year project lifetime 

respectively. Additional revenues derive from electricity sales. A sales price of 40 Euro per 

MWh is assumed which corresponds to 6,560,000 Euro revenues by electricity sales in 10 

years. 

Additional outflows of approximately 140,000 Euro of transaction costs are considered due to 

the CDM project development and running costs as verification. 

The table below shows that according to the estimated investment and operation and 

maintenance costs from RSSC the project is not financially viable in case the investment of 

boilers and turbines has to be undertaken. 

Table 4.8: Financial Assessment of Renewable Energy to the Grid Project with and 

without CDM Component in Euro 

Carbon 

revenues 

Electricity 

sales 

Investment 

O & M 

costs 

CDM 

transaction 

costs 

NPV 

(interest 

rate 8%) 

C/B 

With 

CDM 

Without 

CDM 

944,640 6,560,000 4,888,101 5,474,100 141,560 -3,401,708 0.58 

6,560,000 4,888,101 5,474,100 -3,851,345 0.51 

However, in case of the establishment of a combined heat and power plant (CHP), the 

thermal energy could be used and sold for cooling and/or heating purposes. The amount of 

energy which could be sold increases to 30 GWh, hence the benefits from the electricity 

sales increase to 1,200,000 Euro per year. Additional CDM revenues can be generated in 

case the thermal energy was formerly provided by electricity from the grid. Hence the project 

becomes financially more attractive. The IRR increases to almost 10% due to CDM revenues 

and energy sales. The cash flows in annex 10 provide additional information on the financial 

assessment of the proposed project idea. 

Table 4.9: Financial Assessment of Renewable Energy Combined Heat and Power 

Project with and without CDM Component in Euro 

Carbon 

revenues 

Electricity 

sales 

Investment 

O & M 

costs 

CDM 

transaction 

costs 

IRR 

NPV 

(interest 

rate 8%) 

C/B 

With 

CDM 

Without 

CDM 

1,728,000 12,000,000 4,888,101 5,474,100 141,560 9.97% 428,838 1.05 

12,000,000 4,888,101 5,474,100 5.63% -471,452 0.94 


Next steps: 

• Provision of trash financially viable 

Ongoing trials on trash harvesting have to be finalized and a technical and financially 

feasible solution is provided which is also applicable outside the sugar plant estate. 

• Clarification and definition of emission factor of the national grid in Swaziland 

(Please refer to 4.6.1) 

Without CDM benefits the project would not be financially feasible at least up to date. 

• Regulation on feed in system of electricity into the national grid 32 

Regulations on standards, criteria and requirements to feed into the national grid 

have to be adopted. Negotiations between SEC and the sugar mills or other potential 

electricity providers have to come to a mutual agreement. 

• Concept development of the project setting 

The concept development includes a discussion on potential stakeholders, their roles 

and responsibilities, and a discussion and agreement on shares of costs and benefits. 

The RDMU can be seen as a coordinator which could facilitate this process. 


In the first place the sugar companies have the opportunity to implement such a CDM 

project. They have at least part of the required equipment in place already. Besides, they can 

easily use the thermal energy for steam production, thus considerably increase the efficiency 

by doing CHP instead of pure electricity generation. 

Such trash burning CHP plants could be financed and operated by the sugar companies 

themselves. They have direct access to the raw material from their own estates. The project 

owner and the project location are the Swazi sugar industry, and one sugar company 

respectively. The sugar company invests in new equipment or upgrades its existing 

equipment if possible. All available trash is collected at the mill and fed into the boiler system. 

Surplus electricity is sold to SEC via the public grid. 

An alternative setup could consider the inclusion of the out-growers in such a new alternative 

or supplementary economic activity, as they are also owners of large reserves of trash. 

Sugar companies and out-growers could set up a “special project vehicle (SPV)” for 

implementing a CDM bio-energy project. While private companies join the SPV by providing 

equity, out-growers could be financially supported through EC funds to finance the necessary 

investments. The SPV would own and operate the plant. Out-growers provide additional 

trash, thus increasing the capacity of the plant, and in return profit from cash or free of cost 

energy deliveries. 

32 

Following quotation from the UNDP/WB study 1987 should provide background information on feed in tariffs in 

Swaziland: “…the production of surplus power for export to the grid has not been a major consideration of the 

sugar industry in Swaziland, although during 1983-85 two of the sugar mills sold small amounts of power to 

the SEB (an average of 0.65 GWh per year). A major complication emerged in 1983/84 in the form of a lawsuit 

by cane growers who contended that they were entitled to a share of the proceeds from the power sales. The 

case went in favour of the growers, which has substantially reduced the already low incentive for the sugar 

industry to sell power SEB purchases it at the cost of ESCOM energy, currently only Swazi cents 2.2 (US¢ 

1.1) per kWh. The consequence of this is that the industry has made no sales to SEB since 1984/85.” 


Figure 4.5: Possible Project Setting for Trash to the Grid Project 

SVP 

e.g. Sugar Assets Ltd. 

Sugar Mills 

Out-growers 

MW CHP at 

Mill 1 

MW CHP at 

Mill 2 

MW CHP at 

Mill 3 

However, such a setup would also qualify for energy contracting, where an external operator 

provides funding and sound knowledge of the technology. The contractor would then operate 

the plant and for a certain time – the contracting period – sell electricity to the grid and steam 

to the sugar company. 

Finally it could also be the out-growers alone who could set up such a project, however, most 

of them probably on a smaller scale. Nevertheless, in case a smaller project (at least 2 MWe) 

still generates es sufficient amounts of carbon credits, a private carbon buyer/investor could be 

interested in participating. Besides the opportunity of gaining access to larger numbers of 

CERs, private investors would even be more attracted by such a project in case the project 

would be supported through EC funding. 


4 . 5 C D M P o t e n t i a l o u t s i d e t h e S u g a r I n d u s t r y 

The study team experienced a big interest in the CDM topic outside the sugar industry. As 

mentioned at the beginning of the report (chapter 2.1) Swaziland and all SADC states will 

face a massive energy crisis in the near future, hence the GoS is looking for coping 

strategies which include the assessment of domestic energy generation. The main findings of 

a small assessment regarding CDM options outside the sugar industry are outlined in this 

section. It becomes obvious that outside the sugar industry the same CDM challenges as the 

determination of the grid factor remain. In general, the study team identified two CDM 

opportunities in Swaziland outside the sugar industry. 

• Renewable energy (based on wood residues and energy plantations) to the grid, 

• Energy efficiency projects in households and buildings under a programmatic 

approach. 

Biofuels for transportation too small for CDM 

In sections 3.2.3 and 3.2.7 biofuels as ethanol and PPO were discussed. The assessment of 

project ideas figured out that the CDM project size for biofuel is not sufficient in order to 

cover transaction costs. 

In 2006, Swaziland imported 112 million litres of petrol mainly for transportation with an 

upward future trend. As stated in section 3.2.3 Swaziland requires approximately 12 million 

litres ethanol for an E10 blending. Table 4.10 outlines the CO2 co-financing option in biofuel 

projects. The ethanol production considers the current use of petrol (E10 blending). The 

numbers regarding biodiesel consider the minimum amount under a CDM view. Biodiesel 

would require an expansion of oil crop production and a biodiesel production facility. 

Assuming the cultivation of castor bean the production of 53 million litres of biodiesel 

requires over 100,000 ha of land. Therefore the production of ethanol fuel could be easier 

developed compared to biodiesel as the infrastructure mainly exists. 

Biofuel is a very controversially discussed topic in the UNFCCC. So far only two 

methodologies are approved. One of the approved methodologies is a small-scale 

methodology which deals with pure plant oil for transportation 33 while the other is a largescale 

methodology based on waste cooking oil 34 . Nevertheless, no biofuel project has been 

registered so far. The issue regarding biofuels is still under discussion and some months ago 

the EB announced to develop and provide a guideline on how to treat biofuel projects. 

33 AMS III T: Plant oil production and use for transport applications; further information available under: 

http://cdm.unfccc.int/methodologies/SSCmethodologies/approved.html 

34 AM 47: Production of biodiesel based on waste oils and/or waste fats from biogenic origin for use as fuel --- 

Version 2; further information available under: 

http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html 


Table 4.10: Estimates on CDM Project: Biofuels for Transportation 

Fuel 

Amount of 

biofuels in 

litres 

Corresponding 

fossil fuel 

equivalent in 

litres 

Corresponding 

fossil fuel in 

tonnes 

CO2 emission 

reduction in 

CER 

Ethanol 11.2 million 7.28 million 5,387 Approx. 4,300 

Biodiesel 53 million 48.2 million 40,000 Approx. 20,000 

The following sections of the chapter briefly outline the identified project ideas. 

4 . 5 . 1 R e n e w a b l e E n e r g y t o t h e G r i d 

Swaziland possesses a big biomass potential to generate bio-energy, and could 

systematically extend that potential by the establishment of various types of energy 

plantations. The availability of idle land and land conditions have to be assessed in order to 

proceed in planning of energy plantations. Additionally, improved pasture management 

systems have to be considered. The biofuel strategy of the MNRE covers issues of land use, 

and aims to determine the potentially available land for energy plantations. 

The section presents a project idea of Peak Timbers Ltd and shows how to use the biomass 

residues and how it could contribute to the energy supply in Swaziland. 



The proposed project idea has been developed by Peak Timbers Ltd, and aims at generating 

electricity from additional, by now unused biomass residues from sawmill and forestry 

operations. The electricity will be generated in three existing turbines, powered by steam 

generated in matching boilers which have been out of commission for more than 20 years. 

The main activities of this project include refurbishing of the existing boilers and an 

investment to a new switch gear. In addition to consuming biomass residues as sawdust, 

bark residues, and wood chips produced in the sawmill operation, the project initiates the 

collection of biomass residues from forest harvesting operations. This harvested waste will 

be collected by contractors after each thinning or final harvest and transported to the saw 

mill, where it will be chipped and burned in the boilers. 

This project is planned to generate around 16 GWh/year of electricity which is envisaged to 

meet the total energy demand of the saw mill with a surplus. From the total generated 

electricity approximately 11 GWh will be used internally and approximately 5 GWh will be 

sold to the grid. 



The current situation at Peak, which would continue unchanged without the CDM project, is 

as follows: 

A fraction of the biomass residues from the sawmill, consisting of approximately 12 

tonnes/hour of sawdust and bark, is transported by conveyer to existing boilers. This 

biomass is burned to create steam, which is used in the dry kilns. Remaining biomass 

residues, consisting primarily of wood chips, are sold in regional markets for the production 

of paper and/or fibre board. No electricity is generated on-site in the baseline scenario. 

Electricity to power the sawmill operations is purchased from the SEC and delivered via the 

grid. The generation of 16 GWh renewable electricity per year would substitute electricity 

from the public grid. Assuming a grid factor of 720 tCO2 per GWh the baseline emissions are 

11,520 tCO2 per year. 


Project emissions which have to be considered and subtracted from the baseline emissions 

include CO2 emissions from fossil fuel and electricity consumption during the harvesting and 

transportation of the biomass. In case fossil fuel is required to start the boilers that would 

also have to be considered. Project emissions are estimated with 20%, hence the emission 

reduction is estimated to be 9,216 tCO2. The major part of the emission reduction takes 

place on-site, which means at the sawmill, by substituting the electricity provided by SEC and 

the remaining 5 GWh bio-energy are exported to the grid. 

The project is presented as a PIN in annex 7 (Project Idea Note: Peak Timbers Biomass 

Energy Project). The project owner arrives at a different estimation on the emission reduction 

(12,403 tCO2 per year) as the emission grid factor is not determined it is very difficult to 

estimate the amount of emission reductions. 

Financial assessment 

Based on the cash flow provided in the PIN of the Peak Timbers (see annex 7) following 

financial parameters can be summarized. 

The revenues of the project consist of i) saved purchase costs for electricity from the public 

grid, ii) sales of own generated electricity which is exported to the public grid and iii) saved 

costs due to avoided grid interruptions. Please note that the project owner assumed a 

electricity purchase price of approx. 400 E per MWh and a selling price of approx. 233 E per 

MWh. The loss by the proposed project happens through reduced sales of biomass and the 

operation and maintenance costs of turbines and boilers. 

The cash flow covers a project lifetime of 8 years. As mentioned above Peak Timbers 

estimates the amount of carbon credits at 12,403 CER per year with a financial benefit of 218 

E per CER. 

Transaction costs cover the project development at the beginning and monitoring costs, 

however, the regular validation is not included. 


Table 4.11: Financial Assessment of Renewable to the Grid outside the Sugar Industry 

with and without CDM Component in E 

With 

CDM 

Without 

CDM 

Revenues Investment Additional 

costs 

Carbon 

revenues 

CDM 

Transaction 

costs 

79,840,167 9,034,000 77,131,600 21,631,184 730,300 25% 

79,840,167 9,034,000 77,131,600 -8% 

IRR 

Source: PIN of Peak Timbers provided by Peak Timbers 

The financial figures show that the carbon revenues are required to make that project 

financial viable. 

4 . 5 . 2 E n e r g y E f f i c i e n c y i n H o u s i n g a n d B u i l d i n g s 

u n d e r C D M P r o g r a m m e o f A c t i v i t i e s 

The GoS addressed energy related issues during discussions in Swaziland. The GoS intends 

to develop strategies such as the implementation of more efficient light bulbs to reduce 

electricity demand to unload the national grid. The CDM provides approved methodologies 

which address this type of project which is presented in the following. 

Description of a possible CDM project: 

Project idea: 

The project idea involves the distribution of approximately 100,000 compact fluorescent 

lamps (CFLs) to public buildings such as ministries and their departments, schools, health 

centres, training centres and the university in Swaziland. The CFLs will be distributed for free 

or for a minimal fee. The replacement of a 100W incandescent light bulb with a 

corresponding 20W CFL, saves 80W/h and this is about 80% of energy consumed. This 

action has high financial benefits through energy savings. This project is estimated to have 

investment cost of about 3.6 million Emalangeni which cover the purchase of CFLs (35 E per 

CFL) and distribution costs. 

Baseline: 

In the absence of the CDM project activity currently used light bulbs would continue to be 

used as the purchase costs are significantly higher. The requested electricity is provided by 

SEC. 

Following parameters are assumed: 

• 100,000 CFLs replace 100,000 100W bulbs over 2 years (or more), 

• Bulbs glow in average 3.5 working hours, 365 days per year 

• The grid factor is determined with 720 t CO2 per GWh. 


The project can be carried out as PoA, hence the quantity and the location of the CFL 

distribution does not have to be defined at the start of the project. However, the present 

estimation assumes that 100,000 CFLs are distributed at the same time. Hence baseline 

assumptions are: 100,000 light bulbs each 100 W, with an operation time of 3.5 hours per 

day and 365 days per year, and a grid factor of 720 tCO2 per GWh. These assumptions 

result in an estimation of the baseline emissions at 9,198 tCO2 per year. 


Project emissions cover the required energy for the CFLs which is 20W/h per CFL. According 

to applicable methodology 35 additional project emissions of at least 5% have to be 

considered. 

Therefore, through the implementation of this action, emission reductions are estimated to be 

approximately 7,000 tCO2 per year with an annual financial benefit from selling CER of 

approximately 840,000 Emalangeni. 

If the project lifetime is 10 years, the emission reductions are expected to be 70,000 tCO2 

and the potential financial benefit over 8 million Emalangeni. 

Table 4.12: Estimates on CFL Energy Efficiency Project 






9,198 tCO2 per 100W incandescent light bulb 

7,000 tCO2 per replaced incandescent light bulb with CFL 

Approx. 840,000 Emalangeni per year 

10 years, corresponding to over 8 million Emalangeni revenue 

Saved electricity purchase costs approx. 4,803,400 E per year 

(470 E per MWh, 10.22 GWh saved per year) 


The project is financially highly attractive as the amount of saved electricity costs per CFL is 

approximately 48 E per year and the investment per CFL is 35 E. However, experience 

shows that the population is quite reluctant to switch the light bulbs. The main reason are 

relatively high investment costs. The CDM mechanism is suitable to overcome this barrier in 

order to get upfront payments for the investment from potential CER buyers. 

35 Applicable methodology is AMS II J: Demand-side activities for efficient lighting technologies. Further 

information is available under: http://cdm.unfccc.int/methodologies/SSCmethodologies/approved.html 


Next steps: 

1) Project setting: Project owner and implementer of the project have to be identified. 

2) A baseline study has to be undertaken in order to determine power of used incandescent 

light bulbs and the operation time and to identify suitable project locations for implementing 

such a project activity. 

3) Determination of emission grid factor of Swaziland. 

4 . 6 C h a l l e n g e s R e g a r d i n g C D M i n S w a z i l a n d 

As described, only direct substitution of coal can be applied to CDM without any further 

clarification or and development of CDM regulation. 

All other project types face certain challenges as: 

1) determination of grid factor is not applicable to Swaziland, 

2) programmatic approach requests further technical and structural 

development. 

4 . 6 . 1 D e t e r m i n a t i o n o f N a t i o n a l G r i d F a c t o r 

Emission factor: A coefficient that relates the activity data to the amount of chemical 

compound which is the source of later emissions. Emission factors are often based on a 

sample of measurement data, averaged to develop a representative rate of emission for 

a given activity level under a set of operating conditions. 

Grid/project electricity system is defined by the spatial extent of the power plants that 

are physically connected through transmission and distribution lines to the project 

activity and that can be dispatched without significant transmission constraints. 

Source: UNFCCC 

A grid emission factor is the weighted average amount of CO2 in tonnes per MWh emitted 

from power plants connected physically to the electricity grid system. The grid emission 

factor depends on the type of fuel sources used by the connected grid power plants. The 

UNFCCC defined for each fuel type an emission factor which has to be used. Fossil fuel 

based power plants result to a higher grid emission factor compared to renewable based 

power plants. 

The calculation of a grid factor is required to calculate baseline emissions based on the 

quantity of electricity generated and consumed and is used to estimate the amount of CERs 

that could be generated by a project activity. 

In 2007, Swaziland imported about 76% of electricity from Eskom and approximately 8% 

from STEM and EDM; hence the grid electricity network in Swaziland is connected to South 

Africa and Mozambique. This poses a great challenge in terms of determining a national grid 

factor for Swaziland. According to the methodological tool for calculating emission factor for 


an electricity system, “for imports from connected electricity systems located in another host 

country/countries, the emission factor is 0 tons CO2 per MWh.”36 This means even though 

the electricity used in Swaziland is mainly based on fossil fuels (88% of electricity from South 

Africa is coal based and 4% of electricity from Mozambique is fossil based), the emissions of 

these fuels cannot be attributed to Swaziland. On the other hand, the electricity generated in 

Swaziland is mainly hydro based, which is a renewable source, hence the grid emission 

factor for Swaziland becomes zero. 

Therefore all project activities in Swaziland aimed to substitute or reduce electricity demand 

from the grid, i.e. if a project activity supplies electricity to the grid (e.g. new biomass power 

plant) or a project activity results in savings of electricity that would have been provided by 

the grid (e.g. demand-side energy efficiency projects) are effected by this. Consequently, this 

limits the opportunity for Swaziland to benefit from the CDM. However, it should be noted 

that this challenge is not only faced by Swaziland but by all SADC countries sharing the 

electricity network, especially those with large electricity imports from South Africa. This calls 

for the identification of strategic possible solutions to ensure that identified CDM project 

activities meant to supply electricity to the grid or reduce (or replace) grid electricity can be 

viable as CDM projects. 

