AfDB loan to aids investment in renewable energy

This publication previously reported that BERA was exploring funding options in the form of grants from other financiers such as the African Development Bank to fund its strategic projects. Initially the loan was pegged at USD1.7 million US maximum (about P19.8 million) for a Renewable Energy IPP (Independent Power Producer) procurement programme.

But in an updated statement, the continental bank has revealed that the Sustainable Energy Fund for Africa (SEFA), which is managed by the same bank, had approved a $1 million grant to facilitate Botswana’s transition to clean energy.

SEFA is a Multi-Donor Special Fund that aims to unlock private sector investments that contribute to providing universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the bank’s New Deal on Energy for Africa strategy and Sustainable Development Goals.

According to AfDB, the technical assistance project supports the Government of Botswana in closing critical gaps in policy, regulatory and legal frameworks which were identified at the Africa Energy Market Place (AEMP 2019). These include the introduction of least-cost planning, reduction of adverse environmental impacts and support for increased private sector participation in renewable energy (RE) generation investments.

Some of the notable outputs from the project include a national Grid Code, Electricity Cost of Service Study (CoSS) and licensing framework to regulate power sector activities. The outputs from the project will contribute towards the implementation of Botswana’s first Integrated Resource Plan (IRP), thus facilitating investments in new solar PV and wind generation capacity, amounting to at least 100MW and 50MW, respectively, by 2030.

Through its support for the further development of the renewable energy generation sector in Botswana, the project also contributes to  the Mega Solar initiative, launched in 2021 in collaboration with Namibia and development partners, with the aim of building renewable energy capacity in the two countries to enable electricity exports to the rest of the region.

Conceptualised under SEFA’s Green Baseload component, the project “will contribute to the development of essential building blocks to support Botswana’s energy transition”, said Dr. Daniel Schroth, Acting Director for Renewable Energy and Energy Efficiency at the African Development Bank. “It has been a long journey to access this AfDB grant facility,” observed Duncan Morotsi, Chief Operating Officer at Botswana Energy Regulatory Authority (BERA), “The approval is a great step forward in the regulator’s quest to facilitate independent power producers (IPPs), renewable energy sources and cost reflective tariffs in Botswana.  It was worthwhile pursuing this technical assistance from the AfDB.”

According to a copy of a presentation by one G Raditholo at the Africa Energy Market Place (AEMP 2019), BERA was expected to engage with AfDB and other development partners to elaborate the findings and recommendations of the Electricity Regulatory Index (ERI) in respect of Botswana, including Harmonization of Laws and Acts in the Electricity Sector of Botswana, development of grid code, tariff methodology and licensing framework and solicit their support for implementation through appropriate technical assistance instruments.

The presentation states that rural electrification, along with safe and affordable access to energy, is a key priority for Botswana to support economic growth. Diversification and decentralisation of the country’s energy mix through renewables integration are important aspects in achieving these priorities. Investments in energy efficiency projects will also be a priority and will help reduce carbon emission.

The document says the country has several electricity generation projects in the pipeline, including the mostly unexplored potential of solar generation.  In November2018, Raditholo said BPC issued a Request for Proposals relating to Botswana generating enough internally to supply all of its domestic needs.