Gov’t Turns Pockets Inside Out

• Clears P600m crippling debt owed to Eskom • Settled P2bn bond earlier • Burdened by maturing tbills running into billions At a time when government coffers are strained by falling diamond revenues, Botswana has paid off a P600 million debt to South Africa’s Eskom in a move to keep the country’s lights on.

The final payment, made through the Botswana Power Corporation (BPC), was revealed this week and clears arrears that had threatened the nation's already fragile power supply.

Permanent Secretary in the Ministry of Minerals Pelaelo Khowe confirmed the settlement during the ministry’s appearance before the Public Accounts Committee on Monday. He said BPC no longer owes Eskom, following a new power supply agreement between the two entities.

Debt repayments have become a growing burden for the government. The Eskom settlement highlights the country’s financial strain, coming shortly after a P2 billion payout to domestic bondholders in M arch . Government is also juggling billions more in maturing treasury bills.

Meanwhile, Botswana has entered a new supply deal with Eskom under which the South African utility will provide 300 megawatts of electricity at preferential or emergency tariffs.

“The recent power outages encountered throughout the country were due to operational challenges at the Morupule B power plant. Eskom also had supply challenges, and since we owed them, it was difficult for them to supply us until we dealt with the debt. We owe them nothing today,” said Khowe .

As power shortages threatened to spiral into an economic crisis, Minerals and Energy Minister Bogolo Kenewendo engaged South African officials to resolve the Eskom debt.

Kenewendo is seeking a stable agreement for 200 MW at more favorable tariffs to supplement the improving output from Morupule B, as well as diesel and solar generation.

She told Parliament that BPC now requires over P400 million each month for power imports, after Eskom raised tariffs from 80 thebe to P2.26, and later to P5.55 per kilowatt hour.

Morupule B still has power issues

Khowe said the Morupule B power plant is undergoing remediation and is expected to be fully operational by late 2027. The timeline has raised concerns about maintaining a stable supply to complement Eskom imports.

He acknowledged that the plant has failed to meet expectations since its commissioning in 2012.

“As the government, we acknowledge with serious concern the operational challenges faced by Morupule B,” he said.

“The remediation has been ongoing since 2019, and the cost of maintenance is being borne by the engineering company contracted to build the plant, not by government or BPC.”

Due to recurring issues at Morupule B, BPC has incurred electricity import costs amounting to billions of pula, severely impacting its budget.

To bridge the supply gap, Khowe said BPC is turning to alternatives, including the 600 MW Mmamabula coal plant under construction by Jindal Africa. The facility is expected to be commercialized in 2027.

The Mmamabula Energy Project is a public-private partnership between Jindal Africa and the government of Botswana, represented by BPC. Under the agreement, Jindal will construct, own and operate a 300 MW coal-fired power station at Mmamabula through a long-term power purchase agreement with BPC.