Nevertheless, Swaziland is aware of this challenge and discussions on identifying possible 

solutions have already begun. A working group, coordinated by the DNA that is aimed to lead 

discussions on defining the Swazi grid, has already been established (please refer to annex 

8). This group includes stakeholders from MNRE, MEPD, SEC, SEA and the attorneys 

general office. It should be mentioned here that if there is no exception or possible 

solution that allows deviation from the current grid factor methodological tool 

prospects for CDM benefits in Southern African become limited. 

4 . 6 . 2 P r o g r a m m a t i c A p p r o a c h o n C D M 

Fragmented units require a high coordination effort, and consultancy between the 

stakeholders. Highly important questions as ownership and shares of carbon benefits and 

monitoring have to be discussed and negotiated. The CDM offers, for small and fragmented 

types of projects, a newly developed approach called programme of activities (PoA). The 

programme or policy describes the “prototype” project case and under the umbrella of the 

PoA several small scale projects (mini-projects) can be included. Swaziland as a small 

country is predestinated to develop country wide programmes; therefore PoA is shortly 

described in this section. 

A Programme of Activities (PoA) is a voluntary coordinated action by a private or public 

entity which coordinates and implements any policy/measure or stated goal. The activities 

lead to anthropogenic GHG emission reductions or net anthropogenic greenhouse gas 

removals by sinks that are additional to any that would occur in the absence of the PoA. The 

36 UNFCCC EB 35 Report Annex 12 - Methodological tool (Version 01.1) “Tool to calculate the emission factor 

for an electricity system” p.4 


PoA is carried out via an unlimited number of CDM Programme Activities (CPAs) (please 

refer to figure 4.6). 

Programmatic project activities are a result of a government measure or private sector 

initiative. This measure can be soft loan programmes (e.g. to promote energy efficient 

building rehabilitation), ion), grant programmes to promote the use of renewable energy, energy 

efficiency standards for household equipment etc. The private or public entity that 

coordinates the PoA is referred to as a coordinating/managing entity. 

A PoA is made up of CDM Programme Activities (CPAs). A CPA is defined as a project 

activity under a PoA, a single or a set of interrelated measure(s), to reduce GHG emissions 

or result in net anthropogenic GHG removals by sinks, applied within a designated area 

defined in the baseline methodology 

37 . Multiple CPAs can be included under a PoA at the 

time of registration and additional CPAs can be added at any point in the life of the PoA. 

The coordinating/managing entity of the Programme of Activities (PoA) is required to develop 

a Programme of Activities Design Document (CDM-POA-DD) DD) for the entire PoA as well as 

individual CDM Programme Activity Design Documents (CDM-CPA-DD) DD) for each CDM 

Programme Activity (CPA) within the PoA. 

Figure 4.6: Basic Structure of a CDM Programme of Activities 

Facilitates a Facilitates policy/measure 

a 

policy/measure or goal 

or 

goal 

Achieve the emission 

reductions 

Advantages of PoA are: 

• to include additional CPAs after the project registration, 

• the aggregation of SSC CPAs can go beyond SSC limits, 

• the lifetime of a PoA is maximal 28 years, 

• PoA can be run in multiple countries. 

37 EB 32, Annex 38, page 1 


Figure 4.7: Comparison of Project Lifetime of a Traditional CDM and a PoA 

Source: UNEP Risoe 

PoA is suitable for sectors which have small to medium size, are geographically and 

temporarily dispersed, and have a large quantity of owners. Figure 4.7 illustrates the 

difference between a traditional CDM project and a CDM under a programmatic approach. 

The figure shows that a traditional CDM project generates in short time (10 years) in one 

activity a comparatively large number of certificates, whereas a CDM PoA covers a large 

number of activities (CPA) over a time period of 28 years. The difference between the 

bundling of SSC projects and PoA is that the number of CPAs does not have to be defined 

at the time of the PoA registration. 

The greatest potential for PoA activities is found in the areas of energy efficiency, 

renewable energy (fuel switch), particularly in private households, small industry and in 

transport. 

The development of a PoA has to be carried out on two levels. One level can be called a 

technical level which is comparable to a traditional CDM project development and the other 

one is a structural level. The structural level facilitates the programme which needs 

coordination time. 


5 P L A N N I N G O F P H A S E 2 O F A S S I G N M E N T 

The preliminary definition of tasks to be accomplished during the second phase of the study 

is provided below: 

7. Assessment of bio-energy options for stationary use 

(electricity, heat or cooling) and mobile use (bio-ethanol for 

transportation) and energy efficiency 

a. Assessment of the production of bio-ethanol (biofuel) for 

transportation or/and stationary use, 

b. Suggestions for operating model (comparison ethanol 

vs. sugar), 

c. Assessment of capacity, 

d. Outline of required equipment and estimation on 

investment and production prices. 

8. Development of CDM projects 

a. Identified renewable energy projects are outlined by a 

PIN, including CO2 reduction potential, 

b. Development of Project Design Documents 

i. Including stakeholder consultation as defined under 

UNFCCC, 

ii. Including Environmental Impact Assessment as defined 

under UNFCCC, 

iii. Application for Letter of Approval from DNA Swaziland, 

c. Capacity Building regarding CDM procedure, including 

monitoring, 

d. Coordination of Validation and registration, 

e. Support regarding first monitoring report and first 

verification. 

9. Performing CBA and financial analyses 

a. Including potential co–financing options through CDM. 

10. Development of a suitable and sustainable energy 

concept for the utilisation of residues from the sugar cane 

cultivation and sugar production cycle 

a. Assessment of current energy demand and supply, 

b. Estimation of future energy demand based on future 

development plans, 

c. Development of sustainable energy concept via a 

synthesis of results from availability of biomass, technical 

options, infrastructure, and energy demand. 

Most of the tasks of phase 2 have already been completely or at least partly been handled 

during the first phase. 


During the first mission it showed that the sugar companies were already preparing for 

energy efficiency and renewable energy measures that could be carried out as CDM project 

as long as the actual implementation of the measures had not started. Because of these time 

constraints some of the preliminary assessment activities had to be pushed up to phase 1. 

In line with the expectations of the national stakeholders and as agreed with RDMU in the 

course of the first mission to Swaziland, activities in the second phase should concentrate on 

the development of two climate projects by preparing the respective Project Design 

Documents. This should preferably be done in cooperation with the Ubombo sugar mill. At 

the time the second phase starts, Ubombo will have finalized the technical planning. This 

information is required for elaborating the PDDs. The concepts and project documents could 

then be used by similar projects, thus facilitating the development of more climate projects in 

the sugar sector. 

Another focus of the second phase of the assignment should be the identification of one 

project setup in the out-grower sector. This is of relevance for RDMU as it opens up the 

possibility for combining EC funding with carbon financing. 

The third priority issue identified for phase 2 is given by the necessity to provide support to 

the national DNA. The first task here will be to solve the National Grid Factor problem. This 

should be accomplished by employing a special legal expert who – in cooperation with the 

team leader of the energy/carbon study – should provide proposals on how to solve this 

problem within the shortest time possible. The terms of reference for this expert are attached 

in this report as annex 17. This mission, where the TL should be paid from the budget of the 

energy/carbon study and the legal specialist should be financed directly by RDMU under a 

separate contract, should be carried out at the beginning of phase 2. 

The suggested work programme of phase 2 is provided below: 

2 nd ASSIGNMENT: 

Days total Swaziland Home office 

Joachim Schnurr 29 21 8 

Daniel Blank 41 28 13 

Gerald Kapp 21 14 7 

TOTAL 91 63 28 


hereof: 

PDD DEVELOPMENT 

Ubombo Fuel Switch 

Ubombo Energy Efficiency 


Gerald Kapp 21 14 7 

Daniel Blank 41 28 13 

TOTAL 62 42 20 

DNA CAPAPCITY BUILDING 



TOTAL 9 7 2 

OUT-GROWERS CONCEPT: 



TOTAL 20 14 6 


6 B I B L I O G R A P H Y 

Energy Information Administration (2007): http://www.eia.doe.gov/oiaf/ieo/world.html 

02/10/08 

Erlich, C. (2006): Sugar and Ethanol Industries – Energy View, Energy Technology. 

Swaziland Investment Promotion Authority (SIPA) 

Fulton et al. (2004), Biofuels for Transport: An International Perspective, Paris: 

International Energy Agency 

GEF (2006): Cogen in Africa, Global Environment Facility and United Nations 

Environmental Programme project brief 

Gjerding, Soren (2002): Wind Measurements at Five Sites in Swaziland, Tripod Wind 

Energy Aps Consulting Engineers 

Government of Swaziland, (2008): Draft biofuels strategy, Ministry of Natural Resources 

and Energy 

Government of Swaziland, (2006): National Adaptation Strategy in Response to the EU 

Sugar Sector Reforms, Ministry of Economic Planning and Development 

Government of Swaziland, (2000): Swaziland Annual Statistical Bulletin, Central Statistical 

Office, Mbabane 

Government of Swaziland, (2007): Supplement to the Swaziland Government Gazette 

Vol. XLV 

Government of Swaziland, (2003): Swaziland Energy Statistical Bulletin 2001 – 2003, 

Ministry of Natural Resources and Energy 

Government of Swaziland, (2003): Swaziland National Energy Policy 2003, Ministry of 

Natural Resources and Energy 

IPCC, (2006): 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Prepared 

by the National Greenhouse Gas Inventories Programme, Eggleston H.S., Buendia L., Miwa 

K., Ngara T., and Tanabe K. (eds). Published: IGES, Japan 

Renewable Energy Association of Swaziland (2004), Renewable Energy In Swaziland 

Brochure, Ministry of Natural Resources and Energy 

Royal Swaziland Sugar Corporation Limited: Annual Report 2008 

Royal Swaziland Sugar Corporation (RSSC), Company Profile 

Royal Swaziland Sugar Corporation (RSSC), (2008): Fuel Switching Project 

https://cdm.unfccc.int/Projects/Validation/DB/KKL3GHXCQL0RAHZ9TBZEKE3XBUZ5D1/vie 

w.html 

Swaziland Electricity Board: Annual Report 2006-2007 

Swaziland Sugar Association: Annual Report 2006 -2007 

Swaziland Sugar Association, (2007): Swaziland Crop Statistic 2006 – 2007 


Southern African Development Community, (2006): SADC Energy Statistical Year Book 

2004 – 2005 

TechnoServe, 2007 - 

http://www.technoserve.org/work_impact/locations/swaziland.aspx#moreabout 

UNEP (2007); Guidebook for Financing CDM projects, Capacity Development for CDM 

(CD4CDM) Project UNEP RISOE Centre 

UNEP Risoe Centre on Energy, Climate and Sustainable Development: 

http://www.uneprisoe.org/ 23/10/08 

United Nations Framework Convention on Climate Change: http://unfccc.int/2860.php 

UNFCCC EB 35 Report Annex 12 - Methodological tool (Version 01.1) 

http://cdm.unfccc.int/methodologies/PAmethodologies/approved.html 

http://cdm.unfccc.int/Projects/Validation/DB/KKL3GHXCQL0RAHZ9TBZEKE3XBUZ5D1/view 

.html 

http://cdm.unfccc.int/Reference/PDDs_Forms/PDDs/PDD_form04_v03_2.pdf 23/10/08 

http://cdm.unfccc.int/methodologies/SSCmethodologies/approved.html 12/10/08 



http://www.cbot.com/cbot/pub/cont_detail/0,3206,126+36292,00.html 20/09/08 

http://www.deir.qld.gov.au/images/whs/sugarmillfig02.jpg 12/09/08 

http://www.sec.co.sz/ 09/09/08 

http://www.ssa.co.sz/ 05/09/08 


7 A N N E X 

Please refer to attachments. 


A n n e x 1 : D e s c r i p t i o n o f S u g a r P r o c e s s i n g a n d 

R e f i n i n g P r o c e s s 

Sugar Processing 

The sugar refining process starts by harvesting the cane, which in the case of Swaziland is 

usually done in two basic steps. The first step involves burning of the cane. This is done 

mainly to remove the leaves from the standing cane which facilitates the harvesting process. 

In addition, burning the fields heats up the sucrose inside the cane, making it easier to work 

with, and burning drives away the native snakes, making it safer for the workers to cut the 

cane. The second step is cutting down the cane, which is largely done manually by migrant 

workers. 

Milling/ Juice Extraction Process 

The first stage of processing is the extraction of the cane juice. The cane is crushed to 

extract the liquid (juice) from its core. In many factories the cane is crushed in a series of 

large roller mills. Once the juice has been extracted the cane fibre remaining is called 

bagasse which is the first by-product of sugar processing. The bagasse is burnt in large 

boilers where a lot of heat is given out, which in turn can be used to boil water and produce 

high pressure steam. The steam is used directly in the process of making sugar and to 

generate electricity in turbines as well. 

Juice Clarification 

The extracted juice goes through a clarification and filtration process, as at this stage it is 

pretty dirty: the soil from the fields, some small fibres and the green extracts from the plant 

are all mixed in with the sugar juice. The factory can clean up the juice quite easily with 

slaked lime (a relative of chalk) which settles out a lot of the dirt which is usually called filter 

cake. This cake is sent back to the fields for enhancement of soil quality. 

Evaporation 

Once this is done, the juice is thickened up into a syrup by boiling off the water using steam 

in a process called evaporation. Sometimes the syrup is cleaned up again but more often it 

just goes on to the crystal-making step without any more cleaning. 

Crystallization 

The syrup is placed into a very large pan for boiling, until it becomes supersaturated. In the 

pan even more water is boiled off until conditions are right for sugar crystals to grow. When 

the crystal size reaches the desired size, the slurry is processed through centrifugals. The 

spinning action of the centrifugals separates the sugar crystals from the remaining liquid 

solution, known as molasses. The crystals which are then raw sugar are then given a final 

dry with hot air before being stored ready for despatch. 

Annex 1 to Report on First Assignment Renewable Energy and Carbon Team 2008 - Page 1

Sugar Refining Process 

Affination 

The first stage of refining the raw sugar is to soften and then remove the layer of mother 

liquor surrounding the crystals with a process called "affination". The raw sugar is mixed with 

warm, concentrated syrup of slightly higher purity than the syrup layer so that it will not 

dissolve the crystals. The resulting magma is centrifuged to separate the crystals from the 

syrup thus removing the greater part of the impurities from the input sugar and leaving the 

crystals ready for dissolving before further treatment. The liquor, which results from 

dissolving the washed crystals, still contains some colour, fine particles, gums, resins and 

other non-sugars. 

Carbonatation 

The first stage of processing the liquor aims at removing the solids which make the liquor 

turbid. Coincidentally, some of the colour is removed, too. One of the two common 

processing techniques is known as carbonatation: small clumps of chalk are grown in the 

juice. The clumps, as they form, collect a lot of the non-sugars so that by filtering out the 

chalk one also takes out the non-sugars. Once this is done, the sugar liquor is ready for 

decolourisation. The other technique, phosphatation, is chemically similar but uses 

phosphate rather than carbonate formation. 

Decolourisation 

There are also two common methods of colour removal in refineries, both relying on 

absorption techniques with the liquor being pumped through columns of medium. One option 

open to the refiner is to use granular activated carbon (GAC), which removes most colour but 

little else. The carbon is regenerated in a hot kiln, where the colour is burnt off from the 

carbon. The other option is to use an ion exchange resin, which removes less colour than 

GAC but also removes some of the inorganics present. The resin is regenerated chemically, 

which gives rise to large quantities of unpleasant liquid effluents. 

The clear, lightly coloured liquor is now ready for crystallisation except that it is a little too 

dilute for optimum energy consumption in the refinery. It is therefore evaporated prior to 

going to the crystallisation pan. 

Crystallization 

In the pan even more water is boiled off until conditions are right for sugar crystals to grow. 

The purified syrup is then concentrated to super saturation and repeatedly crystallized under 

vacuum, to produce white refined sugar. As in sugar milling once the crystals have grown to 

the desired size the resulting mixture of crystals and mother liquor is spun in centrifuges to 

separate the two. The crystals are then given a final dry with hot air and cooled before being 

packed and/or stored ready for despatch. 

Additional sugar is recovered by blending the remaining syrup with the washings from 

affination and again crystallized to produce brown sugar. When no more sugar can be 

economically recovered, the final molasses still contains 20 to 30 percent sucrose and 15 to 

25 percent glucose and fructose. 


After this process the sugar goes through a drying and conditioning process. First the sugar 

is dried in a hot rotary dryer, and then it is conditioned by blowing cool air through the rotary 

dryer for several days. Afterwards the dry sugar is packed, stored and dispatched. 

The figure below illustrates the different sugar processing steps at RSSC. 

Figure 1: Steps in sugar Processing 

Source: RSSC 


A n n e x 2 : T e c h n i c a l I n f o r m a t i o n : R S S C - S i m u n y e 

1 1 x 405 TCH Milling tandem 

2 33 to 35 weeks crushing season, starting 1st week of April each year 

3 2 x Cameco Portabox Tippers, 1 x HILO Spiller Bar System 

4 1 x Primary, Secondary Knives and 1,500 T-H Type Shredder 

5 3 x 55 TSH all Bagasse/Coal Fired Boilers & 1 x 125 TSH JTA Bagasse only Boiler 

6 1 line Roberts Evaporator System x 5 effects with 2 x tray clarifiers 

7 4 x A Batch Pans, 3 x B Batch Pans & 1 x Cont C Pan for 3 Pan Boiling System 

8 4 x A Batch Western States, 3 x BMA A Batch, 2 x MBA B Cont, 2 x BMA B/C 

Centrifugals, 2 x Western States C Centrifugals 

9 4 x 500 tons VHP Silos, 1 x 76,000 tons Bagged sugar store & 1 x 50,000 tons bulk 

sugar store 

10 Boiler Making, Machine, Fitting, Electrical and Instrument Workshops 

Product Lines 

RAWHOUSE 

RAWHOUSE 

Power Station 

±250,000 tonnes Raw & VHP or both per annum 

±73,000 tonnes Molasses per annum 

17-MW Power Station capable of exporting ±9mw to the National Power 

Station Grid or Irrigation / Village requirements 


A n n e x 3 : T e c h n i c a l I n f o r m a t i o n : R S S C - M h l u m e 

Technical Information 

1 2 x 150 TCH each lines, one a milling tandem and the other a BMA Diffuser. 

2 33 to 35 weeks crushing season, starting 1st week of April each year. 

3 2 x Rota Tipper & 4 Gantry Cranes for 3. off-loading cane 

4 2 x Carding Drums, Primary, Secondary Knives and 1,500 T-H Type Shredders 

5 1 x 68 TSH, 1 x 100 TSH and 1 x 125 TSH JTA Boilers, all with moving grates. 

6 3 lines evaporator system (DL, Stork and JBH) with 1 x Rapidoor and 1 x SRI Clarifiers 

7 13 x Raw Batch Pans for 3 Pan Boiling System and 3 x Refinery Batch Pans 

8 30 RSO Refinery with 25,000 tons and 1,000 tons Conditioning Towers. 

9 5 x A Batch BMA G1500, 3 x B Cont Broadbent 1220 and 4 x C Cont 2300 Cent. 

