BPC’s P2.5bn bailout raises questions ahead of tariff decision
Lewanika Timothy | Monday March 16, 2026 10:03
The proposed tariff adjustment has already drawn strong opposition from the industry, as manufacturers and exporters warn that the increase could severely undermine the country’s fragile industrial base.
Late last year, BPC lodged a tariff application with BERA seeking an average 46% increase in electricity prices from April 2026. Under the proposal, domestic consumers would face the steepest adjustment at 68%, whilst government users would see tariffs rise by 41%. Commercial users and mining companies would each face increases of about 40%, producing a weighted average adjustment of 46% across all consumer categories.
The proposal has attracted growing resistance from both households and businesses at a time when incomes remain under pressure from a weak economy and rising living costs.
Industry lobby forums such as the Botswana Exporters and Manufacturers Association (BEMA) last week formally objected to the proposal, warning that such a sharp tariff increase would raise production costs and erode the competitiveness of Botswana’s manufacturing sector.
The association cautioned that the proposed hike could derail efforts to expand local production and boost exports.
The industry body argued that electricity is one of the largest input costs for manufacturers, and any sharp rise in tariffs would inevitably filter through to the prices of locally produced goods, weakening the sector’s ability to compete with imports.
The objections come as government disclosed that it had already stepped in to financially support the power utility during the current financial year.
Addressing Parliament during the Committee of Supply, Minister of Minerals and Energy Bogolo Kenewendo revealed that government disbursed P2.5 billion to the utility in the 2025–2026 financial year to sustain the utility’s operations.
“Electricity tariffs in Botswana remain below the cost of supply, placing a significant financial burden on the Botswana Power Corporation and government,” Kenewendo said.
“In the 2025–2026 financial year alone, government disbursed approximately P2.5 billion to support BPC, a level of fiscal support that is not sustainable in the long term,” she added.
Kenewendo said the country’s electricity pricing model has increasingly come under pressure as the cost of generating and importing electricity continues to rise.
Botswana currently consumes about 4,800 gigawatt hours of electricity annually, with peak demand reaching roughly 700 megawatts. However, domestic generation capacity remains limited, forcing the country to rely heavily on imports to maintain grid stability.
According to Kenewendo, the country’s two coal-fired stations produce an average of about 400 megawatts of electricity, leaving a significant supply gap that must be filled through imports from the regional market.
Electricity imports now account for approximately 35% of Botswana’s national power supply, exposing the country to rising regional electricity prices.
“The average cost of imported electricity has increased significantly over recent years,” Kenewendo said.
Despite these rising costs, the country’s average electricity tariff remains around 148 thebe per kilowatt hour, well below the cost of supply.
The gap between tariffs and the actual cost of electricity has forced government to repeatedly intervene to stabilise the power utility’s finances.