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Gov’t to import 900MW solar power from Israel

Minister of Energy, Minerals and Water Resources Kitso Mokaila

Botswana that used to be a mesh importer of electricity from neighboring South Africa is confident of turning into a regional powerhouse and net exporter of electricity in the next two and half years.

Botswana was not spared from the power challenges which have been engulfing many countries in the Southern African Development Community (SADC) region and the rest of Africa.

It is against this background that the government is leaving no stone unturned in its spirited bid to become the net exporter of electricity by 2018, Minister of Energy, Minerals and Water Resources Kitso Mokaila has said.

Mokaila made the declaration at a base metals beneficiation forum held in Francistown recently when addressing executives drawn from mining houses responsible for the extraction of base metals such as nickel and copper.

“I am 100percent sure that we will by 2018 be the main exporter of power,” Mokaila assured the mining executives.

Currently, the country through its sole power utility in Botswana Power Corporation (BPC) produces about 470MW at its coal-fired Morupule B Power Plant which is situated at Palapye in the central part of Botswana.

Botswana’s national power demand currently stands at an average of 550MW during summer periods. During winter season, Botswana requires electricity supply of between 610MW and 620MW, according to the minister.

“At the moment, we are importing just between 80MW and 150MW from the neighboring South Africa’s Eskom,” said the minister in a separate interview with WeekendPost on the sidelines of the base metals beneficiation forum.  

Besides power being produced from its coal-fired plant, Botswana is expecting to produce at additional 2000MW in phases between now and 2018, said Mokaila, adding that there is light at the end of the tunnel.

At the beginning of the year until this past winter, Botswana has been experiencing power challenges and experienced some prolonged load shedding.

Mokaila said Botswana is finalizing the awarding of a tender to the preferred bidder to construct two more units at Morupule B plant to generate at least 300MW. Generation of the envisaged 300MW is expected to connect to the national grid towards the end of 2016, he said.   

“We are also going to tap into renewable energy in order to position ourselves as a net exporter of electricity,” said Mokaila. He said Botswana will generate electricity from gas and solar.

Elaborating further on the renewable energy generation, BPC spokesperson Spencer Moreri said the government is not expected to spend much money because there are a number of organizations which have shown interest in partnering with the administration.

Moreri said a total of 118 prospective companies have applied to be considered as partners in the generation of power through renewable sources. Moreri could not discuss the amount of power expected to be generated through solar and gas.

He said the government is also working on a government-to-government agreement between Botswana and Israel. The two countries are expected to work hand in glove towards the production of close to an additional 900MW of electricity through solar system.

Weighing in, the Botswana Chamber of Mines (BCM) chief executive officer Charles Siwawa said Botswana has got a lot of potential to produce a lot of electricity from gas and solar.

Siwawa welcomed the development saying it will go a long way in ensuring that Botswana has got enough power supply to run its mining houses scattered across the breath and length of this landlocked nation.

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Botswana on high red alert as AML joins Covid-19 to plague mankind

21st September 2020

This century is always looking at improving new super high speed technology to make life easier. On the other hand, beckoning as an emerging fierce reversal force to equally match or dominate this life enhancing super new tech, comes swift human adversaries which seem to have come to make living on earth even more difficult.

The recent discovery of a pandemic, Covid-19, which moves at a pace of unimaginable and unpredictable proportions; locking people inside homes and barring human interactions with its dreaded death threat, is currently being felt.

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Finance Committee cautions Gov’t against imprudent raising of debt levels

21st September 2020
Finance Committe Chairman: Thapelo Letsholo

Member of Parliament for Kanye North, Thapelo Letsholo has cautioned Government against excessive borrowing and poorly managed debt levels.

He was speaking in  Parliament on Tuesday delivering  Parliament’s Finance Committee report after assessing a  motion that sought to raise Government Bond program ceiling to P30 billion, a big jump from the initial P15 Billion.

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Gov’t Investment Account drying up fast!  

21st September 2020
Dr Matsheka

Government Investment Account (GIA) which forms part of the Pula fund has been significantly drawn down to finance Botswana’s budget deficits since 2008/09 Global financial crises.