10 40,000 tons warehouse for refined sugar storage 

11 Boiler Making, Machine, Fitting, Electrical and Instrument Workshops 

Product Lines 

RAWHOUSE ±50,000 tonnes molasses per annum 

MSP 101,000 tonnes packed sugar of varying pack sizes per annum 

RAWHOUSE ±45,000 tonnes raw sugar or VHP or both per annum 

REFINERY 120,000 tonnes refined sugar per annum 

Power 

station 

18.5-mw Power Station capable of exporting ±8mw to the National Grid or 

Irrigation / Village requirements 


A n n e x 4 : S p e c i f i c a t i o n o f E t h a n o l a s F u e l 

Ethyl alcohol of 99.9 % (volume) purity of synthetic origin 

min. 

max. 

Alcohol (mass %) 99,95 

Water content (max. ppm) 500 

Other saturated alcohols (max. vol. %) 0.2 

Ester as ethylacetat (max. ppm) 100 

Aldehyde (max. ppm) 200 

Methanol (max. vol. %) 0.1 

Acidity (max. ppm) 30 

Chloride (max. mg/ kg) 0.5 

Sulfates (max. mg/ kg) 1 

Sulphur (max. mg/ kg) 10 

Sodium (max. mg/kg) 5 

Potassium (max. mg/kg) 5 

Cupper (max. mg/kg) 1 

Non-volatile components 

10 

(max. mg/100 ml) 

Ethanol 99.9 is available in undenatured and denatured form and this sales specification is 

valid for the undenatured product. In general, denaturation is done by the addition of 

methylethylketone (MEK). Other denaturating agents, such as toluene and white spirit can be 

added if wished. Undenatured ethanol is free of foreign odours. 


A n n e x 5 : E n e r g y R e q u i r e m e n t s f o r I r r i g a t i o n 

Source: Tickie de Beer, 2008 


A n n e x 6 : C a s h F l o w a n d A s s u m p t i o n s f o r S o l a r W a t e r H e a t i n g P r o j e c t 

Assumptions for solar water heating 

Estimation of Current Energy Consumption for water heating 

Description Amount Unit 

Number of schools 200 

Average energy Cost per Month 3.000 E 

Energy Cost per kWh 0,47 Cents 

% water heating per month 43% % 

Cost of heating water per school 1.290,00 E 

Energy required to heat water kWh per month 2.744,68 kWh/month 

Energy cost for heating water in all schools 258.000,00 E/month 

Energy savings in all schools kWh 548.936,17 kWh/month 

Estimation of Solar Collector Size and Investment 


Estimated efficiency 50% % 

Insolation 5 kWh/m2/day 

Energy output per day 91,49 kWh/day 

Collector area required in one school 37 m2 

Estimated Investment cost per m2 200 €/m2 

Investment cost in one school 7.319,15 € 

Investment cost 84.170,21 E 

Total Investment Cost 16.834.042,55 E 

Annex to Report on First Assignment Renewable Energy and Carbon Team 2008 - Page 1

Estimation of Energy Savings 


Operation time of solar system 9 Months/year 

Current energy required to heat water 6.587.234,04 kWh/y 

Energy saved by using solar water heating 4.940.425,53 kWh/y 

Cost savings by using solar water heating 2.322.000,00 E 

Estimation of CER 


Assumed grid factor 720 t CO2/GWh 

Energy saved by using solar water heating 4.940,43 MWh 

Energy saved by using solar water heating 4,94 GWh 

CO2 Emissions 3.557,11 t CO2/GWh 

Estimated CER price 10 € 

Carbon Revenue 35.571,06 €/year 

Carbon Revenue 409.067,23 E/year 

Xchange rate 1€ = 11,5 E 

Baseline Scenario Amount Unit 

Energy currently consumed in all Institutions 6.587.234,04 kWh/year 

6.587,23 MWh 

6,59 GWh/year 

Baseline emissions 4.742,81 t CO2 


Cash Flow: CDM Project: Solar Water Heating in Emelangeni 

Climate Project Calculation Cash Flow 

Incremental CF 1 2 3 4 5 6 7 8 9 10 11 Total 1-10 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 

Carbon revenues 409.067 409.067 409.067 409.067 409.067 409.067 409.067 409.067 409.067 409.067 

Energy cost savings (own) 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 

Total receipts 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 2.731.067 27.310.672 

discounted (6%) 0 2.430.640 2.293.057 2.163.261 2.040.812 1.925.295 1.816.316 1.713.505 1.616.514 1.525.014 1.438.692 18.963.106 

Outlay/Outflows 

Transaction costs climate project 

PDD 287.500 

Validation 172.500 115.000 115.000 115.000 115.000 115.000 115.000 115.000 115.000 115.000 115.000 

Registration 28.750 

Monitoring 11.500 11.500 11.500 11.500 11.500 11.500 11.500 11.500 11.500 11.500 11.500 

Total Operating costs 500.250 126.500 126.500 126.500 126.500 126.500 126.500 126.500 126.500 126.500 126.500 1.765.250 

Investment Costs 16.834.043 0 0 0 0 0 0 0 0 

Total Outlays 17.834.543 253.000 253.000 253.000 253.000 253.000 253.000 253.000 253.000 253.000 253.000 20.364.543 

discounted (6%) 16.825.040 225.169 212.424 200.400 189.056 178.355 168.259 158.735 149.750 141.274 133.277 18.581.740 

Increm. Balance Cash-flow -17.834.543 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 2.478.067 6.946.130 

Cumulative Cash-flow -17.834.543 -15.356.475 -12.878.408 -10.400.341 -7.922.274 -5.444.206 -2.966.139 -488.072 1.989.995 4.468.063 6.946.130 -59.886.270 

rate NPV 

Discount factor 6,0000% 0,943 0,890 0,840 0,792 0,747 0,705 0,665 0,627 0,592 0,558 0,527 

Incr net benefit discounted -16.825.040 2.205.471 2.080.633 1.962.861 1.851.756 1.746.940 1.648.056 1.554.770 1.466.764 1.383.740 1.305.415 -924.049 

Discount factor 3,0000% 0,943 0,915 0,888 0,863 0,837 0,813 0,789 0,766 0,744 0,722 

Incr net benefit discounted -16.810.767 2.267.783 2.201.731 2.137.603 2.075.342 2.014.895 1.956.209 1.899.232 1.843.915 1.790.208 1.376.151 



IRR 6,48% 

Benefit Cost Ratio (6%) 1,020523699 

Pay back Period of Investment 6,53 


Cash Flow: Solar Water Heating Project withouut CDM in Emelangeni 

Climate Project Calculation Cash Flow 

Incremental CF 1 2 3 4 5 6 7 8 9 10 11 Total 1-10 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 


Energy cost savings (own) 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 

Total receipts 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 23.220.000 

discounted (6%) 0 2.066.572 1.949.596 1.839.241 1.735.133 1.636.918 1.544.263 1.456.852 1.374.388 1.296.593 1.223.201 16.122.757 


Investment Costs 16.834.043 0 0 0 0 0 0 0 0 

Total Outlays 16.834.043 0 0 0 0 0 0 0 0 0 0 16.834.043 

discounted (6%) 15.881.172 0 0 0 0 0 0 0 0 0 0 15.881.172 

Increm. Balance Cash-flow -16.834.043 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 2.322.000 6.385.957 

Cumulative Cash-flow -16.834.043 -14.512.043 -12.190.043 -9.868.043 -7.546.043 -5.224.043 -2.902.043 -580.043 1.741.957 4.063.957 6.385.957 -57.464.468 

rate NPV 

Discount factor 6,0000% 0,943 0,890 0,840 0,792 0,747 0,705 0,665 0,627 0,592 0,558 0,527 

Incr net benefit discounted -15.881.172 2.066.572 1.949.596 1.839.241 1.735.133 1.636.918 1.544.263 1.456.852 1.374.388 1.296.593 1.223.201 -981.616 





IRR 6,32% 

Pay back Period 7,25 Benefit Cost Ratio (6%) 1,015212007 


Project Idea Note 

PROJECT IDEA NOTE (PIN) 

Name of Project: Peak Timbers Biomass Energy Project 

Date submitted: October 28, 2008 

A. PROJECT DESCRIPTION, TYPE, LOCATION AND SCHEDULE 

OBJECTIVE OF THE 

PROJECT 

Describe in not more than 5 

lines 

PROJECT DESCRIPTION 

AND PROPOSED 

ACTIVITIES 

About ½ page 

The objective of the Peak Timbers Biomass Energy Project is to reduce 

greenhouse gas emissions by replacing grid-supplied electricity with 

onsite generation of heat and electricity through the burning of 

renewable biomass residues from sawmill and forestry operations. 

Peak Timbers, a forestry business located in Piggs Peak, Swaziland, 

proposes to reduce global greenhouse gas emissions by generating 

electricity with renewable biomass residues from sawmill and forestry 

operations. The electricity will supply the full energy demand of the 

sawmill, and surplus electricity will be sold to a nearby sawmill and 

exported to Swaziland’s grid. 

Approximately 2MW of electricity will be generated in three existing 

turbines, powered by steam generated in matching boilers that make up 

three of Peak’s six boilers. The other boilers supply process steam at a 

different temperature and pressure and already run on biomass. The 

turbines and the three matched boilers have been out of commission for 

more than 20 years, due to the comparative economics of selling 

biomass residues vs. burning them to generate electricity. The capital 

expenses involved in the project include: the repair and certification of 

all boilers and turbines; upgrading electrical equipment (particularly the 

52 year old switchgear which will be replaced by new, cutting edge and 

much safer switchgear), the purchase of chipping equipment to prepare 

forest biomass residues for the boilers; and the construction of a larger 

storage bin to hold biomass residues before they are consumed. 

In addition to consuming biomass residues—sawdust, bark residues, 

and wood chips—produced in the sawmill operation, the project initiates 

the collection of biomass residues from forest harvesting operations. 

This harvesting waste will be collected by contractors after each thinning 

or final harvest and transported to the sawmill, where it will be chipped 

and burned in the boilers. This new practice will create an estimated 60 

local jobs. As a side benefit, the practice will reduce the risk of 

catastrophic fire in local forests, providing greater stability for the 

region’s largest employer. 

TECHNOLOGY TO BE 

EMPLOYED 


lines 

Biomass residues will be burned in Bellis and Morcomb turbines and 

boilers. The boilers are condensing boilers producing superheated 

steam at 230 degrees and 11 bar pressure. The existing turbines will be 

refurbished and new switchgear will be installed that will be modern and 

safe 

Page 1 of 9


TYPE OF PROJECT 

Greenhouse gases targeted 

CO 2 /CH 4 /N 2 O/HFCs/PFCs/SF 6 

(mention what is applicable) 

Type of activities 

Abatement/CO 2 sequestration 

Field of activities 


See annex 1 for examples 

The project will reduce CO2 emissions through the displacement of grid 

electricity. 

Abatement. 

Renewable Energy: Biomass 

LOCATION OF THE PROJECT 

Country 


City 

Piggs Peak 

Brief description of the The town of Piggs Peak is located in the northwest region of Swaziland. 

location of the project Peak Timbers is the largest local employer. 

No more than 3-5 lines 

PROJECT PARTICIPANT 

Name of the Project 

Peak Timbers Ltd. 

Participant 

Role of the Project Participant Peak Timbers is the owner and operator of the project. 

Organizational category Peak Timbers is a private company. 

Contact person 

Address 

Mr Erhard Kuhn 

Peak Timbers 

Piggs Peak, Swaziland 

Telephone/Fax +268 437 1188 

E-mail and web address, if erhard.kuhn@pfp.co.sz 

any 

Main activities 


lines 

Peak Timbers owns pine and eucalyptus plantations covering 

approximately 19,500 hectares, out of a total land ownership of 30,000 

hectares. Peak Timbers also owns and operates a sawmill with an 

annual intake capacity of 220,000 m 3 . The sawmill and forestry 

contractors employ over 1200 local people. 

Summary of the financials 

Summarize the financials 

(total assets, revenues, profit, 

etc.) in not more than 5 lines 

Summary of the relevant 

experience of the Project 

Participant 


lines 

EXPECTED SCHEDULE 

Earliest project start date 

Year in which the plant/project 

activity will be operational 

Peak Timbers’ revenues for the 18-month period ending on June 30, 

2008, were ZAR 182.85 million, and the total assets in the business as 

of June 30, 2008, were ZAR 228.4 million. 

Peak Timbers has been operating timber plantations and a sawmill in 

Piggs Peak for decades. Electricity was formerly generated at the plant, 

but the facility fell into disrepair more than twenty years ago. The 

company has the internal capacity to develop and operate this biomass 

energy project. 

2009 

Page 2 of 9


Estimate of time required 

before becoming operational 

after approval of the PIN 

Expected first year of 

CER/ERU/VERs delivery 


Number of years 

For CDM projects: 

Expected Crediting Period 

7 years twice renewable or 10 

years fixed 

Current status or phase of the 

project 

Identification and pre-selection 

phase/opportunity study 

finished/pre-feasibility study 

finished/feasibility study 

finished/negotiations 

phase/contracting phase etc. 

(mention what is applicable 

and indicate the 

documentation) 

Current status of acceptance 

of the Host Country 

The position of the Host 

Country with regard to the 

Kyoto Protocol 

Time required for financial commitments: 1 month 

Time required for legal matters: 1 month 

Time required for construction: 3 month 

2010 

10 years 

10 years 

The project has been designed and the initial feasibility study has been 

completed. The company has solicited proposals for the preparation of 

the Project Design Document, and engineers have been retained to 

assist with the project design and implementation. 

Discussions have been initiated with the Designated National Authority 

in Swaziland. A letter of no objection is anticipated after the submission 

of this Project Idea Note. 

Has the Host Country ratified/acceded to the Kyoto Protocol 

YES 

Has the Host Country established a CDM Designated National Authority 

/ JI Designated Focal Point 

YES 

Page 3 of 9


B. METHODOLOGY AND ADDITIONALITY 

ESTIMATE OF 

GREENHOUSE GASES 

ABATED/ 

CO 2 SEQUESTERED 

In metric tons of CO 2 - 

equivalent, please attach 

calculations 

BASELINE SCENARIO 

CDM/JI projects must result in 

GHG emissions being lower 

than “business-as-usual” in 

the Host Country. At the PIN 

stage questions to be 

answered are at least: 

• Which emissions are 

being reduced by the 

proposed CDM/JI 

project 

• What would the future 

look like without the 


project 

About ¼ - ½ page 

ADDITIONALITY 

Please explain which 

additionality arguments apply 

to the project: 

(i) there is no regulation or 

incentive scheme in place 

covering the project 

(ii) the project is financially 

weak or not the least cost 

option 

(iii) country risk, new 

technology for country, other 

barriers 

(iv) other 

Annual (if varies annually, provide schedule): 12,400 tCO 2 -equivalent 

Up to and including 2012: 49,600 tCO 2 -equivalent 

Up to a period of 10 years: 124,000 tCO 2 -equivalent 

The current situation at Peak, which would continue unchanged without 

the CDM project, is as follows: 

A fraction of the biomass residues from the sawmill, consisting of 

approximately 12 tons/hour of sawdust and bark, is transported by 

conveyer to existing boilers. This biomass is burned to create steam, 

which is used in the dry kilns. Remaining biomass residues, consisting 

primarily of wood chips, are sold in regional markets for the production 

of paper and/or fibreboard. No electricity is generated on-site in the 

baseline. 

Electricity to power the sawmill operations is purchased from the 

Swaziland Electricity Company, the local utility, and delivered via the 

grid. Approximately 80% of Swaziland’s electricity is imported from 

South Africa, where a significant portion of the grid electricity is 

generated by burning coal. Swaziland’s domestic electricity production 

consists primarily of hydroelectric power, which is generated only at 

certain hours of the day to meet peak demand. The grid emissions 

factor assumed in project calculations weights South Africa’s grid 

emissions (~0.95 tons/MWH) at 80% and weights Swaziland’s domestic 

projection at 0 tons/MWH). 

The project is additional on a number of grounds: 

(i) There are no local regulations or incentive schemes in place 

covering the project; 

(ii) The project is the first of its kind in Swaziland, creating a 

presumption of additionality. It also faces several other technological, 

human resource and financial barriers 

(iii) The project is financially weak. Given the market value of the 

biomass residues and the capital costs associated with the project, 

burning these residues does provide the financial project return that 

Peak normally seeks in its capital budgeting process. 

(iv) The practice of collecting forest biomass residues for the generation 

of electricity is not common practice in Swaziland, and the project will 

provide a demonstration for the local industry. 

Page 4 of 9


SECTOR BACKGROUND 

Please describe the laws, 

regulations, policies and 

strategies of the Host Country 

that are of central relevance to 

the proposed project, as well 

as any other major trends in 

the relevant sector. 

The project is not covered under any public incentive schemes, 

including preferential tariffs, grants, or Official Development Assistance. 

The project is not required by law. 

Please in particular explain if 

the project is running under a 

public incentive scheme (e.g. 

preferential tariffs, grants, 

Official Development 

Assistance) or is required by 

law. If the project is already in 

operation, please describe if 

CDM/JI revenues were 

considered in project planning. 

METHODOLOGY 

Please choose from the 

following options: 


(i) project is covered by an 

existing Approved CDM 

Methodology or Approved 

CDM Small-Scale 

Methodology 

(ii) project needs a new 

methodology 

(iii) projects needs 

modification of existing 

Approved CDM Methodology 

The project is covered by either AMS-1.C., or AMS 1.D, both of which 

are approved small-scale CDM projects. 

However, in order to be a viable CDM project, we will have to request a 

deviation to the “Tool to calculate the emission factor for an electricity 

system”. The existing tool specifies that “for imports from connected 

electricity systems located in another host country(ies), the emission 

factor is 0 tons CO2 per MWh”. If the approximately 80% of Swaziland’s 

electricity that is imported from South Africa is assigned a grid emissions 

factor of zero, then the measured emissions reductions from the project 

would be close to zero, and the project would not be viable. The 

calculations presented in this PIN assume a South African grid 

emissions factor of 0.95 tons/MWh, weighted at 80%, and a Swazi grid 

emissions factor of zero, weighted at 20%. 

The project calculations do not account for the avoided methane 

emissions resulting from collecting and burning forest harvesting waste, 

rather than allowing it to decompose on the forest floor. 

Page 5 of 9


C. FINANCE 

TOTAL CAPITAL COST ESTIMATE (PRE-OPERATIONAL) 

Development costs 

US$ 61,000 (Feasibility studies, resource studies, validation, etc.) 

Installed costs 

US$ 827,000 (Property plant, equipment) 

Land US$ 0 

Other costs (please specify) US$ 0 

Total project costs US$ 889,000 

SOURCES OF FINANCE TO BE SOUGHT OR ALREADY IDENTIFIED 

Equity 

Name of the organizations, 

status of financing 

agreements and finance (in 

US$ million) 

Debt – Long-term 




US$ million) 

Debt – Short term 




US$ million) 

Carbon finance advance 

payments sought from the 

World Bank carbon funds. 

(US$ million and a brief 

clarification, not more than 5 

lines) 

SOURCES OF CARBON 

FINANCE 

Name of carbon financiers 

other than any of the World 

Bank carbon funds that your 

are contacting (if any) 

INDICATIVE CER/ERU/VER 

PRICE PER tCO 2 e 

Price is subject to negotiation. 

Please indicate VER or CER 

preference if known. 

Peak Timbers intends to finance the project with equity from its own 

balance sheet. 

