Dark times
Mbongeni Mguni | Tuesday April 8, 2025 13:25
Kenewendo is hoping to secure a stable agreement for 200MW at better tariffs, which would add to the improving generation coming out of Morupule B and other diesel and solar production to ease the current crisis by weekend.
Speaking in Parliament on Monday afternoon, Kenewendo revealed that the Botswana Power Corporation (BPC) required more than P400 million each month for imports, after Eskom hiked tariffs from 80 thebe to P2.26 and then to P5.55 last week.
“We have had to significantly import from South Africa and the cost has increased quite significantly from 80 thebe per kilowatt hour to P2.26 and last week, to P5.55,” Kenewendo said. “We hope our engagement with the Minister of Electricity on Thursday to renegotiate a new power purchase agreement, we will achieve reduced rates that will help us manage costs.”
She said the mounting debt to Eskom, estimated to comprise most of the P2.6 billion in debts owed by the BPC, was complicating the procurement of electricity from South Africa.
“The other day when we started load shedding, we tried to purchase power and the chief finance officer (at BPC) said at the price that we are at, if we continue, we won't get our contract with Eskom renewed. “We continue increasing the debt with South Africa and the cost alone yesterday of emergency power was R23 million,” Kenewendo said.
The minister hinted that there was a situation where Botswana would have had to stop importing from Eskom or push for a renegotiation of stable supply and improved prices.
The renewed contract is part of a larger rescue plan for the BPC, Kenewendo said. Other components of the plan include debt restructuring for the corporation, adjustment of tariffs in the short to medium term, unbundling the corporation and using diplomatic engagement for the Morupule B creditors.
Morupule B was built with an Industrial and Commercial Bank of China loan which requires $56 million (about P700m) in repayments every year.
The unbundling refers to a long-held proposals to break the BPC down into separate generation, transmission and commercial units to boost its efficiency and promote private sector investment.
According to Kenewendo, in the short-term, the renewed deal with Eskom will help the efforts to restore stability for the country, with another unit due up at Morupule B this week, which, together with diesel and solar generation, will ease the supply crunch by the weekend.
The medium-term plan remains to fast-track the construction of a new 615MW coal-fired power station and add the 600MW contracted out to Jindal Africa, as baseload generation, by 2027. In addition, government this Friday will float a 1.5GW tender for solar power, adding even more generation to the system.
The remedial work at Morupule B, the country’s main baseload plant, will continue with a view to completion in 2027, although some analysts are pushing for the plant’s disposal to the private sector.