Botswana - Energy Botswana - Energy
Overview
The Southern African Power Pool faces potential electricity shortages when South Africa’s economy recovers and Botswana has export potential given its central geographic location in the region. The GOB is investing in national and regional grid infrastructure in order to facilitate this. With 212 billion tons of coal, coal-fired plants remain the foundation of the GOB’s energy framework and current peak demand of approximately 550 MW. Two power plants near Palapye, about 200 km north of Gaborone supply the vast majority of the country’s electricity. Morupule B’s current capacity is 600 MW, but it has faced technical challenges and at times has been closed for repairs or operated at partial capacity. In addition the GOB is also rehabilitating the Morupule A power station which will add 132MW of power to the national supply upon completion. Botswana imports power from South African utility Eskom to make up for any production shortfalls.
The country is planning to add renewable energy and natural gas generation sources to its portfolio through independent power producer (IPP) projects. Previous IPP projects have not succeeded due to regulatory framework challenges; however production in Botswana for export by an IPP is permitted by the 2007 Amendment to the Electricity Supply Act. To create a more enabling environment, the GOB recently set up an energy regulator, Botswana Energy Regulatory Authority (BERA), which began operation in September 2017.
Botswana has tremendous potential for solar energy utilization, with an annual Direct Normal Irradiation equivalent of 3,000 kWh/m²/a in most parts of the country with an average insolation on a horizontal surface of 21MJ/M2. In September 2016 the GOB renamed its energy organ the Ministry of Mineral Resources, Green Technology and Energy Security to signal new commitment to introducing renewable energy into its mix. A medium-scale (1.3MW) project was developed outside of Gaborone, but solar applications in Botswana are primarily used for solar water heating and small-scale electricity generation using PV technology, the latter mainly for rural applications.
The energy sector has been allocated a significant amount of the 2019/2020 budget for investment in power generation, transmission and distribution. This will support the government-owned Botswana Power Corporation (BPC) in extending the provision of electricity to rural villages. As of 2016, 76% of villages were connected to the grid and the GOB was on track to connect an additional 4%. In 2017, BPC signed a contract for a P4.6 billion North West Transmission Grid project to connect the North Western villages of the country with electricity. The project, which is to be implemented in 2 phases, began in January 2018 and is expected to be completed in 2020. The GOB plans to provide electricity to the remaining 20% through renewable energy projects, and at the moment BPC is assessing tenders for a 100MW solar power plant and potential off-grid installations.
Power Africa
Launched in 2013, Power Africa is a market-driven, U.S. Government-led public-private partnership to double access to electricity in sub-Saharan Africa. It also serves as a one-stop shop for private sector entities seeking tools and resources to facilitate doing business in Africa’s power sector. In 2016, the Electrify Africa Act unanimously passed both houses of Congress and was signed into law, institutionalizing Power Africa and establishing two goals; to add 20,000 MW of generation capacity and expand electricity access to 50 million people in sub-Saharan Africa by 2020. In bringing together more than 140 of the world’s top companies, development institutions, and financial entities, Power Africa employs a transaction-centered approach to directly address key constraints to project development and investment in the power sector. These interventions aim to de-risk investments and accelerate financial close from facilitating project bankability with financing and risk mitigation, to providing technical and transaction support, to engaging with host-government counterparts. Learn more about the full Power Africa toolbox at www.usaid.gov/powerafrica/toolbox or other opportunities offered by Power Africa at www.usaid.gov/powerafrica.
Power Africa is currently working with the Botswana Power Corporation, Botswana’s Department of Energy, and implementation of the Botswana Electrical Regulatory Authority (BERA).
Sub-Sector Best Prospects
Energy equipment, solar heating systems, solar photovoltaic equipment, and engineering services are the best sub-sector prospects.
Opportunities
The GOB’s newfound openness to IPP and solar projects as well as investment in grid infrastructure provides opportunities to develop energy projects for domestic use and export.
Substantial natural gas reserves (coal bed methane) exist in Central and Northeast Botswana. Once fully developed, the natural gas deposits could generate substantial downstream opportunities for new natural gas intensive equipment and services.
Web Resources
Ministry of Mineral Resources, Green Technology and Energy Security: www.mmewr.gov.bw/about
Botswana Investment & Trade Centre: www.bitc.co.bw
Botswana Power Corporation (BPC): www.bpc.bw
BPC Tenders: www.bpc.bw/tenders.htm
Ministry of Investment, Trade, and Industry: www.gov.bw/en/Ministries--Authorities/Ministries/Ministry-of-Trade-and-Industry-MTI
Department of Customs and Excise: www.finance.gov.bw/customs