The government has announced plans to phase out electricity subsidies for consumers who can afford cost-reflective tariffs, marking a major step toward building a financially sustainable and inclusive energy sector. The move forms part of the National Energy Compact for Botswana, which sets out a roadmap to achieve universal access to reliable, affordable, and sustainable energy by 2030.
The Energy Compact, endorsed under Mission 300—a continental initiative co-led by the World Bank Group and the African Development Bank—commits Botswana to energy sector reforms that will enable utilities to recover operational costs while shielding the poor through targeted support. Mission 300 aims to connect 300 million Africans to electricity by 2030, with 17 African nations, including Botswana, Benin, Kenya, Namibia, and Ghana, pledging to implement national compacts to reform energy access and financing frameworks.
According to the recently published document titled National Energy Compact for Botswana, the government plans to approve a trajectory for the gradual elimination of electricity subsidies for all consumers able to pay cost-reflective rates by March 2026, coinciding with the end of the Botswana Power Corporation’s (BPC) fiscal year. Only the poor and vulnerable will continue to receive government assistance through a “social tariff” designed to make electricity affordable for low-income households.
The Botswana Energy Regulatory Authority (BERA) will play a central role in implementing these reforms. By December 2025, BERA is expected to complete a Cost of Service Study to determine the actual cost-recovery rate for electricity provision. A multi-year tariff regime will follow by December 2026, ensuring that utilities such as BPC achieve full operational cost recovery.
During the transition period, the government will cover tariff shortfalls to maintain financial stability within the utility sector until cost-reflective tariffs are fully implemented by June 2026.
The Energy Compact also outlines measures to modernize infrastructure and strengthen institutional frameworks within the energy sector. These include digital upgrades of BPC’s network control and customer service systems—such as the Supervisory Control and Data Acquisition (SCADA), Mini-Distribution Control Centers (MDCC), and Meter Data Management System (MDMS)—by 2027. It also calls for revenue protection initiatives to improve billing efficiency and reduce energy losses, the development of a Smart Grid Roadmap and pilot projects for smart mini-grids by December 2026, and capacity building for BERA and the Ministry of Minerals and Energy (MME) to enhance oversight and investment readiness by 2027.
The reform plan also emphasizes mobilizing private sector financing. The MME will explore green bonds, partial risk guarantees, and blended finance models to attract private investment while mitigating risks through credit enhancement mechanisms.
By joining Mission 300, Botswana aligns itself with a growing coalition of African governments pursuing practical reforms to end energy poverty. The initiative is expected to not only expand electricity access but also boost economic competitiveness and create jobs across the renewable energy value chain.
Seventeen African governments—Benin, Botswana, Burundi, Cameroon, Comoros, Congo, Ethiopia, Gambia, Ghana, Guinea, Kenya, Lesotho, Mozambique, Namibia, São Tomé and Príncipe, Sierra Leone, and Togo—have endorsed National Energy Compacts under Mission 300. The initiative was launched during the Bloomberg Philanthropies Global Forum in September, where the compacts were described as “practical blueprints” for accelerating energy access, guiding public spending, driving regulatory reforms, and leveraging private capital toward achieving Sustainable Development Goal 7 on affordable and clean energy.