$0 

$0 

$0 

N/A 

$20/CER 

TOTAL EMISSION REDUCTION PURCHASE AGREEMENT (ERPA) VALUE 

A period until 2012 (end of the US$992,256 

first commitment period) 

A period of 10 years 

US$2,480,640 


US$1,736,448 

Page 6 of 9


D. EXPECTED ENVIRONMENTAL AND SOCIAL BENEFITS 

LOCAL BENEFITS 

E.g. impacts on local air, 

water and other pollution. 

GLOBAL BENEFITS 

Describe if other global 

benefits than greenhouse gas 

emission reductions can be 

attributed to the project. 

The local environmental benefit of the project is primarily associated 

with the reduced risk of forest fire resulting from the collection and 

utilization of biomass residues from the forestry harvest operations. 

The primary global benefit of the project is the reduced emissions of 

greenhouse gases resulting from reduced grid electricity use. In 

addition, though not considered in our calculation of emissions 

reductions, the removal of forestry waste from the forest floor will reduce 

global warming through the minimization of wood decomposition and the 

associated methane emissions. 

SOCIO-ECONOMIC ASPECTS 

What social and economic The community of Piggs Peak will benefit from job creation resulting 

effects can be attributed to the from two primary aspects of the project. Firstly, the operation and 

project and which would not maintenance of the boilers and turbines, including the management of 

have occurred in a 

the biomass feedstock, will create an additional five to ten jobs at Peak’s 

comparable situation without sawmill facility. These direct employees are offered subsidized housing, 

that project 

health and education benefits, and a salary exceeding Swaziland’s 

Indicate the communities and minimum wage. Secondly, the collection and transport of harvesting 

the number of people that will waste from Peak’s forestry operations will create an estimated additional 

benefit from this project. sixty jobs. These workers would be employed by Peak contractors, as 

About ¼ page 

are all of the workers involved in Peak’s forestry operations. Peak’s 

contractors are also paid a fair local wage and have access to 

education, health, and housing benefits. 

What are the possible direct 

effects (e.g. employment 

creation, provision of capital 

required, foreign exchange 

effects) 

About ¼ page 

What are the possible other 

effects (e.g. training/education 

associated with the 

introduction of new processes, 

technologies and products 

and/or 

the effects of a project on 

other industries) 

About ¼ page 

Beyond the direct job creation associated with the project, Peak 

Timbers’ existing employees and the entire community of Piggs Peak 

will benefit from the increased economic stability of this local economic 

anchor industry and the reduced risk of catastrophic fire. 

See above. 

Peak anticipates that the project will have a demonstration effect for 

other forestry companies in Swaziland and South Africa. Given the high 

risk of local fires, demonstrating a viable economic model for removing 

harvesting waste from the forest floor, thereby reducing the fire risk, may 

have a significant impact on the local industry. 

Page 7 of 9


ENVIRONMENTAL 

STRATEGY/ PRIORITIES OF 

THE HOST COUNTRY 

A brief description of the 

project’s consistency with the 

environmental strategy and 

priorities of the Host Country 

About ¼ page 

This project is consistent with the priorities of the Government of 

Swaziland. In fact, Swaziland has retained GFA ENVEST, a German 

consultancy, to explore ways to promote biomass energy in Swaziland. 

GFA ENVEST visited with the management at Peak Timbers, and will 

include this PIN in their report to the EU funders of their work as an 

example of a project in development. 

Page 8 of 9


Peak Timbers Biomass CDM Project 

South African Rand 2008 2009 2010 2011 2012 2013 2014 2015 2016 

Revenues 

Reduced Grid Electricity Cost ZAR 4,415,161 5,518,952 6,898,689 6,898,689 6,898,689 6,898,689 6,898,689 6,898,689 

Sales of Electricity to Grid 0 1,164,240 1,164,240 1,164,240 1,164,240 1,164,240 1,164,240 1,164,240 1,164,240 

Avoided Grid Interuptions 0 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 2,400,000 

Costs 

Reduced Sales of Chips and Sawdust (8,141,450) (8,141,450) (8,141,450) (8,141,450) (8,141,450) (8,141,450) (8,141,450) (8,141,450) 

Operations and Maintenance of Turbines/boilers (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,000) (1,500,000) 

Investment (9,034,000) 

IRR 

subtotal w/o carbon credits -8% (9,034,000) (1,662,049) (558,258) 821,479 821,479 821,479 821,479 821,479 821,479 

Carbon Credits (Baseline A) 

Project Costs (555,900) 

Monitoring Costs (21,800) (21,800) (21,800) (21,800) (21,800) (21,800) (21,800) (21,800) 

Credit Revenues 2,703,898 2,703,898 2,703,898 2,703,898 2,703,898 2,703,898 2,703,898 2,703,898 

Carbon Credit subtotal (555,900) 2,682,098 2,682,098 2,682,098 2,682,098 2,682,098 2,682,098 2,682,098 2,682,098 

IRR 

Total Project Cashflow w/ credits 25% (9,589,900) 1,020,049 2,123,839 3,503,577 3,503,577 3,503,577 3,503,577 3,503,577 3,503,577 

US Dollars 2008 2009 2010 2011 2012 2013 2014 2015 2016 

Revenues 

Reduced Grid Electricity Cost 0 $405,061 506,326 632,907 632,907 632,907 632,907 632,907 632,907 

Sales of Electricity to Grid 0 106,811 106,811 106,811 106,811 106,811 106,811 106,811 106,811 

Avoided Grid Interuptions 0 220,183 220,183 220,183 220,183 220,183 220,183 220,183 220,183 

Costs 

Reduced Sales of Chips and Sawdust (746,922) (746,922) (746,922) (746,922) (746,922) (746,922) (746,922) (746,922) 

Operations and Maintenance of Turbines/boilers (137,615) (137,615) (137,615) (137,615) (137,615) (137,615) (137,615) (137,615) 

Investment (828,807) 

IRR 

subtotal w/o carbon credits -8% (828,807) (152,482) (51,216) 75,365 75,365 75,365 75,365 75,365 75,365 

Carbon Credits (Baseline A) 

Project Costs (51,000) 

Monitoring Costs (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) 

Credit Revenues 248,064 248,064 248,064 248,064 248,064 248,064 248,064 248,064 

Carbon Credit subtotal (51,000) 246,064 246,064 246,064 246,064 246,064 246,064 246,064 246,064 

IRR 

Total Project Cashflow w/ credits 25% (879,807) 93,582 194,848 321,429 321,429 321,429 321,429 321,429 321,429 

Page 9 of 9

A n n e x 8 : C a s h F l o w a n d A s s u m p t i o n s f o r E n e r g y E f f i c i e n c y P r o j e c t i n o r d e r 

t o A v o i d C o a l i n t h e S u g a r P r o c e s s i n g 

The following assumptions were considered in order to outline the cash flow. The assumed costs for investment and harvesting costs refer to 

data from RSSC. 

1) Regarding carbon revenues: 

a. 30,000 tonnes of coal are avoided, 

b. Each tonne of avoided coal reduces 2.13 t CO2 (project emissions already considered), 

c. The financial value of a carbon certificate is estimated at 10 Euros. 

d. The project lifetime is 10 years: It starts April 1, 2011 and will end on March 31, 2021. The first inflow of carbon credits will be after 1 year. 

e. All assumptions are stable over time 

2) Energy cost savings (coal): 

a. 530,000 tonnes of coal are avoided. 

b. The purchases price of each tonne of coal is estimated at 80 Euros. 

3) Transaction costs for the CDM projects: 

a. PDD development: 25,000 Euros 

b. Costs for the validation of the PDD by a DOE is estimated at 15,000 Euros. 

c. Costs for verification of the ongoing project by a DOE are estimated at 15,000 Euros. The verification is needed in order to 

receive carbon certificates. 

d. Registration costs for a CDM project at the Executive Board of the UNFCCC is estimated at 5,453 Euro. The fee depends on 

the size of the project. The registration fee is seen as an upfront payment for the first admin fee. 

4) Investment costs: 

a. Investment for energy efficiency measures are estimated at 15 million Euro. 

b. 7 million have to be paid at ordering the remaining 8 million at delivery. 

5) General assumptions: 

a. Lifetime of the project is 10 years. 

b. Discount factor is assumed at 8%. 


Cash Flow - CDM Project: Energy efficiency measures in order to avoid coal in the sugar processing in EURO 19. Nov 08 

Climate Project Calculation Cash Flow (pls assume dots as commas in the table) 

Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Inflows 

1 Carbon revenues (CER = 10 €) 639.000 639.000 639.000 639.000 639.000 639.000 639.000 639.000 639.000 639.000 6.390.000 

2 Energy cost savings (own) 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 24.000.000 

Total receipts 0 0 0 2.400.000 3.039.000 3.039.000 3.039.000 3.039.000 3.039.000 3.039.000 3.039.000 3.039.000 3.039.000 639.000 30.390.000 

discounted (8%) 0 0 0 1.764.072 2.068.292 1.915.085 1.773.227 1.641.877 1.520.257 1.407.645 1.303.375 1.206.829 1.117.434 217.555 15.935.648 



3 PDD 25.000 

4 Validation/ Verification 15.000 0 0 15.000 15.000 15.000 15.000 15.000 15.000 15.000 15.000 15.000 15.000 165.000 

5 Registration 5.453 0 0 0 5.453 5.453 5.453 5.453 5.453 5.453 5.453 5.453 5.453 54.530 

Total Operating costs 0 45.453 0 0 15.000 20.453 20.453 20.453 20.453 20.453 20.453 20.453 20.453 20.453 244.530 

Investment Costs 7.000.000 8.000.000 0 0 0 0 0 0 0 0 15.000.000 

Total Outlays 0 7.045.453 8.000.000 0 15.000 20.453 20.453 20.453 20.453 20.453 20.453 20.453 20.453 20.453 15.244.530 

discounted (8%) 0 6.040.340 6.350.658 0 10.209 12.889 11.934 11.050 10.232 9.474 8.772 8.122 7.521 6.963 12.488.163 

0 

Increm. Balance Cash-flow 0 -7.045.453 -8.000.000 2.400.000 3.024.000 3.018.547 3.018.547 3.018.547 3.018.547 3.018.547 3.018.547 3.018.547 3.018.547 618.547 

Cumulative Cash-flow 0 -7.045.453 -15.045.453 -12.645.453 -9.621.453 -6.602.906 -3.584.359 -565.812 2.452.735 5.471.282 8.489.829 11.508.376 14.526.923 15.145.470 

rate NPV 

Discount factor 8,0000% 0,926 0,857 0,794 0,735 0,681 0,630 0,583 0,540 0,500 0,463 0,429 0,397 0,368 0,340 

Incr net benefit discounted 0 -6.040.340 -6.350.658 1.764.072 2.058.084 1.902.197 1.761.293 1.630.827 1.510.025 1.398.171 1.294.603 1.198.707 1.109.913 210.591 3.447.484 


Incr net benefit discounted 0 -5.616.592 -5.694.242 1.525.243 1.715.899 1.529.290 1.365.437 1.219.141 1.088.518 971.891 867.760 774.786 691.773 126.567 565.472 

IRR 13,0492% 



Cash Flow - Project: Energy efficiency measures in order to avoid coal in the sugar processing without CDM in EURO 


Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 

Inflows 

Carbon revenues (CER = 10 €) 0 0 0 0 0 0 0 0 0 0 0 

Energy cost savings (own) 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 24.000.000 

Total receipts 0 0 0 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 0 24.000.000 

discounted (8%) 0 0 0 1.764.072 1.633.400 1.512.407 1.400.377 1.296.645 1.200.598 1.111.664 1.029.319 953.073 882.475 0 12.784.029 



PDD 0 

Validation/ Verification 0 0 0 0 0 

Registration 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

Total Operating costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 

0 

Investment Costs 7.000.000 8.000.000 0 0 0 0 0 0 0 0 15.000.000 

Total Outlays 0 7.000.000 8.000.000 0 0 0 0 0 0 0 0 0 0 0 15.000.000 

discounted (8%) 0 6.001.372 6.350.658 0 0 0 0 0 0 0 0 0 0 0 12.352.030 

Increm. Balance Cash-flow 0 -7.000.000 -8.000.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 2.400.000 0 

Cumulative Cash-flow 0 -7.000.000 -15.000.000 -12.600.000 -10.200.000 -7.800.000 -5.400.000 -3.000.000 -600.000 1.800.000 4.200.000 6.600.000 9.000.000 9.000.000 

rate NPV 


Incr net benefit discounted 0 -6.001.372 -6.350.658 1.764.072 1.633.400 1.512.407 1.400.377 1.296.645 1.200.598 1.111.664 1.029.319 953.073 882.475 0 432.000 

Discount factor12,0000% 0,893 0,797 0,712 0,636 0,567 0,507 0,452 0,404 0,361 0,322 0,287 0,257 0,229 0,205 

Incr net benefit discounted 0 -5.580.357 -5.694.242 1.525.243 1.361.824 1.215.915 1.085.638 969.320 865.464 772.736 689.943 616.020 550.018 0 -1.622.478 

IRR 8,6985% 



A n n e x 9 : C a s h F l o w a n d A s s u m p t i o n s f o r F u e l S w i t c h P r o j e c t : C o a l t o T r a s h 

i n t h e S u g a r M i l l s 




a. 52,000 tonnes of coal are avoided, 

b. Each tonne of avoided coal reduces 1.9 t CO2 (project emissions already considered), 

c. The financial value of a carbon certificate is estimated at 10 Euros. 

2) Energy coal saving: 

a. 52,000 tonnes of coal are avoided. 

b. The purchases price of each tonne of coal is estimated at 70 Euros. 


a. PDD development: 20,000 Euros. 

b. Costs for the validation of the PDD by a DOE is estimated at 15,000 Euro. 



d. Registration costs for a CDM project at the Executive Board of the UNFCCC is estimated at 656 Euro. The fee depends on the 

size of the project. The registration fee is seen as an upfront payment for the first admin fee. 

4) Trash provision: 

a. Transportation costs of trash to the mill are estimated at 1.61 USD per tonne of cane. 

b. Operation and maintenance costs for the choppers are estimated at 2.23 USD per tonne of cane. 

c. Costs for soil preparation are estimated at 1.30 USD per tonne of cane. 

d. 1 USD = 0.71 Euro 

e. 1 hectare of sugar cane = 100 tonnes of cane = 10 tonnes of trash 

f. 52,000 tonnes of coal require 87,000 tonnes of trash 



a. Costs for chopper harvesters are estimated at 250,000 USD per chopper. 

b. Costs for collection equipment are estimated at 124,114 USD per chopper. 

c. Costs for trash processing are estimated at 45,098 USD per chopper. 

d. Assuming that 18 choppers are needed in order to harvest 8,700 ha land. 

e. Additional costs for modification on boilers, feed in system at the mill and storage facilities are estimated at 1.5 million Euros. 

f. 1 USD = 0.71 Euro 


a. Lifetime of the project is 10 years 

b. Discount factor is assumed at 8% 


Cash Flow - CDM Fuel Switch Project: Coal to Trash in the Sugar Mills in EURO 


Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 

Carbon revenues (CER = 10 €) 988.000 988.000 988.000 988.000 988.000 988.000 988.000 988.000 988.000 988.000 9.880.000 

Energy coal saving (own) 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 36.400.000 

Total receipts 0 3.640.000 4.628.000 4.628.000 4.628.000 4.628.000 4.628.000 4.628.000 4.628.000 4.628.000 4.628.000 988.000 46.280.000 

discounted (8%) 0 3.120.713 3.673.856 3.401.718 3.149.739 2.916.425 2.700.394 2.500.364 2.315.152 2.143.659 1.984.870 392.348 28.299.239 



PDD 20.000 

Validation/ Verification 15.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 115.000 

Registration 656 0 656 656 656 656 656 656 656 656 656 6.560 

Trash provision 0 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 31.749.780 

Total Operating costs 35.656 3.174.978 3.184.978 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 10.656 31.891.340 

0 

Investment Costs 4.697.163 0 0 0 0 0 4.697.163 

Total Outlays 4.732.819 3.174.978 3.184.978 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 3.185.634 10.656 36.588.503 

discounted (8%) 4.382.239 2.722.032 2.528.338 2.341.536 2.168.089 2.007.490 1.858.787 1.721.099 1.593.610 1.475.565 1.366.264 4.232 24.169.281 

Increm. Balance Cash-flow -4.732.819 465.022 1.443.022 1.442.366 1.442.366 1.442.366 1.442.366 1.442.366 1.442.366 1.442.366 1.442.366 977.344 

Cumulative Cash-flow -4.732.819 -4.267.797 -2.824.775 -1.382.409 59.957 1.502.323 2.944.689 4.387.055 5.829.421 7.271.787 8.714.153 9.691.497 

rate NPV 

Discount factor 6,0000% 0,943 0,890 0,840 0,792 0,747 0,705 0,665 0,627 0,592 0,558 0,527 0,497 

Incr net benefit discounted -4.464.923 413.868 1.211.589 1.142.489 1.077.820 1.016.811 959.256 904.958 853.734 805.410 759.820 485.710 5.166.542 


Incr net benefit discounted -4.382.239 398.681 1.145.517 1.060.182 981.650 908.935 841.607 779.265 721.542 668.095 618.606 388.117 4.129.958 


Incr net benefit discounted -4.225.731 370.713 1.027.115 916.650 818.437 730.748 652.453 582.547 520.132 464.403 414.646 250.860 2.522.972 

IRR 23,3042% 

C/B (8%) 1,170876349 


Cash Flow - Fuel Switch Project: Coal to Trash in the Sugar Mills without CDM in EURO 


Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 

Carbon revenues (CER = 10 €) 0 

Energy coal saving (own) 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 36.400.000 

Total receipts 0 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 3.640.000 0 36.400.000 

discounted (8%) 0 3.120.713 2.889.549 2.675.509 2.477.323 2.293.817 2.123.905 1.966.579 1.820.906 1.686.024 1.561.134 0 22.615.460 



PDD 

Validation/ Verification 0 

Registration 0 

Trash provision 0 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 31.749.780 

Total Operating costs 0 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 0 31.749.780 

0 


Total Outlays 4.697.163 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 3.174.978 0 36.446.943 

discounted (8%) 4.349.225 2.722.032 2.520.400 2.333.704 2.160.837 2.000.775 1.852.569 1.715.342 1.588.279 1.470.629 1.361.694 0 24.075.485 

Increm. Balance Cash-flow -4.697.163 465.022 465.022 465.022 465.022 465.022 465.022 465.022 465.022 465.022 465.022 0 

Cumulative Cash-flow -4.697.163 -4.232.141 -3.767.119 -3.302.097 -2.837.075 -2.372.053 -1.907.031 -1.442.009 -976.987 -511.965 -46.943 -46.943 

rate NPV 


Incr net benefit discounted -4.431.285 413.868 390.441 368.341 347.491 327.822 309.266 291.761 275.246 259.666 244.968 0 -1.202.415 





IRR -0,1822% 

C/B (8%) 0,939356359 


A n n e x 1 0 : C a s h F l o w a n d A s s u m p t i o n s f o r R e n e w a b l e E n e r g y C H P P r o j e c t b y 

t h e O u t - g r o w e r s 




a. Annually 16.4 GWh are exported to the national grid, 13.6 GWh are exported as thermal energy to a cooling or heating 

consumer near by. 

b. Each GWh electricity from the national grid substituted by renewable energy reduces 720 t CO2 (depending on grid factor), 

c. Project emissions are estimated at 20%, hence 1 GWh = 576 t CO2. 

d. The financial value of a carbon certificate is estimated at 10 Euros. 

