World Bank injects P1.5billion into water projects
Business
The Ministry of Land Management, and Water & Sanitation Services has announced another remarkable water project – a loan facility from the World Bank Group to finance various water projects around the country.
The Botswana Emergency Water Security and Efficiency (BEWSE) project was officially launched this Tuesday by Minister Prince Maele at the Masa Square Hotel. When explaining the genesis of the project, Maele said that water was a driver of socio-economic developments anywhere in the world. “Its role in our livelihoods cannot be overemphasized because it provides for the basis of life, good health, hygiene, agriculture and physical infrastructure development,” he said.
Maele observed that the demand for water is growing; studies indicate that the global fresh water resources have, in recent years, been greatly affected by the effects of climate change, particularly in quantity and quality. Water supply systems and conservation strategies continue to experience a series of operational and structural problems, which has led to increasing challenges in coping with the increasing demands in water supply and sanitation services.
Botswana has not been spared from these global trends considering the fact that the latter is a naturally a dry country, relying on extremely limited sources of water, the Minister said. It is the response to these developments that has birthed the Botswana Emergency Water Security Project. In the recent years, 2014-2016 the country experienced serious water shortage which prompted the Government to seek external assistance to bring the situation under control.
“We approached the World Bank for a loan facility of One Hundred and Forty Five Point Five (US$145.5) million United States Dollars. The loan was approved by Parliament of Botswana during the winter session of 2017, specifically secured to address the emergency water security and efficiency,” he explained. The Minister reiterated that the loan will assist Botswana’s efforts to integrate and manage both surface and ground water resources.
It is estimated that the funds will enable Water Utilities Corporation (WUC) who are the technical implementers to conjure water supply systems which will benefit at least 460,000 people in 66 selected villages and towns while at the same time connecting at least 177,000 people to improved wastewater treatment and sludge management systems.
Thato Raphaka, Permanent Secretary in the Ministry of Land Management, Water and Sanitation Services highlighted that the projects will be divided in three components – the first one being the improvement and availability of Water supply and efficiency of services. This first phase will need about P1.141 billion. Raphaka explained that the second component will be to improve wastewater and sludge management systems. This segment will cost around P216.5 million and will include projects such as the Letlhakane and Lobatse waste water treatment plants.
Another P207 million will be spent on Water Sector Reform and Institutional strengthening of which the permanent secretary said will entail case studies, reviews and development of new national water development strategies to ensure water security going forward. Raphaka said to ensure efficient and effective implementation of the project a Coordination Unit has been established comprising of all stakeholders as well as the monitoring & evaluation task team chaired by the Permanent Secretary’s office.
Representing the World Bank Group was Paul Um, SADC regional director who applauded Botswana’s commitment to ensuring that its people receive the basic need that is water. He said Botswana was heavily reliant on groundwater to service many communities. According to Paul the underlying challenges remain and will continue to threaten Botswana for many years to come.
“The World Bank is pleased to partner with the Government to address these priorities through this project worth $145.5 million to improve the availability of water supply in areas of Botswana vulnerable to drought, support the efficiency of the Water Utility Corporation, and strengthen waste water management systems,” he said. The World Bank representative said the project aims to benefit more than 550,000 beneficiaries (both men and women), contribute to jobs, as well as support longer-term sector reform and institutional strengthening.
“Planned activities are aligned to Botswana‘s National Development Plan as well as contributing to the overall World Bank strategy for Botswana agreed with the Government in 2015 as part of the NDP 11 planning process. Our strategy includes a pillar on ‘Improving Human and Physical Assets’ with an objective around ‘improving the efficiency and sustainability of water supply and sanitation services’. As such, we have a strong stake in ensuring that this new project is a success,” Paul Um said.
The project will support the Government’s efforts to address climate vulnerability, said Paul Um while emphasizing the importance of ensuring diligent attention to the environmental and social risks facing this project. He said ensuring high-quality attention to environmental and social safeguards is a priority for World Bank projects around the world. He advised that coordination amongst the various team members and across agencies will be essential to ensure that key elements, such as the Resettlement Action Plan, the Dam Safety Action Plan, the Vulnerable Communities Plan, and the Environmental and Social Management Plan receive the necessary attention.
“As we kick start this project, let me emphasize the critical importance of proactively identifying, addressing, and managing environmental and social risks. The Bank looks forward to supporting you in this regard, which is our joint priority,” he said
On his closing remarks, Mr Boniface Mphetlhe representing the Ministry of Finance & Economic Development said to get the return on investment from this loan all stakeholders needed to work together cordially.
He said from where they stand at the national treasury, implementing parties will have to put in place proper monitoring tools and frameworks to ensure no thebe is wasted as taxpayers will end up reimbursing the money borrowed from the Word Bank. The launch was followed by a two-day technical workshop attended by representatives from the Ministry of Land Management, Water and Sanitation Services, the Water Utilities Corporation, and the World Bank.
The purpose of the technical workshop is to ensure that all project stakeholders share a common understanding of the implementation arrangements, requirements, as well as the tools and support available from the World Bank to ensure the project is a success. These include discussions on social and environmental safeguards, financial management requirements, the results framework, as well as World Bank’s new procurement guidelines and framework.
Business
Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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