The 2009 global economic recession triggered the collapse of financial markets in the United States, sending waves of shock across world economies, eroding business sentiment, and causing financiers of trade to excise heightened caution and hold onto their cash.

The ripple effects of this economic catastrophe were mostly felt by low to middle income resource based economies, amplifying their vulnerability to external shocks. The diamond industry which forms the gist of Botswana’s economic make up collapsed to zero trade levels across the entire value chain.

The Upstream, where Botswana gathers much of its diamond revenue was adversely impacted by muted demand in the Midstream. The situation was exacerbated by zero appetite of polished goods by jewelry manufacturers and retail outlets due to lowered tail end consumer demand.

This resulted in sharp decline of Government revenue, ballooned budget deficits and suspension of some developmental projects. To finance the deficit and some prioritized national development projects, government had to dip into cash balances, foreign reserves and borrow both externally and locally.

Much of drawing was from Government Investment Account as opposed to drawing from foreign reserve component of the Pula Fund; the latter was spared as a fiscal buffer for the worst rainy days.

Consequently this resulted in significant decline in funds held in the Government Investment Account (GIA). The account serves as Government’s main savings depository and fund for national policy objectives.

However as the world emerged from the 2009 recession government revenue graph picked up to pre recession levels before going down again around 2016/17 owing to challenges in the diamond industry.

Due to a number of budget surpluses from 2012/13 financial year the Government Investment Account started expanding back to P30 billion levels before a series of budget deficits in the National Development Plan 11 pushed it back to decline a decline wave.

When the National Development Plan 11 commenced three (3) financial years ago, government announced that the first half of the NDP would run at budget deficits.

This  as explained by Minister of Finance in 2017 would be occasioned by decline in diamond revenue mainly due to government forfeiting some of its dividend from Debswana to fund mine expansion projects.

Cumulatively since 2017/18 to 2019/20 financial year the budget deficit totaled to over P16 billion, of which was financed by both external and domestic borrowing and drawing down from government cash balances. Drawing down from government cash balances meant significant withdrawals from the Government Investment Account.

The Government Investment Account (GIA) was established in accordance with Section 35 of the Bank of Botswana Act Cap. 55:01. The Account represents Government’s share of the Botswana‘s foreign exchange reserves, its investment and management strategies are aligned to the Bank of Botswana’s foreign exchange reserves management and investment guidelines.

Government Investment Account, comprises of Pula denominated deposits at the Bank of Botswana and held in the Pula Fund, which is the long-term investment tranche of the foreign exchange reserves.

In June 2017 while answering a question from Bogolo Kenewendo, the then Minister of Finance & Economic Development Kenneth Mathambo told parliament that as of June 30, 2017, the total assets in the Pula Fund was P56.818 billion, of which the balance in the GIA was P30.832 billion.

Kenewendo was still a back bench specially elected Member of Parliament before ascending to cabinet post in 2018. Last week Minister of Finance & Economic Development, Dr Thapelo Matsheka, when presenting a motion to raise government local borrowing ceiling from P15 billion to P30 Billion told parliament that as of December 2019 Government Investment Account amounted to P18.3 billion.

Dr Matsheka further told parliament that prior to financial crisis of 2008/9 the account amounted to P30.5 billion (41 % of GDP) in December of 2008 while as at December 2019 it stood at P18.3 billion (only 9 % of GDP) mirroring a total decline by P11 billion in the entire 11 years.

Back in 2017 Parliament was also told that the Government Investment Account may be drawn-down or added to, in line with actuations in the Government’s expenditure and revenue outturns. “This is intended to provide the Government with appropriate funds to execute its functions and responsibilities effectively and efficiently” said Mathambo, then Minister of Finance.

Acknowledging the need to draw down from GIA no more, current Minister of Finance   Dr Matsheka said “It is under this background that it would be advisable to avoid excessive draw down from this account to preserve it as a financial buffer”

He further cautioned “The danger with substantially reduced financial buffers is that when an economic shock occurs or a disaster descends upon us and adversely affects our economy it becomes very difficult for the country to manage such a shock”

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