2) Energy sales: 

a. 30 GWh are sold per year. 

b. The purchases price of 1MWh is estimated at 40 Euros. 


a. PDD development: 20,000 Euros 

b. Costs for the validation of the PDD by a DOE is estimated at 15,000 Euro. 



d. Registration costs for a CDM project at the Executive Board of the UNFCCC is estimated at 656 Euro. The fee depends on the 

size of the project. The registration fee is seen as an upfront payment for the first admin fee. 

4) Trash provision: 

a. Transportation costs of trash to the mill are estimated at 1.61 USD per tonne of cane. 

b. Operation and maintenance costs for the choppers are estimated at 2.23 USD per tonne of cane. 

c. Costs for soil preparation are estimated at 1.30 USD per tonne of cane. 

d. 1 USD = 0.71 Euro 

e. 1 hectare of sugar cane = 100 tonnes of cane = 10 tonnes of trash 

f. 1,500 ha = 150,000 tonnes of cane = 15,000 tonnes of trash 



a. Costs for chopper harvesters are estimated at 250,000 USD per chopper. 

b. Costs for collection equipment are estimated at 124,114 USD per chopper. 

c. Costs for trash processing are estimated at 45,098 USD per chopper. 

d. Assuming that 5 choppers are needed in order to harvest 1,500 ha land. 

e. Additional costs for biomass boiler and turbines, and storage facilities are estimated at 4 million Euros. 

f. 1 USD = 0.71 Euro 


a. Lifetime of the project is 10 years. 

b. Discount factor is assumed at 8%. 


Cash Flow - CDM Renewable Energy CHP Project by the Outgrowers in EURO 


Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 

Carbon revenues (CER = 10 €) 172.800 172.800 172.800 172.800 172.800 172.800 172.800 172.800 172.800 172.800 1.728.000 

Energy sales (own) 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 12.000.000 

Total receipts 0 1.200.000 1.372.800 1.372.800 1.372.800 1.372.800 1.372.800 1.372.800 1.372.800 1.372.800 1.372.800 172.800 13.728.000 

discounted (8%) 0 1.028.807 1.089.773 1.009.049 934.305 865.097 801.016 741.681 686.742 635.872 588.770 68.621 8.449.732 



PDD 20.000 

Validation/ Verification 15.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 10.000 115.000 

Registration 656 0 656 656 656 656 656 656 656 656 656 6.560 

Trash provision 0 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 5.474.100 

Total Operating costs 35.656 547.410 557.410 558.066 558.066 558.066 558.066 558.066 558.066 558.066 558.066 10.656 5.615.660 

0 


Total Outlays 4.923.757 547.410 557.410 558.066 558.066 558.066 558.066 558.066 558.066 558.066 558.066 10.656 10.503.761 

discounted (8%) 4.559.034 469.316 442.490 410.195 379.810 351.676 325.626 301.506 279.172 258.493 239.345 4.232 8.020.895 

Increm. Balance Cash-flow -4.923.757 652.590 815.390 814.734 814.734 814.734 814.734 814.734 814.734 814.734 814.734 162.144 

Cumulative Cash-flow -4.923.757 -4.271.167 -3.455.777 -2.641.043 -1.826.309 -1.011.575 -196.841 617.893 1.432.627 2.247.361 3.062.095 3.224.239 

rate NPV 


Incr net benefit discounted -4.645.053 580.803 684.617 645.346 608.817 574.355 541.845 511.174 482.240 454.943 429.192 80.581 948.858 


Incr net benefit discounted -4.559.034 559.491 647.283 598.854 554.494 513.421 475.389 440.175 407.570 377.379 349.425 64.390 428.838 


Incr net benefit discounted -4.396.211 520.241 580.378 517.778 462.302 412.770 368.544 329.057 293.801 262.323 234.217 41.618 -373.182 

IRR 9,9654% 

C/B (8%) 1,05346506 


Cash Flow - Renewable Energy CHP Project by the Outgrowers without CDM in EURO 

Climate Project CalculationCash Flow (pls assume dots as commas in the table) 

Year 1 2 3 4 5 6 7 8 9 10 11 12 Total 

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 

Inflows 

Carbon revenues (CER = 10 €) 0 

Energy sales (own) 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 12.000.000 

Total receipts 0 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 1.200.000 0 12.000.000 

discounted (8%) 0 1.028.807 952.599 882.036 816.700 756.204 700.188 648.323 600.299 555.832 514.659 0 7.455.646 



PDD 

Validation/ Verification 0 

Registration 0 

Trash provision 0 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 5.474.100 

Total Operating costs 0 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 0 5.474.100 

0 


Total Outlays 4.888.101 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 547.410 0 10.362.201 

discounted (8%) 4.526.019 469.316 434.552 402.363 372.558 344.961 319.408 295.749 273.841 253.557 234.775 0 7.927.098 

Increm. Balance Cash-flow -4.888.101 652.590 652.590 652.590 652.590 652.590 652.590 652.590 652.590 652.590 652.590 0 

Cumulative Cash-flow -4.888.101 -4.235.511 -3.582.921 -2.930.331 -2.277.741 -1.625.151 -972.561 -319.971 332.619 985.209 1.637.799 1.637.799 

rate NPV 


Incr net benefit discounted -4.611.416 580.803 547.927 516.912 487.653 460.050 434.010 409.443 386.267 364.403 343.776 0 -80.171 


Incr net benefit discounted -4.526.019 559.491 518.047 479.673 444.142 411.242 380.780 352.574 326.457 302.275 279.885 0 -471.452 



IRR 5,6315% 

C/B (8%) 0,940526476 




Name of Project: Energy Efficiency Measures in the Sugar Processing to Avoid Coal Input at RSSC 

Sugar Mill, Swaziland 

Date submitted: 


OBJECTIVE OF THE PROJECT 

Describe in not more than 5 lines 

PROJECT DESCRIPTION AND 

PROPOSED ACTIVITIES 

About ½ page 


EMPLOYED 












Country 

City 

Brief description of the location of 

the project 



Name of the Project Participant 

Role of the Project Participant 

Organizational category 


Address 

The objective of the proposed CDM project is to reduce emissions of GHG by 

avoiding the utilization of up to 30,000 tonnes of coal through implementing 

energy efficiency measures within the production line of the sugar plant. 

The project will reduce the consumption of energy based on fossil fuels in the 

sugar plant. The main activities of the proposed project include the 

implementation of energy efficiency measures to improve the sugar process 

and retrofitting an existing boiler. 

A technical planning has to be undertaken in order to identify and determine the 

possible measures. 

Beside the energy efficiency project RSSC is developing and implementing a 

fuel switch project in its mills. RSSC assumes due to high operating costs in the 

trash harvesting and preparation of it coal can only be partly substituted by 

trash. At remaining part of coal (up to 30,000 tonnes per year) should be 

avoided by energy efficiency measures. 

Several energy efficiency measures within the process will be undertaken. The 

measures cover the optimization of the existing process, the optimization of the 

operating model, and the change of inefficient process steps with state of the 

art technologies. 

The project will reduce CO2 emissions through the avoidance of coal use. 

Abatement 

Energy Efficiency 


Mhlume and Simunye 

The RSSC company is located in the north earthen part of Swaziland, with 

Simunye mill located at S26°10.629`E031°54.554`, and Mhlume mill located at 

S26°3.000`E031°49.000`. 

Royal Swaziland Sugar Corporation (RSSC) 

Project Owner and Investor 

Private Company 

Mr John Mark Sithebe 

General Manager, Manufacturing 

P.O. Box 1, Simunye 


Page 1 of 6


Telephone/Fax +268 313 4610 

E-mail and web address, if any 




Summarize the financials (total 

assets, revenues, profit, etc.) in 

not more than 5 lines 

Summary of the relevant 

experience of the Project 

Participant 






Estimate of time required before 

becoming operational after 

approval of the PIN 








years fixed 


project 


phase/opportunity study 

finished/pre-feasibility study 

finished/feasibility study 

finished/negotiations 


(mention what is applicable and 

indicate the documentation) 

Current status of acceptance of 

the Host Country 

jmsithebe@rssc.co.sz 

www.rssc.com 

The RSSC operates two sugar mills, Mhlume Sugar mill and Simunye Sugar 

mill. Mhlume produces 185,000 tonnes of sugar, whereas Simunye produces 

260,000 tonnes of sugar. RSSC also operates a sugar refinery, situated at the 

Mhlume mill, which produces 150,000 tonnes of refined sugar, and a 32 million 

litre capacity ethanol plant, which is situated adjacent to the Simunye mill. 

n/a 

RSSC is the biggest sugar producer in Swaziland. RSSC developed a CDM 

fuel switch project and validation took place in October 2008. RSSC will be in 

the position to manage all relevant technical and monitoring aspects of the 

project. 

2011 

Time required for financial commitments: n/a 

Time required for legal matters: n/a 

Time required for construction: n/a 

2012 

10 years 

10 years 

RSSC is still in the feasibility and planning stage. 

Swazi DNA is formally informed about the RSSC. The PIN was submitted in 

October 2008. 

The position of the Host Country 

with regard to the Kyoto Protocol 

Has the Host Country ratified/acceded to the Kyoto Protocol 

YES 

Has the Host Country established a CDM Designated National Authority / JI 

Designated Focal Point 

YES 

Page 2 of 6



ESTIMATE OF GREENHOUSE 

GASES ABATED/ 


In metric tons of CO 2 -equivalent, 

please attach calculations 



GHG emissions being lower than 

“business-as-usual” in the Host 

Country. At the PIN stage 

questions to be answered are at 

least: 

• Which emissions are 

being reduced by the 


project 


look like without the 


project 


ADDITIONALITY 

Please explain which additionality 

arguments apply to the project: 

(i) there is no regulation or 

incentive scheme in place 

covering the project 

(ii) the project is financially weak 

or not the least cost option 

(iii) country risk, new technology 

for country, other barriers 

(iv) other 


Please describe the laws, 

regulations, policies and 

strategies of the Host Country 

that are of central relevance to 

the proposed project, as well as 

any other major trends in the 

relevant sector. 

Please in particular explain if the 

project is running under a public 

incentive scheme (e.g. 

preferential tariffs, grants, Official 

Development Assistance) or is 

required by law. If the project is 

already in operation, please 

describe if CDM/JI revenues 

were considered in project 

planning. 

Up to 63,900 CER/year by substituting coal 

During the whole project lifetime of 10 years the proposed project would 

mitigate 639,000 t of CO2e. 

The sugar mills operated by RSSC currently uses bagasse and coal to produce 

energy in form of electric power and heat (steam), which is used for sugar 

processing. Currently, approx 45,000 tonnes of coal are burnt by both sugar 

mills per year. In the baseline scenario the sugar mills will continue to use coal 

to meet their high energy demand, which cannot be covered totally by biomass. 

This situation will continue due to high investment costs for the application of 

energy efficiency measures. 

Therefore this project intends to reduce CO2 emissions which results from coal 

combustion. 

Hence in the baseline scenario 2.37 tonnes of CO2 per combusted tone of coal 

emit. 

However, the emission reduction is lower (approx. 2.13 tonnes CO2 per tonne 

of coal) because of project emissions. 

1. Financial Barrier: 

- High investments have to be undertaken, 

- The electricity price in Swaziland is very low (0.2 Eurocent/kWh). 

2. Technology Barrier: 

- Up to now such a project has not been implemented in Swaziland, 

3. Political and regulation barrier: 

- No feed in tariffs exist 

No regulations and policies are in place for energy efficiency and renewable 

energy. Hence, no feed-in tariff exists. Nevertheless, Swaziland stated in its 

energy policy the future importance of renewable energy and the objective to 

foster such projects. 

The proposed project is not running under a public incentive scheme nor is it 

required by law. 

The project is not in operation yet. 

Page 3 of 6


METHODOLOGY 

Please choose from the following 

options: 


(i) project is covered by an 

existing approved CDM 

Methodology or Approved CDM 

Small-Scale Methodology 

(ii) project needs a new 

methodology 

(iii) projects needs modification of 

an existing approved CDM 

Methodology 

The energy efficiency component can be developed while applying an existing 

approved CDM methodology. 

Depending on the size of the project it has to be decided to apply a small scale 

or large scale methodology. 

Page 4 of 6


C. FINANCE 



46,500 [EUR] 

(CDM Transaction costs) 

PDD Development: 25,000 € 

Validation: 15,000 € 

Registration: 6,500 € 

Including an annual verification and admin fee for the issuance of CER, a total 

CDM developing cost of: 255,000 € can be assumed. 

Investment costs 

Approx. 15 million [EUR] 

(Equipment, Technology, 

Services etc) 

Land 

n/a 

Other costs (please specify) Technical feasibility. The costs cannot be estimated so far. 

Total project costs 

n/a so far 


Equity 

n/a 

Name of the organizations, status 

of financing agreements and 

finance (in € million) 


n/a 





n/a 




Carbon finance advance n/a 

payments sought from the 

potential buyer of carbon 

certificates. 

(€ million and a brief clarification, 

not more than 5 lines) 

INDICATIVE CER/ERU/VER 10€/CER 



Please indicate VER or CER 

preference if known. 


A period until 2012 (end of the n/a 



Up to 6,390,000 Euro 


Up to 4,473,000 Euro 

Page 5 of 6




E.g. impacts on local air, water 

and other pollution. 

The implementation of this project will lead to a reduction of greenhouse gases 

in Swaziland. Through the measures intended by the project the Swazi sugar 

sector – being the most important industry of the country – will become more 

competitive in the international sugar markets due to decreasing energy costs. 


Describe if other global benefits 

than greenhouse gas emission 

reductions can be attributed to 

the project. 


What social and economic effects 

can be attributed to the project 

and which would not have 

occurred in a comparable 

situation without that project 

Indicate the communities and the 

number of people that will benefit 

from this project. 

About ¼ page 

What are the possible direct 

effects (e.g. employment 

creation, provision of capital 

required, foreign exchange 

effects) 

About ¼ page 

What are the possible other 

effects (e.g. training/education 

associated with the introduction 

of new processes, technologies 

and products and/or 

the effects of a project on other 

industries) 

About ¼ page 

ENVIRONMENTAL STRATEGY/ 

PRIORITIES OF THE HOST 

COUNTRY 

A brief description of the project’s 

consistency with the 

environmental strategy and 

priorities of the Host Country 

About ¼ page 

The project will initiate technology transfer due to the deployment of new 

efficient boilers and of several energy efficiency measures (state of the art 

technology). 

Swaziland will become less dependent on energy imports from South Africa. 

Globally, the project will contribute to progress towards fulfilling Kyoto Protocol 

agreements. 

By reducing production costs the company could continue to provide and 

extend social services to its employees and support to local communities. 

In case the company would not be in the position to maintain its operation as a 

result of being exposed to growing energy expenses and intensified 

international competition, the local labour market would suffer considerably. 

This refers not only to staff directly employed by the company but also to the 

out-growers sector. 

RSSC does not need to purchase coal from South Africa which leads to foreign 

currency saving of up to 2,400,000 Euro per year (30,000 tonnes of coal, 

purchase price of 80 Euro per tonne). The implementation of new technologies 

will result in an improvement of capacity building of RSSC staff. 

As pointed out above the new implemented technologies will require skilled 

personnel. Therefore, qualification and training measures need to be conducted 

in the course of setting up the project. 

. 

The proposed project is in line with the national development strategy goal and 

the national environment action plan which both call for: 

1. Improvement in energy efficiency 

2. Securing sufficient and reliable energy supply which in the short, 

medium and long term is economically viable, environmentally benign 

and socially acceptable. 

3. Maximizing the use of local energy resources to improve both access to 

energy and achieve energy security. 

Page 6 of 6



Name of Project: Fuel Switch, Energy Efficiency and Renewables to the Grid at Ubombo Sugar Limited, Swaziland 

Date submitted: 


OBJECTIVE OF THE PROJECT 


PROJECT DESCRIPTION AND 

PROPOSED ACTIVITIES 

About ½ page 

The project deals with the implementation of energy efficient measures and use 

of sugarcane residues (trash) to replace coal, and providing surplus electric 

power generated from burning biomass residues to the national electricity grid. 

Main objectives of the proposed project are the generation of renewable energy 

with additional biomass (residues from sugarcane such as tops and leaves) 

also referred to as “trash”, and to improve the sugar production process by implementing 

energy efficiency measures. Hence, further utilization of fossil fuel 

(coal) can be avoided in the sugar plant, and bioenergy generated from renewable 

sources will provide electricity to satisfy plant and irrigation requirements 

with the surplus exported to the national grid. 

The project will carry out the following activities: 

1) Modification of harvesting method from burning to green harvesting of 

sugarcane, and collection of biomass residues for use as steam generating 

fuel; 

2) Replacement of certain old inefficient boilers with a new more efficient 

biomass/bagasse boiler; 

3) Upgrading an existing boiler; 

4) Undertaking several technical energy efficiency measures within the 

sugar plant; 

5) Establishment of new turbines in order to produce electricity and heat 

(CHP). 

These project activities will lead to: 

1) Avoidance of firing 30,000 tons of coal per year; 

2) Substitution of approximately 14 GWh electricity used for irrigation from 

the public grid by own generated renewable electricity; 

3) Exporting of approximately 67 GWh of renewable electricity to a third 

party and the public grid in the first phase. While, in the second phase 

which starts from 2013 onwards, approximately 97 GWh renewable 

electricity will be exported annually. 

4) Avoidance of CH4 emissions occurring at uncontrolled burning of biomass 

due to green harvesting. 

Ubombo Sugar Limited started an internal research project in 2005 to evaluate 

the opportunity to use plant residues from harvesting the sugarcane plants 

(“trash”) as biomass fuel in combination with bagasse. This trial phase included 

tests for assessing the effects on boiler operation as well as the optimization of 

harvesting methods. In view of huge problems encountered in the development 

of straw-fired boiler technology (corrosion problems, ash melting point, NO2 

emissions etc.) and fuel supply logistics in Europe a research project proved to 

be necessary. 

Page 1 of 9



EMPLOYED 












Country 

City 

Brief description of the location of 

the project 


The project will be implemented in 2 phases. 

From 2011 to 2013 the production capacity will be improved to 500 tch. The 

second improvement phase allows a capacity increase to 580 tch, which leads 

to a higher potential to generate electricity. 

Increasing boiler pressure on the No.7 Boiler at Ubombo from 31 bar to 45 bar; 

Installing a new biomasss/bagasse boiler with a pressure of 45 bar; 

Two new high efficiency turbine-alternator sets (one condensing and one back 

pressure); 

Various energy efficiency measures in the sugar plant leading to an improvement 

in plant thermal efficiency from 58 to 50 % steam on cane (i.e. 500 kg 

steam demand for 1,000 t sugar cane), and to a reduction of electricity demand. 

CO 2 

Abatement 

Energy efficiency and Fuel switch 


Big Bend 

The Ubombo sugar factory was built in 1965 and is the oldest sugar plant in 

Swaziland. Big Bend is a small town in the eastern part of Swaziland, lying on 

the Lusutfu River between 26° 49' 0" South, and 31° 56' 0" East. The satellite 

image below shows Big Bend, the sugarmill and surrounding sugarcne fields. 

