Botswana on ambitious power plan
Gaborone ‑ Botswana is seeking an international company to assist in strengthening the capacity of state power utility, Botswana Power Corporation (BPC).
This is part of the country’s efforts to become an exporter and not an importer of power.
The Minister of Minerals, Energy and Water Resources, Kitso Mokaila, said that following consultation with BPC board, they identified the need to engage a reputable international firm to manage the power utility on a two- to three-year management contract.
He said the board is in discussion with the Electricity Supply Board International (Pty) Ltd. Mokaila was quoted as saying that “BPC has always been a retailer of power, taking power from South Africa and they are now the distributors of power and we want to sell power.”
“There are other independent power producers. The question is whether we are in a position to compete with them. Because we will be exporting power, we need the capacity when we transform from a retailer to distributor,” he said. He said this was critical, as the parastatal's scope of operations is expanding from just being a retailer to a power generator and distributor.
“We have to reinvent and redirect BPC so that it becomes relevant to the environment it is operating in.
“The Independent Power Producers (IPP) are also coming on board and BPC will need to have the capacity to manage the Power Purchase Agreements (PPA).
“At the end, we want to see BPC running profitably and being weaned off government subsidies. Our intention is not to fire workers,” he said.
BPC board chairperson, Ewetse Rakhudu, also noted that overtime, BPC operations have not grown substantially but have also become complex and sophisticated, necessitating a comprehensive review of its structure and function, to ensure that relevance and effectiveness.
“A very good example is the BPC changing role from primarily distributing imported power to now becoming a major generator and transmitter,” she said.
But research firm Frost & Sullivan mining, manufacturing and industrial automation programme manager, James Fungai Maposa, has suggested that given Botswana’s vast coal reserves, which were estimated at 200 billion tonnes, the country’s coal mining industry should seek to encourage investment and drive expansion in power generation, rather than ramping up its thermal coal exports over the next few years.
“The added power capacity can be exported to markets such as Zimbabwe, Namibia, Zambia, Mozambique and South Africa, over the medium- to long-term.
“Investment into expanding Botswana’s power generation sector will come as a welcome relief to the Southern African region where economic growth and quality of life has been hindered by the current power supply shortages,” Maposa suggested.
He added that Botswana should consider securing investment to increase its in-country demand for its extracted coal, as opposed to targeting the export market.
“Botswana’s coal miners can also enter into strategic partnerships with Sasol, which could result in the economy further beneficiating the extracted coal.
“Further to this, Botswana’s Mmamabula coal reserves are in close proximity to Sasol’s proposed Mafutha project, in Limpopo,” Maposa suggested, while adding that the country’s extracted coal could be transported to Limpopo at a comparably lower cost than transporting the coal to Walvis Bay, in Namibia, for the export market.
Maposa noted that, as the Southern African region was expected to increase its electricity demand over the next 20 to 30 years, expanding Botswana’s energy sector could prove a far more lucrative opportunity for the country than growing its coal exports.
According to Reuters news agency, Botswana also plans to invite initial bids for the construction of a US$11 billion railway line connecting its biggest coal-mining region to a port in neighbouring Namibia. Botswana may list tenders by September to build a 1 500-kilometre rail line from its coal fields in the east to Walvis Bay in Namibia, Botswana Chamber of Mines Chief Executive Officer Charles Siwawa said.
The country is considering building a US$4 billion coal port at Walvis Bay. Reports indicate that demand from China, India and Japan for coal from Africa is fuelling development of mines outside of South Africa and construction of rail lines and ports necessary to ship the fuel to buyers.
“Despite large reserves of thermal coal, Botswana doesn’t feature in the radar of importing nations,” Siwawa said. “We are opening up in a big way and in three to four years, I am hopeful there will be a shift.”