BPC financial crisis deepens despite operational gains
Mpho Mokwape | Monday May 18, 2026 06:00
Appearing before a parliamentary committee this week, BPC management told lawmakers that the corporation has made measurable progress under its “Maduo 26” strategy launched in 2021, but said the current electricity tariff structure is no longer financially sustainable as costs continue to rise.
The committee session forms part of Parliament’s oversight responsibilities, with legislators examining the state-owned utility's performance and its ability to fulfil its national mandate.
BPC Chief Executive Officer, David Kgoboko, opened the presentation by outlining that the utility had achieved major operational improvements between 2021 and 2025.
“This report will present an integrated assessment summarising our performance, particularly of the Maduo 26 strategy that started in 2021,” Kgoboko told the committee.
The corporation’s CEO highlighted progress in labour relations, employee safety and operational performance, while also warning that financial pressures are becoming harder to absorb under the current pricing model.
He said labour costs remain relatively low compared to international industry standards, accounting for only 12 percent of the corporation’s cost structure.
“The total labour costs relative to cost structure are about 12%, which is far below the industry benchmark,” he said.
Kgoboko also pointed to what it described as constructive engagement with labour unions during a period of rising pressure on state-owned enterprises across the region.
“BPC recognises the value of maintaining quality relations and constructive relations with our two unions, adding that collective labour agreements had been signed with both unions,” Kgoboko said.
He further reported significant progress in workplace safety, revealing that injuries had declined sharply in recent years and that workplace injuries had improved by 78%, showing substantial progress towards zero harm.
Despite the gains, the tone of the presentation shifted sharply when Kgoboko addressed its financial position.
He told lawmakers that the corporation’s finances remain under structural pressure because electricity tariffs do not fully reflect the actual cost of supplying power.
“In conclusion, Maduo’s strategy has delivered measurable improvements in operational performance, governance and socioeconomic impact, demonstrating the corporation’s ability to execute on its mandate,” he said.
Notwithstanding these gains, Kgoboko said financial sustainability remains structurally constrained under the current policy and tariff framework, particularly in relation to non-cost-reflective tariffs amid rising input costs.
He highlighted that the growing challenge facing BPC is that operational expenses continue to rise while electricity prices remain controlled under government and regulatory frameworks.
Kgoboko explained that State utilities have increasingly struggled to balance affordability for consumers against the high cost of power generation, infrastructure maintenance, and imported electricity.
For Botswana, he said the issue remains especially critical because electricity demand continues to grow while infrastructure investment requirements remain significant.
He further told Parliament that without policy reforms and stronger regulatory coordination, the utility’s ability to continue meeting its strategic objectives could be undermined.
“Addressing this challenge will require deliberate and coordinated policy reform, regulatory alignment and strengthened sector oversight,” he said.
The corporation warned that failure to act could eventually threaten its operational future, adding that in the absence of such interventions, the corporation’s long-term financial viability and ability to sustain its strategic objectives will remain at risk.
The remarks draw fresh attention to the long-running debate over electricity tariffs in Botswana, where concerns about affordability often compete with the financial demands of maintaining a stable power supply.
BPC has historically faced criticism over outages, financial losses and operational inefficiencies, but the corporation’s latest presentation sought to show signs of improvement under its current strategy.
The “Madure 26” programme appears to focus on improving operational efficiency, governance and institutional stability while strengthening labour relations and workplace safety.
However, the corporation’s warning to Parliament signals that internal reforms alone may not be enough to secure its future if electricity pricing structures remain unchanged.
The parliamentary examination session also reflected growing scrutiny over the performance of state-owned enterprises as the government faces pressure to improve service delivery while reducing financial strain on public institutions.
Lawmakers are expected to continue examining BPC’s financial position, operational strategy and long-term sustainability as part of the committee’s oversight process.
The appearance before Parliament comes at a time when energy security remains a major economic issue for Botswana, with reliable electricity supply viewed as essential for mining, business activity and household stability.
According to BPC’s presentation, it ultimately delivered two messages to Parliament: that operational progress has been achieved, and that the corporation believes its current financial model is unsustainable without policy intervention.
While management defended the progress made under the Maduo 26 strategy, its strongest message to Parliament was that rising operational costs and non-cost reflective tariffs could place the utility’s long-term survival under pressure unless reforms are introduced.
The committee is expected to compile findings and recommendations following the examination sessions.