Page 2 of 9



Name of the Project Participant 

Role of the Project Participant 

Organizational category 


Address 

Telephone/Fax 

E-mail and web address, if any 


Ubombo Sugar Limited 

Project Owner 

Private Company 

Mr John Hulley 

General Manager - Operations 

P.O. Box 23, Big Bend 

L311, Swaziland 

+268 363 8115 

mhlatshwayo@illovo.co.za 

www.illovosugar.com 

The main activities of Ubombo Sugar Limited are sugarcane growing and 

processing. Ubombo Sugar Limited owns 7,594 ha of sugarcane cultivation 

area; additional 11,000 ha of sugarcane plantations are managed by out- 

Page 3 of 9


growers delivering harvested cane to the mill. In 2007 Ubombo Sugar Limited 

processed approximately 1,800,000 t of sugar cane and produced around 

220,000 t per year of sugar. 

The plant in Ubombo has three main units: Steam and power generation, sugar 

mill and refinery. 

The activities of Ubombo within the CDM project consist of: 

- Implementation, management and monitoring of the project 

- Operation of the plant 

- Provision of biomass 

- Consumption of electricity and heat (CHP) 

- Supply of electricity to a third party and the national grid 


Summarize the financials (total 

assets, revenues, profit, etc.) in 

not more than 5 lines 

Summary of the relevant experience 

of the Project Participant 






Estimate of time required before 

becoming operational after approval 

of the PIN 








years fixed 


project 


phase/opportunity study finished/pre-feasibility 

study finished/feasibility 

study finished/negotiations 


(mention what is applicable and 

indicate the documentation) 

Current status of acceptance of 

the Host Country 

n/a 

Ubombo Sugar Ltd is part of Illovo Sugar, a leading global sugar producer and 

a significant manufacturer of high-value downstream products. The group is 

Africa’s biggest sugar producer and has extensive agricultural and manufacturing 

operations in six African countries. Ubombo Sugar will be in the position to 

manage all relevant technical and monitoring aspects of the project. 

2011 

Time required for financial commitments: n/a 

Time required for legal matters: n/a 

Time required for construction: End of construction work expected by April 2011 

2012 

Up to 21 years 

7 years twice renewable 

Technical pre-feasibility study finished; 

Technical feasibility study to be completed early 2009. 

Swazi DNA is informally informed about the Ubombo project and has indicated 

its support. 

The position of the Host Country 

with regard to the Kyoto Protocol 

Swaziland ratified the Kyoto Protocol on January 13, 2006. 

Page 4 of 9


The DNA is established and operational: 

Ministry of Public Works and Transport 

P.O. Box 58 

Meteorology Building 

Mbabane 

Mr. Emmanuel Dumisani Dlamini, 

( ed_dlamini@swazimet.gov.sz ) 

UNFCCC National Focal Point 

Phone: (268)404-5728/6274/8859 

Fax: (268-40)4-1530/2364 

Page 5 of 9



ESTIMATE OF GREENHOUSE 

GASES ABATED/ 


In metric tons of CO 2 -equivalent, 

please attach calculations 

(1) The project will reduce approximately 70,000 CO2e/year resulting from 

avoiding further use of fossil fuel. This calculation is based on replacing 

around 30,000 tons of coal and assuming a conservative emission factor 

for coal. The IPCC default value of 2.879 CO2e/ton has not been 

used as it assumes the replacement high-calorific coal. 

(2) The project will reduce up to 58,320 CO2e/year by substituting electricity 

from the grid through own generated renewable energy in the first 

phase. The calculation is based on the replacement of up to 14 

GWh/year of grid electricity which is currently purchased from SEC for 

irrigation, and 67 GWh which will be generated based on biomass residues 

and exported to a third party and to the grid. A grid emission factor 

of 720 CO2e/GWh is assumed 

After additional improvements in the sugar plant (2013) additional generated 

electricity can be exported. Hence, in the second phase the 

emission reduction is expected to increase to 79,920 CO2e/year based 

on replacement of grid electricity of 111 GWh/year. 

(3) CO2e reduction resulting from the abatement of CH4 emissions cannot 

be provided at this point in time. The calculation will be made in the 

course of PDD development. 



GHG emissions being lower than 

“business-as-usual” in the Host 

Country. At the PIN stage questions 

to be answered are at least: 

• Which emissions are being 

reduced by the proposed 

CDM/JI project 


look like without the proposed 

CDM/JI project 


In absence of the project activity, fossil fuel combustion in the boilers for energy 

generation in the sugar mill will continue. Additionally, Ubombo Sugar will further 

utilize electricity from the public grid that is mainly coal based. 

Uncontrolled burning of biomass residues will continue to take place due to a 

lack of incentives to change the traditional harvesting methods. 

The project will reduce the following greenhouse gases: 

• CO2: due to fossil fuel combustion and use of electricity from the public 

grid 

• CH4: due to uncontrolled biomass burning. 

For the purpose of determining baseline emissions, the following CO2 emission 

sources are included: 

• CO2 emissions from fossil fuel fired power plants at the project site 

and/or connected to the electricity system; 

• CO2 emissions from fossil fuel based heat generation that is displaced 

through the project activity. 

• CH4: due to uncontrolled biomass burning. 

Page 6 of 9


ADDITIONALITY 

Please explain which additionality 

arguments apply to the project: 

(i) there is no regulation or incentive 

scheme in place covering the 

project 

(ii) the project is financially weak 

or not the least cost option 

(iii) country risk, new technology 

for country, other barriers 

(iv) other 


Please describe the laws, regulations, 

policies and strategies of 

the Host Country that are of central 

relevance to the proposed 

project, as well as any other major 

trends in the relevant sector. 

1. Financial barriers: 

- The electricity price in Swaziland is very low (0.2 Eurocent/kWh), 

hence, for the time being financially it is not attractive to generate electricity 

in order to feed into the grid; 

- Employing state-of-the-art technical equipment for energy saving in the 

sugar mill requires high investments; 

- Change to green harvesting requires high investments in equipment 

and extra costs due to transportation; 

- 3 year trails had to be undertaken in order to estimate the technical applicability 

of using trash for energy production purposes. 

2. Technology barriers: 

- The use of trash within the sugar industry is uncommon worldwide, So 

far no such project has been implemented in Swaziland, i.e. this project 

would be the first of its kind 

3. Political and regulation barriers: 

- There are no preferred prices (feed-in tariffs) for electricity produced 

from renewable sources; 

- There are no incentives in place promoting the use of renewable energy. 

No regulations and policies are in place for energy efficiency and renewable 

energy. Hence, no feed-in tariff exists. Nevertheless, Swaziland stated in its 

energy policy the future importance of renewable energy and the objective to 

foster such projects. 

The proposed project is not running under a public incentive scheme nor is it 

required by law. 

Please in particular explain if the 

project is running under a public 

incentive scheme (e.g. preferential 

tariffs, grants, Official Development 

Assistance) or is required 

by law. If the project is already in 

operation, please describe if 

CDM/JI revenues were considered 

in project planning. 

METHODOLOGY 

Please choose from the following 

options: 


(i) project is covered by an existing 

approved CDM Methodology 

or Approved CDM Small-Scale 

Methodology 

(ii) project needs a new methodology 

(iii) projects needs modification of 

an existing approved CDM Methodology 

The project “Restructuring and Diversification Management Unit to coordinate 

the implementation of the National Adaptation Strategy to the EU Sugar 

Reform, SWAZILAND” (EuropeAid/125214/C/SER/SZ) covers part of the 

project development costs. 

The project is not in operation yet. 

Both, the fuel switch as well as the energy efficiency component can be developed 

while applying existing approved CDM methodologies. 

However, the tool to determine the national grid factor, provided by the 

UNFCCC, is not applicable so far. 

Page 7 of 9


C. FINANCE 



46,500 [EUR] 

(CDM Transaction costs) 

PDD Development: 25,000 € 

Validation: 15,000 € 

Registration: 6,500 € 

Investment costs 

(Equipment, Technology, Services 

etc) 

Land 

Other costs (please specify) 

Total project costs 

Including an annual verification and administration fee for the issuance of CER, 

a total CDM developing cost of around 250,000 € can be assumed. 

n/a (exact investment cost can only be provided after technical feasibility study 

has been completed) 


n/a 


Equity 

Ubombo Sugar Limited will act as principal investor 





n/a 





n/a 




Carbon finance advance payments 

sought from the potential 

n/a 

buyer of carbon certificates. 

(€ million and a brief clarification, 

not more than 5 lines) 

INDICATIVE CER/ERU/VER 10 € / CER 



Please indicate VER or CER preference 

if known. 


A period until 2012 (end of the Up to 2,566,400 Euro 



Up to 14,560,000 Euro 


Up to 10,062,400 Euro 

Please provide a financial analysis for the proposed CDM/JI activity, including the forecast financial internal rate of 

return for the project with and without the Emission Reduction revenues. Provide a spreadsheet [to be included in a 

proper format at a later date] to support these calculations. 

Page 8 of 9




E.g. impacts on local air, water 

and other pollution. 

The implementation of this project will require the application of new sugarcane 

harvesting methods partly replacing the old traditional burning of sugar cane on 

the fields which normally results in severe air pollution (mitigation of CH 4 emissions) 

from smoke. 

Additionally, more organic material will be left on the fields (only half of the 

available trash will be used) to improve soil fertility. 

Energy production from renewable sugarcane residues instead of coal combined 

with energy efficiency measures will lead to less GHG emission. 


Describe if other global benefits 

than greenhouse gas emission 

reductions can be attributed to 

the project. 


What social and economic effects 

can be attributed to the project 

and which would not have occurred 

in a comparable situation 

without that project 

Indicate the communities and the 

number of people that will benefit 

from this project. 

About ¼ page 

What are the possible direct effects 

(e.g. employment creation, 

provision of capital required, foreign 

exchange effects) 

About ¼ page 

The project will initiate technology transfer due to the deployment of new efficient 

boilers and of several energy efficiency measures (state of the art technology). 

Swaziland will become less dependent on energy imports from South Africa. 

Globally, the project will contribute to progress towards fulfilling Kyoto Protocol 

agreements. 

Through the measures intended by the project the Swazi sugar sector – being 

the most important industry of the country – will become more competitive in 

the international sugar markets due to decreasing energy costs. 

By reducing production costs the company could continue to provide and extend 

social services to its employees and support to local communities. 

In case the company would not be in the position to maintain its operation as a 

result of being exposed to growing energy expenses and intensified international 

competition, the local labour market would suffer considerably. This refers 

not only to staff directly employed by the company but also to the out-growers 

sector. 

An extension of mechanical harvesting (choppers) will possibly lead to a loss of 

seasonal job opportunities for cane cutters normally employed by the company 

during harvesting season. 

On the other hand, it will create new qualified permanent jobs required for setting 

up and operating the new sector of biomass treatment and transport. 

What are the possible other effects 

(e.g. training/education associated 

with the introduction of 

new processes, technologies and 

products and/or the effects of a 

project on other industries) 

About ¼ page 

ENVIRONMENTAL STRATEGY/ 

PRIORITIES OF THE HOST 

COUNTRY 

A brief description of the project’s 

consistency with the environmental 

strategy and priorities of the 

Host Country 

About ¼ page 

As pointed out above the new harvesting system will require skilled personnel. 

Therefore, qualification and training measures need to be conducted in the 

course of setting up the project. 

The activity will also have an extension effect. New technologies and business 

opportunities implemented at the production areas owned by the company 

could be replicated by the out-grower cooperatives. 

The proposed project is in line with the national development strategy goal and 

the national environment action plan which both call for: 

1. Improvement in energy efficiency 

2. Securing sufficient and reliable energy supply which in the short, medium 

and long term is economically viable, environmentally benign and 

socially acceptable. 

3. Maximizing the use of local energy resources to improve both access to 

energy and achieve energy security. 

Page 9 of 9

A n n e x 1 3 : W o r k i n g G r o u p o n t h e G r i d F a c t o r 

Background 

The Kingdom of Swaziland is in a process of developing Clean Development Mechanism 

(CDM) projects. In the process it has been noted that there is a need to define the grid factor 

in order to qualify for emission reduction credits. Faced with the problem of defining the grid 

factor a small stakeholders working group has been established. 

Representation of the Stakeholders working group 

The following institutions have been decided to be members of this group. 

1) Designated National Authority (DNA) 

The role of the DNA is to coordinate the working group and be able to issue the 

necessary documentation that will define the grid factor. 

2) Ministry of Natural Resources and Energy 

Since the need for grid factor is required for project that involves the use of 

energy, they will provide guidelines on energy policy issues and other government 

interest on issues related to energy. 

3) Ministry of Economic Planning and Development, 

This ministry is responsible for all projects that are in partnership with 

government. They also deal with issues related to sustainable economic 

development strategies. Their present will help when we have to decided on how 

economic the proposed project. 

4) Swaziland Electricity Company, 

They own the national energy grid and since the projects have the potential of 

feeding power back to national grid they need to express their view on the issue 

of defining a national grid. 

5) The Attorney General’s Office 

This office deals with all legal maters that involve the government and they also 

act as an advisory to government on legal matters. If we have to draw a document 

that defines grid factors we need to know what the legal implications are. 

6) Swaziland Environmental Authority 

This office verifies the conducted environmental impact assessment which is 

presented in the PDD. However, so far it is not decided who could be their 

representative, but the Director is expected to give a guideline. 

This group will be coordinated by the DNA office headed by Mr. Emmanuel Dumisani Dlamini 

and he will be supported by Mr. Henry Shongwe the Director of Energy. 


Restructuring & Diversification Management Unit to 

coordinate the implementation of the NATIONAL 

ADAPTATION STRATEGY to the EU Sugar Reform, 

SWAZILAND 

Workshop 

Kyoto Projects in Swaziland 

26 September 2008 

Restructuring & Diversification Management Unit 1

Introduction: Energy and Carbon Assignment 

Global Objective 

The global objective of the Energy/Carbon assignment 

on behalf of RDMU is to enhance the efficiency and 

hence the profitability of the sugar sector along the 

value chain starting from the smallholder sugar cane 

growers via the transporters to the millers 

Specific Objectives 

Data collection and assessment of opportunities for 

cost savings in the energy sector (energy efficiency, 

use of renewable energy) 

Identification and development of bankable and 

implementable projects 

Assessment of co-funding through the CDM of the 

Kyoto Protocol: Project Idea Notes (PIN), Project 

Design Documents (PDD) 

2

Introduction Kyoto Protocol and CDM 

3

Introduction Kyoto Protocol and CDM 

KYOTO Protocol: The Market Participants 

Carbon Credit BUYERS : 

Governments of countries having a huge compliance 

gap (e.g. Italy, Spain, Austria, Denmark, etc.) 

Multilateral Funds (e.g. WB or EBRD carbon funds) 

Companies from Annex-1 countries with an emission 

problem (e.g. Western-European power utilities) 

Private investors 

Carbon Credit SELLERS : 

Annex-1 companies with emission allowance surplus 

CDM and JI project owners 

4


CDM Project opportunities in Swaziland 

Energy/Carbon projects in the Sugar Industry 

Background: 

The Swazi sugar industry currently covers its energy 

demand by firing bagasse and coal, and by purchasing 

electricity from the national grid 

Sugar companies are confronted with rising energy prices, 

both for coal as well as for power from the grid 

Investments are required to reduce the consumption of 

energy in sugar plants. Saving energy costs projects will 

make a sugar company - as well as related smallholder 

cooperatives of sugarcane growers - more competitive in 

the internationally sugar markets. 

Sugar companies can support the development of national 

power production capacities by being in the position to feed 

surplus electricity produced from renewables to the public 

grid. 

6

Project opportunities in Swaziland 


The objective of proposed CDM projects in the sugar 

industry is to reduce GHG emissions by 

1) Avoiding the utilization of coal through 

implementing energy efficiency measures within the 

production line of the sugar plant and/or substitution 

of coal through biomass (fuel switch); 

2) Substituting fossil fuel based energy taken from 

the electricity grid with power generated from own 

(new) renewable energy sources; 

3) Feeding surplus renewable energy into the public 

electricity grid. 

7

CDM Project opportunities in Swaziland 


o Energy efficiency measures in sugar production 

e.g.: 

- Installation of more efficient boilers and/or increase the 

pressure of existing boilers 

- Replacement of steam drives by electric drives 

- Avoidance of steam leakages 

- Installation of frequency converters 

o Production of energy from additional biomass 

(trash) 

Utilization of plant residues from harvesting sugarcane 

plants (“trash”) as biomass fuel for CHP either in 

combination with bagasse or as single fuel in special boilers 

8



CDM Potential: 

(Assumptions: grid factor = 800 CO2eq/GWh, CER = 10 Euro) 

o Fuel Switch 

30,000 t coal subst. by 80,000 t trash 

Benefit: 3.15 Mio Euro per year 

- Coal savings: 2.4 million Euro/year 

- 75,000 CER : 750,000 Euro/year 

o Energy Efficiency 

up to 60 GWh savings 

Benefit: up to 2 Mio Euro per year 

- Energy cost savings: 1.5 million Euro/year 

- 48,000 CER : 480,000 Euro/year 

9




(Assumptions: grid factor = 800 CO2eq/GWh, CER = 10 Euro) 

o “Feeding Electricity to the Grid” 

from a CHP biomass plant while using 

heat for steam production in sugar 

factory 

Annual Feed-in: 250 GWh 

(corresponds to about 30MW installed capacity) 

Benefit: 

- 200,000 CER : 2 Mio Euro/year 

(for a project period of 10 years) 

10




“Biomass - Grid in Sugar Industry” 

SPV 

e.g.: Sugar Assets Ltd. 

Sugar Mills 

Out-Growers 

MW CHP 

at Mill 1 

MW CHP 

at Mill 2 

MW CHP 

at Mill 3 

11


Energy Efficiency in Irrigation 

Project description 

Where the terrain is compatible, install centre 

pivot systems of irrigation which use energy 

efficient pumps and motors leading to 

Energy saving, 

Water usage reduction, 

Increase in cane production due to more 

efficient application of water, 

Labor savings, 

Permitting mechanical harvesting. 

12


Energy Efficiency in Irrigation 

Project example: 

Assuming an irrigated area of 8,000 ha using 

50 GWh/year ........ 

Switching from sprinkler system to centre pivot 

will result in 40% energy saving (i.e. 20 

GWh/year) 

= 16,000 CO2 equivalent 

= 160,000 Euros/year 

Within 10 years financial returns from carbon 

credit will amount to 1.6 Mio Euros 

corresponding to 13% of incremental cost 

13


Bioenergy Outside of Sugar Industry 

Project description: 

Biomass opportunities exist in the timber 

industry in form of: 

o chips, sawdust, off-cuts 

o forest residues from harvesting (including 

black wattle) 

o municipal solid waste 

14


Bioenergy Outside of Sugar Industry 

Proposed project: 

- lnstallation of two 30 t (steam) boilers running on 

biomass (560 tons per day) which are connected to a 

5 MWel turbine (CHP) 

- Will be able to generate 25 GWh (operating time of 

5,000 hrs/year) for selling electricity to the national 

grid plus providing thermal energy for own heat 

demand 

- Revenue of approx. 6.25 Mio Euros per year for feeding 

electricity to the grid and 0.25 million Euros from 

carbon credits per year 

15


Solar Heating in Housing - PoA 

Background: 

Water heating accounts for about 30% of an 

average household's total energy use 

Households use unsustainable firewood, coal or 

electricity from the national grid for thermal 

purposes such as hot water and space 

heating 

Project idea: 

Solar panels will provide alternative 

renewable thermal energy 

16



Average household: Approx. 1 t coal/year and 

1.5 MWh electricity/year 

Investment per Approx. 1,000 Euro 

household: 

Savings per household: 

Energy cost savings = 80 Euro 

Carbon credits ca. 2 CER/y/HH = 20 Euro 

CDM potential: 

5000 households = 10,000 CER/year 

Financial benefits: 

100,000 Euro/year from carbon credits 

400,000 Euro/year from energy cost savings 

17



PoA – Programmatic Approach: 

Same technology project concept 

Numerous dispersed activities 

Implemented over time (up to 27 years) 

Implemented by various stakeholders 

Aggregation of SSC can go beyond SSC limits 

POA 

Managing Entity 

Facilitates a 

policy /measure 

or goal 

CPA 

Implementer 

CPA 

Implementer 

CPA 

Implementer 

Achieve the 

emission reductions 

18


Fuel Switch in Transportation 

Background 

Worldwide 20% of GHG emissions are 

originated from the transport sector with an 

increasing tendency. Diesel and petrol are 

the most common transport fuels. LPG, 

biodiesel, pure plant oil (PPO) and ethanol 

are also in use and heavily discussed. 

Project idea 

Plant oil production on marginal land, in 

order to substitute diesel fuel with PPO in 

trucks (e.g. transport in sugar industry) 

19



Applicability: 

Marginal land, 

No competition with food (non-edible oil), 

No export to Annex 1 countries, 

Approved methodology so far for PPO only. 

Critical factors: 

Land availability, 

Yield (seed, fertilizer, water), and 

Labour availability. 

Engine modification could be requested, due to 

higher viscosity of PPO 

20



Carbon potential: 

GHG mitigation potential (project emissions included) 

1000 liter PPO = approx. 1 t CO2e 

1000 liter Biodiesel = approx. 0.5 t CO2e 

1000 liter EtOH = approx. 0.7 t CO2e 

10,000 t PPO (11 Mio Liter) 

= 20,000 ha Castor (marginal land: 1t seed/ha) 

= 20,000 ha Jatropha (marginal land: 2t seed/ha) 

Project case: 

Substituting 10,000 t PPO diesel fuel in trucks will lead 

to: 

Financial benefit: 

10,000 CER/y = 100,000 Euro/year 

10,000,000 l diesel = 9,000,000 Euro/year 

21


Energy Efficiency in Public Buildings 

Background 

International Emission Trading provides 

opportunities for co-financing efficient light 

bulb distribution. These activities result in a 

reduction of energy consumption which is 

based to some extent on fossil fuels. 

Project Idea 

Replacement of light bulbs in public buildings 

(ministries, schools, universities…) by more 

efficient light bulbs. 

22


Energy Efficiency in Public Buildings 

CDM Potential 

Replacement: 

100W bulb => CFL => energy savings of 80W/h 

Assuming 4 working hours => energy savings 115.2 

kWh/year 

Assuming 1,000,000 CFLs => energy savings of 230 

GWh/year 

Assuming a grid factor of 800 t CO2/ GWh => 

184,000 tCO2e/year 

Assuming CER price of 10 € => 1,840,000 Euro/year 

23


Forestry 

CDM options: 

Afforestation/Reforestation 

VER options: 

Conservation 

Forest management 

24

Open questions and next steps regarding CDM projects 

Grid factor 

Working group (DNA, Ministry of Energy, SEC) 

CER vs. VER 

PINs and PDDs 

25

Siyabonga! – Thank you! 

For further information please contact: 

joachim.schnurr@gfa-envest.com 

christine.clashausen@gfa-envest.com 

koechrichard@yahoo.com 

This project is funded by the European Union. 


A n n e x 1 4 : L i s t o f P a r t i c i p a n t s f o r t h e K y o t o 

W o r k s h o p 

List of Participants for the Kyoto Workshop on the 26th September 

2008 

Name 

Organisation 

1 Mr. Keith Ward RSSC 

2 Mr. Rainer Talanda Ubombo Sugar Estate 

3 Mr. Oswald Magwenzi Ubombo Sugar Estate 

4 Mr. Emmanuel Dlamini DNA; Meteology Department 

5 Ms. Lindiwe Dlamini MNRE 

6 Mr. Peterson Dlamini MNRE 

7 Mr. Jameson D. Vilakati SEA 

8 Mr. Mboni Dlamini SEA 

9 Mr. Steven Zuke SEA 

10 Mr. S.S. Tsabedze SEC 

11 Ms. Lindiwe Madonsela MOAC 

12 Mr. Donald S. Ndwandwe MEPD 

13 Mr. Christof Batzlen RDMU 

14 Ms. Elke Böhnert RDMU 

15 Mr Sibusiso Malaza RDMU 

16 Mr. David Myeni RDMU 

17 Mr Joachim Schnurr Study Team 

18 Mr Richard Koech Study Team 

19 Ms Christine Clashausen Study Team 


Restructuring and Diversification Management Unit (RDMU) 

to coordinate the implementation of the National Adaptation Strategy to the EU Sugar reform, Swaziland 

TERMS OF REFERENCE 

For the assignment of an expert team in the field of Renewable Energy in the RDMU 

1 B A C K G R O U N D 

Swaziland has an agricultural based economy, for which the sugar sector plays an important 

role. Sugar is also a key raw material for the agro-processing manufacturing sector. The 

sugar industry can be segmented into three parts: sugarcane growing, milling and marketing. 

Whilst the millers through large estates have predominantly undertaken sugarcane growing, 

the last decade has seen the entry of more medium and small-scale scale farmers. This was due 

to the lucrative economies of sugarcane growing as opposed to other agricultural activities. 

Recent developments have come to challenge lenge this scenario. The recent European Union 

(EU) sugar sector reforms are a significant factor in the shift of dynamics. The sucrose price 

(paid to the sugarcane farmer) is a function of the final (average) sugar price obtainable from 

sales to different markets. 

Swaziland has historically depended on the EU market for its sugar sales (through the EU- 

ACP Sugar Protocol), wherein Swaziland was selling about a quarter of its output at prices 

about three times the world market price. 

Given this high exposure, the EU reforms 

challenge the very viability of the sugar industry in Swaziland. This is more pronounced for 

smallholder sugarcane growers who are facing several challenges, making their operations 

marginally viable at the obtaining prices, and even more precarious under the mid-term 

outlook. 

In order to adjust to the EU Sugar Market Organisation, Swaziland has prepared a National 

Adaptation Strategy (NAS) which is a response to the declining performance of the sugar 

sector and is in particular a mitigation measure against the negative effects on the sugar 

sector and the wider economy that will result from the reform of the European Union sugar 

market (EU Sugar Market Organisation). The NAS foresees activities and investments to be 

funded amounting to € 350 million. 

The European Commission seeks to support Swaziland in the process of adaptation to the 

Sugar Market Organisation by co-financing important components of the NAS. One important 

contribution the EC will make within this adaptation process is the financing of the RDMU 

which is a semi-autonomous project implementation unit being in charge of the coordination 

and facilitation of the NAS implementation. Apart from the RDMU, a major funding 

contribution of the European Commission puts emphasis on the following three focal areas: 

• Improving the efficiency and cost effectiveness of the Swazi sugar sector along the 

value chain (farmers, transporters, sugar factories and export); 

• Facilitating diversification resulting in less dependency on the sugar sector; 

• Supporting the decentralisation and outsourcing of services up to now provided by 

the sugar sector. 

Further to the EC’s Response Strategy to the NAS, a Multi-annual Indicative Programme to 

cover programmes for the period 2007-10 has been developed. In it, assistance to 

smallholder farmers as well as major stakeholders of the sugar sector have been prioritised 

and would be financed in under the 2007 and 2008 allocation (with top-up funding in future 

years). 

1

In December 2007, a consortium comprising GFA Consulting Group ULG and Harewelle 

International Limited has been awarded the service contract for the Restructuring and 

Diversification Management Unit in Swaziland, funded by the European Commission. The 

contract value of this service contract amounts to approximately € 3.8 million and caters for 4 

long-term technical advisers and up to 130 person-months short-term experts. The contract 

started on 14 th of January 2008. 

Within the various short-term expert months, an input of a renewable energy expert is 

required for up to 200 work days within the implementation phase starting from 14 th January 

2008 to 13 th December 2010. Since most of the relevant fields the expert is proposed to 

cover, cannot be performed by one expert, we propose a team of up to 5 experts developing 

a sustainable energy concept, Project Idea Notes and a Project Design Document. The input 

of the renewable energy team will be undertaken in several missions within the project 

implementation period of the RDMU. 


Climatic Change and Kyoto (CDM) 

Climate change is any long-term significant change in the “average weather” that a given 

region experiences. In recent usage, especially in the context of environmental policy, the 

term "climate change" often refers to changes in modern climate (global warming). Current 

studies indicate that radiative forcing by greenhouse gases is the primary cause of global 

warming. 

The Kyoto Protocol is a protocol to the international Framework Convention on Climate 

Change with the objective of reducing Greenhouse gases (GHG) that cause climate change. 

Since the Kyoto Protocol entered into force, fossil-fuel-based carbon dioxide (CO 2 ) became a 

tradable commodity. The Clean Development Mechanism (CDM) is an arrangement under 

the Kyoto Protocol which allows to generate CO 2 certificates by project activities that mitigate 

GHG emissions. The generation of CO 2 certificates provides a co financing of the 

project activities. 

The procedure of generating certificates from a CDM project (called Certified Emission 

Reduction CER) involves various stakeholders and steps for quality assurance. The following 

illustration shows this procedure and the specific outcomes: 

2

Stakeholder/Resp. 

Project developer/ 

Project owner 

Procedure 

Project Identification 

Outcome 

PIN 

Project developer 

DOE 

DNA 

UNFCCC (EB) 

Project Design Document (PDD) 

Validation 

Letter of Approval 

Registration 

PDD 

LoA 

Project owner 

DOE 

Monitoring 

Verification 

Monitoring 

report 

UNFCCC (EB) 

Issuance of CER 

CER 

Legend: 

DOE = Designated Operational Entity (Entity which certifies the PDD and emission reduction)DNA = Designated 

National Authority of the host country 

EB = Executive Board for CDM (responsible entity within the UNFCCC) 

CDM in Swaziland 

Swaziland ratified the Kyoto Protocol in January 13th 2006. The National Meteorological 

Service is in charge of CDM projects and provides the services of the DNA (Designated 

National Authority). Hence, the legal and institutional framework is set in place in order to 

develop CDM projects. However, in Swaziland no CDM projects are registered so far. 

National Adaptation Strategy (NAS) and Renewable Energy 

As mentioned above switching from fossil fuels to renewable energy sources is a major 

objective of climate change mitigation. 

Investing in the bio-energy industry potentially offers alternative socio-economic opportunities 

regarding rural development, employment, technology transfer, and also reduces 

dependence on fossil fuel imports. Activities in the bio-energy sector could concentrate on 

energetic utilisation of biomass from e.g. organic waste from sugar cane fields and sugar 

processing. Particularly the more efficient utilisation of bagasse is considered to have a high 

economic potential. Ubombo particularly seeks to explore opportunities through fuel switch 

projects co-financed by carbon revenues. Additionally, the production of non-fossil liquid 

fuels (e.g. plant oil, biodiesel, bioethanol) is still under discussion. 

Further research, pilot projects and the identification of financing models, for instance 

through the Clean Development Mechanism under the Kyoto Agreement, are to be pursued 

under the NAS by the RDMU. 

3

3 D E S C R I P T I O N O F T H E A S S I G N M E N T 

3 . 1 G l o b a l O b j e c t i v e 

The global objective of this the assignment is to enhance the efficiency and hence the 

profitability of the sugar sector along the value chain starting from the smallholder sugar cane 

growers via the transporters to the millers. 

3 . 2 S p e c i f i c O b j e c t i v e s 

The specific objectives of this consultancy are the assessment and data collection in 

Swaziland and presentation of results and recommendations and the development of a 

sustainable energy concept, Project Idea Notes (PIN), Project Design Documents (PDD). 

3 . 3 R e q u e s t e d s e r v i c e s 

For this assignment, the output is the provision of 200 working days of technical assistance 

input for the assessment and data collection and the development of an energy concept, 

Project Idea Notes (PIN) and a Project Design Document. The assignment is split into two 

phases. 

3 . 4 E x p e c t e d r e s u l t s 

Within this assignment, the output of the Renewable Energy Expert team will be: 

a) 1. Phase: Assessment and data collection in Swaziland 

The objective is to assess and analyse the local experience, the relevant markets and 

conditions for sugar production and processing, available residues, use of biomass and the 

generation of bio-energy including future options such as the production of biofuels 

(bioethanol). 

The main findings and recommendations will be presented to main stakeholders and 

decision makers in Swaziland. The final results will be provided in a study report written in 

English, and outlining the current state, options and challenges of renewable energy 

generation in the sugar sector of Swaziland. 

Based on the outcomes of the first phase terms of reference and time schedule for the 2. 

phase will be defined by the project team. It can be assumed that objectives described under 

paragraph b) will be covered. However, currently it can not be predicted in which extent the 

proposed terms for the second phase have to be modified. 

b) 2. Phase: Development of an energy concept, and CDM cycle (PIN, PDD, validation, 

monitoring training, support in monitoring report and first verification) 

The objective of the energy concept is to provide a sustainable energy concept for the sugar 

sector in Swaziland based on a synthesis of analysed collected data (conditions) as well as 

current and future energy demand (including stakeholder participation). 

The option of CO 2 certificates generation will be evaluated and developed in order to provide 

co-financing for investment costs, costs for maintenance, and post-project activities. 

Activities regarding the CDM cycle cover: 

i) Development of Project Idea Notes (PINs) of potential CDM projects, 

4

ii) Development of Project Design Documents (PDDs) of projects which will be 

implemented 

iii) Including a training on how to monitor the GHG reduction, 

iv) Support during the validation and registration process, 

v) Support of the first verification process including the preparation of the first 

monitoring report. 

3 . 5 T a s k s a n d a c t i v i t i e s o f t h e r e n e w a b l e e x p e r t 

t e a m 

3 . 5 . 1 T a s k s a n d a c t i v i t i e s i n t h e 1 . P h a s e 

1. Analyses of the availability of organic resources at the farm and production 

sites of the sugar industry 

a. Description of location, amount, type and price of input and output products 

(including transportation aspect), 

b. Description of by-products and leftovers 

i. Relevant by-products (amount, location, type (e.g. bagasse, molasse 

(potential processing to CMS-fertilizer), use) 

ii. Market and prices 

iii. Main actors 

iv. Interrelation between by-products (sugar, ethanol (fuel) and alcohol 

(berverge)) 

v. Non used residues, description of treatment 

c. Description of infrastructure (transportation, equipment), 

d. Costs for energy, transportation, maintenance etc and future demand, 

e. Challenges. 

2. Analysis of other organic material which can be utilised for energy generation 

(e.g. agricultural solid residues, wood, organic waste and wastewater) 

a. Assessment of availability (transportation, price, season) of other agricultural 

production sites and animal farms nearby, 

b. Assessment of wood residues nearby (transportation, price, season; existence 

of forest management plans guaranteeing sustainable forest management), 

c. Assessment of availability of other organic waste (transportation, price, 

season) near by (restaurants, landfill, food production, breweries etc). 

3. Assessment of bio-energy options for stationary use (electricity, heat or 

cooling) and mobile use (bio-ethanol for transportation) and energy efficiency 

a. Assessment of current technical equipment, 

b. Assessment of improved potential via processing (Energy efficiency), 

c. Assessment of improved potential via future processing (e.g. BTL), 

d. Assessment of whether biomass boilers could substitute the existing coal 

combustion for energy generation 

4. Review of other options in the field of bio-energy 

5

a. Assessment of availability/restrictions of land, 

b. Assessment of potential use /establishment of energy plantations or energy 

crops, 

c. Review of possible sustainability standards in order to avoid conflicts 

regarding: food security, environmental aspects (energy/carbon balances, 

impact on biodiversity, water, soil forestry). 

5. Short review of other renewable energies regarding energy supply in the sugar 

sector 

a. Hydro energy, 

b. Solar energy, 

c. Wind energy. 

6. Assessment of current framework regarding renewable energy, CDM projects 

and energy in general 

a. Political framework of renewable energy sector, 

b. Overview and analysis of existing policy instruments (incentive system for 

renewable energies (subsidies, tax exemption), Feed-in-tariffs (renewable 

energy into the grid), 

c. Structure and main actors of the renewable energy sector, 

d. Import of energy and fuel, refinery and distribution system, 

e. Costs, prices and price setting system of energy/ fuels, 

f. National requirements for CDM projects (DNA). 

3 . 5 . 2 T a s k s a n d a c t i v i t i e s i n t h e 2 . P h a s e 

7. Assessment of bio-energy options for stationary use (electricity, heat or 

cooling) and mobile use (bio-ethanol for transportation) and energy efficiency 

a. Assessment of the production of bio-ethanol (biofuel) for transportation or/and 

stationary use, 

b. Suggestions for operating model (comparison ethanol vs sugar), 

c. Assessment of capacity, 

d. Outline of required equipment and estimation on investment and production 

prices. 


a. Identified renewable energy projects are outlined by a PIN, including CO2 

reduction potential, 

b. Development of Project Design Documents 

i. Including stakeholder consultation as defined under UNFCCC, 

ii. Including Environmental Impact Assessment as defined under 

UNFCCC, 

iii. Application for Letter of Approval from DNA Swaziland, 

c. Capacity Building regarding CDM procedure, including monitoring, 

d. Coordination of Validation and registration, 

e. Support regarding first monitoring report and first verification. 

6


a. Including potential co–financing options through CDM. 

10. Development of a suitable and sustainable energy concept for the utilisation of 

residues from the sugar cane cultivation and sugar production cycle 

a. Assessment of current energy demand and supply, 

b. Estimation of future energy demand based on future development plans, 

c. Development of sustainable energy concept via a synthesis of results from 

availability of biomass, technical options, infrastructure, and energy demand. 

4 E X P E R T P R O F I L E 

In order to perform this assignment, we propose to commission a team of 5 experts. 

All experts are characterised by the following qualification and skills: 

Qualification and Skills 

• University degree or professional experience relevant to the assignment 

• Good organisational 

• Ability to relate with multidisciplinary teams 

• Fluency in both written and spoken English 

• Computer literate 

• Good interpersonal relationships 

• Good reporting capabilities. 

Besides the qualification and skills above, they are characterised by the following general 

and professional experience: 

Expert 1: Renewable Energy and CDM Expert 

General professional experience 

• Preferably 10, but no less than 5 years of working experience in the sector of 

renewable energy; 

Specific professional experience 

• Development of Climate Change Projects under Clean Development Mechanism (CDM) 

and Joint Implementation (JI) as well as of financing concepts for environmental services 

(carbon, water, biodiversity); 

• Planning of bio-energy projects under JI and CDM; 

• Many years of experience in planning, operation and evaluation of technical and financial 

co-operation projects dealing with climate change, forestry, renewable energy, natural 

resources management and/or environmental protection. Assignments as project 

manager, long-term resource person for professional backstopping or short-time expert; 

• Conception and analysis of project strategies for forest management (social forestry, 

intensive forest management); 

7

• Planning and evaluation of projects dealing with the protection, rehabilitation and 

management of natural resources; 

• Design and application of management information systems (especially Geographic 

Information Systems [GIS] and monitoring systems); Application of remote sensing in 

environmental and natural resources management. 

Expert 2: Bioenergy and CDM Specialist 


• Preferably 5, but no less than 2 years of working experience in the sector of biofuel; 


• Development of Climate Change Projects under Clean Development Mechanism 

(CDM) and Joint Implementation (JI), 

• Bioenergy Expert: 

o 

o 

o 

o 

Liquid Biomass: Plant oil, Biodiesel, Bioethanol, BtL for stationary and mobil 

utilisation 

Solid Biomass: Combustion, Co-firing, Co-generation, Composting 

Gaseous Biomass: Biogas production from manure, organic waste, 

agricultural and organic residues; landfill gas recovery and utilisation 

Waste recycling concepts 

• Evaluation of projects dealing with the natural resource management, social and 

environmental impact assessment (with quantitative and qualitative (RRA, PRA) 

assessment tools). 

Expert 3: Agronomist and Sugar Expert 


• Preferably 15, but no less than 10 years of working experience in the sector of sugar 

cane; 


• Experienced in agricultural engineering, agronomy, irrigation, land development, 

harvesting and transport systems in the sugar industry. 

• Good understanding and experience of the EC Sugar Regime and accompanying 

measures 

• Experienced in successful feasibility and survey studies as well as cost-benefit 

analysis of farm and production sites of the sugar industry. 

• Experience in bagasse utilisation in energy generation 

• Experience in utilization of wastewater for purpose of sugar cane cultivation. 

• Know-how of the use of sugar cane and other crops for renewable energy. 

• Familiar with environmental issues. 

8

• Knowledge in development of energy concept in the utilisation of residues from the 

sugar cane cultivation and sugar production cycle. 

• Familiar with budgeting issues and EC guidelines on programming, country 

strategies. 

Expert 4: Technical Engineer for Sugar and Ethanol 


• Preferably 10, but no less than 5 years of working experience in the sugar sector, 

particularly sugar factories; 

• Robust knowledge of the ethanol sector 


• Experience in developing energy concepts; 

• Experience in mechanical engineering related to sugar factories with a view to 

expansion of capacities; 

• Knowledge in energy efficiency and processing; 

• Experience in assessment of technical viability of co-generation through organic 

matters; 

Expert 5: Technical Engineer for Sugar and Ethanol 


• Preferably 10, but no less than 5 years of working experience in the sugar sector, 

particularly sugar factories; 

• Robust knowledge of the ethanol sector and biomass 


• Experience in developing energy concepts emphasizing on biomass production and 

utilisation; 

• Experience in mechanical engineering related to sugar factories with a view to 

expansion of capacities; 

• Knowledge in operation of biomass boilers and investments for energy co-geenration; 

4 . 1 T h e c o n s o r t i u m ’ s p r o p o s e d T e a m 

We propose for the energy/climate change component of the RDMU we suggest to deploy an 

experienced team of experts with a solid professional and technical background in the 

development of renewable energy projects as well as of projects under the Kyoto Protocol. 

Our team combines excellent expertise in bio-energy and bio-fuels - in particular in relation to 

the sugar industry - renewable energy technologies, CDM expertise and participatory 

approaches with an experience in the project region. The team disposes already of some 

understanding of the complex resource, development and institutional situation and of the 

challenges in Swaziland. 

The composition and expertise of the team is a balanced mixture of expertise designed to 

ensure not only that each aspect is adequately addressed, but also that the team members 

9

est complement each other. The professional standard of each team member completely 

meets the identified requirements and has been proven successful in former feasibility and 

survey studies, as well as in other national and international projects in Swaziland and the 

region. The team members proposed are: 

FIELD OF COMPETENCE 

CDM Specialist in A/R projects, renewable 

energy, and energy efficiency 

NAME OF EXPERT 

Mr Joachim Schnurr 60 

CDM Specialist in Bioenergy and Biofuels Ms Christine Clashausen 55 

WORKING 

DAYS 

Agricultural Economist and Sugar expert Mr Richard K. Koech 25 

Technical Engineer for Sugar and Ethanol Mr Christian Schweitzer 50 

Process Engineer Electrical Engineering Mr Lutz Schützenmeister 10 

The full team will work closely together and will discuss the findings and options, especially 

regarding the energy concept that is based on findings from each expert. Mr Schnurr and Ms 

Clashausen are working together in Swaziland. Mr Schnurr as the team leader of this team 

will partly be based in Swaziland and partly based in Europe to assume full responsibility of 

the output of the assignment. Mr Schweitzer and Mr Schützenmeister are also working 

together, whereas Mr Schützenmeister will provide coaching and quality control from the 

headquarters. The responsibility for coordination of the back-up services will rest with GFA. 

He will directly communicate with the team and the parties involved, and will liaise with 

RDMU team leader. Overall backstopping will be provided by the GFA backstopping 

coordinator, Dr Elke Böhnert. 

4 . 2 R e s p o n s i b i l i t i e s a n d T e r m s o f R e f e r e n c e o f 

e a c h t e a m m e m b e r 

Mr Joachim Schnurr (RE Expert and CDM/JI Expert) 

1. Assessment of current framework regarding renewable energy and energy in general 

• Political framework of renewable energy sector, 

• Overview and analysis of existing policy instruments (Incentive system for renewable 

energies (subsidies, tax exemption), Feed-in-tariffs (renewable energy into the grid), 

• Structure and main actors of the renewable energy sector, 

• Importation of energy and fuel, refinery and distribution system, 

• Costs, prices and price setting system of energy/ fuels, 

• National requirements for CDM projects (DNA). 


• Identified renewable energy projects are outlined by a PIN, including CO 2 reduction 

potential, 

• Development of Project Design Documents, 

• Capacity Building regarding CDM procedure, including monitoring, 

• Coordination of Validation. 

10


• Potential co –financing options through CDM. 

4. Development of a suitable and sustainable energy concept in the utilisation of residues 

from the sugar cane cultivation and sugar production cycle 

• Development of sustainable energy concept via a synthesis of results from availability 

of biomass, technical options, infrastructure, and energy demand. 

Ms Christine Clashausen (Bioenergy and CDM Specialist) 

1. Analysis of other organic material which can be utilised for energy generation (e.g. 

agricultural solid residues, wood, organic waste and wastewater) 

• Assessment of availability (transportation, price, season) of other agricultural 

production sites and animal farms nearby, 

• Assessment of forest leftovers nearby (transportation, price, season; existence of 

forest management plans), 

• Assessment of availability of other organic waste (transportation, price, season) near 

by (restaurants, landfill, food production, breweries etc). 

2. Review of other options in the field of bio-energy 

• Assessment of availability/restrictions of land, 

• Assessment of potential use /establishment of energy plantations or energy crops, 

• Review of possible sustainability standards in order to avoid conflicts regarding to: 

Food security, environmental aspects (energy/carbon balances, impact on 

biodiversity, water, soil forestry). 


• Including stakeholder consultation (under UNFCCC regulatory), 

• Including Environmental Impact Assessment (under UNFCCC regulatory), 

• Application for Letter of Approval from DNA Swaziland, 

• Support regarding first monitoring report and verification process. 

4. Support in coordination of RE Team focussing reporting 

Mr Richard K. Koech (Agronomist and Sugar Expert) 

1. Analyses of the availability of organic resources at the farm and production sites of the 

sugar industry 

• Description of location, amount, type and price of input and output products (including 

transportation aspect), 

• Description of by-products and leftovers 

Relevant by products (amount, location, type, use) 

Market and prices 

11

Main actors 

Interrelation between by-products (sugar/ethanol/alcohol/CMS) 

Non used residues, description of treatment 

• Description of infrastructure (transportation, equipment), 

• Costs for energy, transportation, maintenance etc and future demand, 

• Challenges. 


• Focus on agricultural/ residues from sugar industry 

3. Development of a suitable and sustainable energy concept for the utilisation of residues 

from the sugar cane cultivation and sugar production cycle 

• Assessment of current energy demand and supply, 

• Estimation of future energy demand based on future development plans. 

Mr Christian Schweitzer (Technical Engineer for Sugar and Ethanol) 

Mr Lutz Schützenmeister (Process Engineer Electrical Engineering)) 

1. Assessment of bio-energy options for stationary use (electricity, heat or cooling) and 

mobile use (bio-ethanol for transportation) and energy efficiency 

• Assessment of current technical equipment, 

• Assessment of improved potential via processing (Energy efficiency), 

• Assessment of improved potential via future processing (e.g. BTL), 

• Assessment of whether biomass boilers could substitute the existing coal 

combustion for energy generation, 

• Assessment of the production of bio-ethanol (biofuel) for transportation or/and 

stationary use, 

• Suggestions for operating model (comparison ethanol vs sugar), 

• Assessment of capacity, 

• Outline of required equipment and estimation on investment and production prices. 

2. Short review of other renewable energies regarding energy supply in the sugar sector 

• Hydro energy, 

• Solar energy, 

• Wind energy, 


• Focus on investment of technical equipment 

5 L O C A T I O N A N D D U R A T I O N 

12

Starting period: The assignment will commence before 31th July 2008. 

Duration of the assignment: The assignment will take up to 200 work-days. 

Location: the expert team will be based in Mbabane with frequent travels in Swaziland and 

in the region under the supervision of the RDMU team. 

Indicative time schedule 

1. Phase: July 2008 – Sept 2008 (full team) 

1. Assessment of status quo and conditions 

2. Workshop with stakeholders of sugar industry of Swaziland 

1. Presentation of first results and recommendations 

2. Discussion on further procedure 

3. Development of TORs for the 2. Phase 

Expert Swaziland Home office Total 

J. Schnurr 20 7 27 

C. Clashausen 30 2 32 

R. K. Koech 18 2 20 

C. Schweitzer 15 5 20 

L. Schützenmeister 7 3 10 

Sub-total 90 19 109 

2. Phase : Nov 2008 till End of 2008 (Engineer and CDM experts) 

• Defined in the 1. phase: 

• Most probably: Assessment for energy strategy development 

• Most probably: PDD development of potential projects 


J. Schnurr 24 9 33 

C. Clashausen 10 10 

R. K. Koech 5 5 

C. Schweitzer 22 8 30 


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3. End 2009 (1,5 years later than phase 2) 

Monitoring and Verification of PDD projects (CDM expert) 


C. Clashausen 9 4 13 


6 D E L I V E R A B L E S 

Each specialist will provide a report of the findings made at the end of each mission and 

submitted via Mr Schnurr to RDMU team leader with a view to: 

• Report on 1. Phase: Results and Outcome from the assessment and Workshop (after 

1. Mission) 

• Defined Terms of Reference for the 2. Phase 

• PDD (Project Design Documents) (three weeks after 2. Mission) 

• Energy concept including CBA and technical equipment proposal (after 2. Mission) 

• Monitoring report (3. Mission) 

7 A D M I N I S T R A T I V E I N F O R M A T I O N 

The experts should be equipped with own laptop computer. Office space will be made 

available by the RDMU. 

The RDMU will provide transport for the period of the assignment. 

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Restructuring and Diversification Management Unit (RDMU) 

to coordinate the implementation of the National Adaptation Strategy to the EU Sugar reform, Swaziland 

TERMS OF REFERENCE 

For the assignment of an expert team to define the Swaziland grid factor 

1 B A C K G R O U N D 

The southern African region has one of the integrated electric power grids in Africa, and the 

construction of key transmission and distribution links between member states have allowed 

a sizeable increase in regional power trade over the last decade. The establishment of the 

Southern Africa Power Pool (SAPP) created the Short Term Energy Market (STEM) trading 

of electricity by the different member utilities which saw an increase in regional electricity 

imports and exports. Most of the installed capacity in the region is held in large coal power 

plants with a significant amount coming from hydro power plants. South Africa is the key 

player and a significant contributor to the regional power pool, generating approximately 80% 

of the electricity within the Southern African Development Community (SADC). 

An interconnection link between South Africa and Swaziland was established since 1973, 

and through this, Swaziland currently imports 80 percent of its electricity from South Africa 

through South Africa's power utility, Eskom. In February 2000 SEC 

joined the Southern 

African Power Pool. As a full member Swaziland is able to freely purchase power whenever 

prices are reasonable within the Power Pool, without being restricted to one supplier. The 

only electricity supply company in the country, Swaziland Electricity Company, has a total 

installed capacity of 50.6 MWel which is generated from 4 hydro power stations and one 

diesel generator, the latter only operated in emergency cases. 

In year 2000, a new 400kV line running across Swaziland and Arnot via Barberton and 

Komati port (South Africa) to Mozal in Mozambique was established. The line is co-owned by 

a company called Mozambique Transmission Company (Montraco), a joint venture between 

EDM, Eskom and SEC. The Montraco 400kV lines make allowances for the SEC to trade in 

the Southern African Power Pool and source future bulk supplies from other utilities in the 

SADC Region in addition to Eskom. 

The table below shows the total electricity sold and its origin of generation for the past four 

years by the Swaziland Electricity Company. Imported electricity from Eskom, South Africa is 

based on 88% coal, 5% nuclear and 7% hydro power; whereas electricity from EDM, 

Mozambique is based on 96% hydro power and 4% fossil fuels (diesel, natural gas and coal). 

In 2007 Swaziland imported 76% of its electricity from Eskom; 8.5% was purchased from 

STEM and EDM while the remaining 15.5% was generated in Swaziland. 

1

Table 1.1 Electricity Generated and Imported in 2004 - 2007 

2004 2005 2006 2007 

Imported power Eskom – GWh 765.2 768.7 774.2 841.5 

Imported power STEM & EDM – GWh 151.6 150.3 119.8 93.7 

Local generation – GWh 103.5 159.5 155.5 171.1 

Total Electricity Sales (GWh) 852.8 855.9 855.8 943.5 

Source: Swaziland Electricity Board: Annual Report 2006-2007 


Swaziland as a party to the Kyoto seeks to benefit from the clean development Mechanism 

and is now in a process of developing project of activities. The energy and the carbon team 

contracted by the RDMU in their first assignment have identified several possible projects 

that could enable Swaziland to benefit from carbon credits in the context of the Kyoto 

Protocol and Clean Development Mechanism. However, a few challenges which could limit 

Swaziland’s benefit from the CDM were identified and one biggest challenge is that of 

defining the Swazi grid factor. 

A grid emission factor is defined by the UNFCC as the weighted average amount of CO2 in 

tonnes per MWh emitted from power plants connected physically to the electricity grid 

system. The grid emission factor depends on the type of fuel sources used by the connected 

grid power plants. The UNFCCC defined for each fuel type an emission factor which has to 

be used. Fossil fuel based power plants result to a higher grid emission factor compared to 

renewable based power plants. 

The calculation of a grid factor is required to calculate baseline emissions based on the 

quantity of electricity generated and consumed, and is used to estimate the amount of CERs 

that could be generated by a project activity. 

As already mentioned above, Swaziland imports approximately more than 80% of its 

electricity from neighbouring South Africa and Mozambique. Hence, the grid electricity 

network in Swaziland is connected to South Africa and Mozambique. This poses a great 

challenge in terms of determining a national grid factor for Swaziland. According to the 

methodological tool for calculating emission factor for an electricity system; 

“For imports from connected electricity systems located in another host country/countries, 

the emission factor is 0 tons CO 2 per MWh.”1 

This means even though the electricity used in Swaziland is mainly based on fossil fuels 

(88% of electricity from South Africa is coal based and 4% of electricity from Mozambique is 

1 UNFCCC EB 35 Report Annex 12 - Methodological tool (Version 01.1) “Tool to calculate the emission factor 

for an electricity system” p.4 

2

fossil based), the emissions of these fuels are not attributable to Swaziland. On the other 

hand, the electricity generated in Swaziland is mainly hydro-based, which is a renewable 

source, hence the grid emission factor for Swaziland becomes zero. 

In practice however, the Swazi electricity grid is an integral part of the RSA power grid, or the 

SADC grid respectively. The current version of the methodological tool does not take into 

account this special situation that prohibits co-financing of nearly all renewable energy and 

energy efficiency projects in Swaziland, although the country requires such incentives in 

order to become more energy-independent. 

All CDM project activities in Swaziland aimed to substitute or reduce electricity demand from 

the grid, i.e. if a project activity supplies electricity to the grid (e.g. new biomass power plant) 

or a project activity results in savings of electricity that would have been provided by the grid 

(e.g. demand-side energy efficiency projects) are affected by this. Consequently, this limits 

the opportunity for Swaziland to benefit from the CDM. In case the “Grid Factor Problem” 

cannot be solved the country is left with CDM projects in the LULUCF sector apart from two 

opportunities in the sugar industry aiming at replacing coal. 

Hence, there is a need for the identification of strategic possible solutions to ensure that 

identified CDM project activities meant to supply electricity to the grid or reduce (or replace) 

grid electricity can be viable as CDM projects. 

3 D E S C R I P T I O N O F T H E A S S I G N M E N T 

3 . 1 G l o b a l O b j e c t i v e 

The overall objective of the assignment is to identify a solution for allowing Swazi energy 

efficiency and renewable energy projects dealing with feeding into, or avoiding taking of 

electricity from the grid to obtain CERs under the CDM. 

3 . 2 S p e c i f i c O b j e c t i v e s 

The specific objectives of this consultancy are 

1. To work together with the already established grid factor working group and 

identify different possible alternative options for the definition of the Swazi grid 

factor. 

2. To elaborate precise and workable recommendations for Designated National 

Authority regarding the definition of the Swaziland grid factor. 

3. While taking into account legal aspects regarding the energy-related legislation of 

Swaziland as well as the Kyoto-related framework suggest various options and 

identify the best solution to the “grid problem” that can be implemented as quickly 

as possible. 

3

3 . 3 R e q u e s t e d s e r v i c e s 

For this assignment, the expert is expected to spend 5 working days collecting necessary 

information and providing technical assistance in Swaziland (travel days not included). 

Additional working days are foreseen for preparing the mission to Swaziland, and for drafting 

recommendations to be submitted to the project (RDMU) and to the DNA. 

3 . 4 E x p e c t e d r e s u l t s 

The expected outputs of this assignment are: 

(1) A presentation at the grid factor working group and to major national stakeholders at the 

end of the stay in Swaziland; 

(2) A report in English language comprising the major findings and recommendations. 

4 E X P E R T P R O F I L E 

In order to perform this assignment, the proposed expert should have the following 

qualifications. 

Qualification and Skills 

• Advanced university degree and professional experience relevant to the assignment 

• Expert on international CDM rules and international carbon market; 

• Expert on CDM methodological issues; 

• Fluency in both written and spoken English 

• Good interpersonal relationships 

• Good reporting capabilities. 

4

5 L O C A T I O N A N D D U R A T I O N 

Starting period: The assignment will commence on ………….2009. 

Duration of the assignment: The assignment will take up to ……. working days work-days. 

Location: The assignment will take place in Mbabane, Swaziland and home office. 

Indicative time schedule 


7 

6 D E L I V E R A B L E S 

The expert expected to give a presentation of the preliminary findings before the end of the 

assignment and the expert will provide detailed report with all identified possible alternatives, 

ranked in terms of risks and time associated with each alternative and recommendation of 

the best option. 

7 A D M I N I S T R A T I V E I N F O R M A T I O N 

The experts should be equipped with own laptop computer. Office space will be made 

available by the RDMU. 

The RDMU will provide transport for the period of the assignment. 

5

Service Contract No 2007 / 147-446 EuropeAid/125214 ... - Swaziland

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