The Botswana Power Corporation (BPC) is poised for major structural changes, according to a document released by the Public Enterprises Evaluation and Privatisation Agency (PEEPA).
The document details a plan to unbundle and corporatise the power generation assets of the state-owned utility, aiming to enhance efficiency, attract investment, and improve service delivery within the country’s energy sector.
The PEEPA document, which invites consultants to assist in the unbundling and corporatisation of BPC, outlines that the unbundling process will involve separating BPC’s power generation activities from its transmission and distribution operations. This separation will enable the creation of independent entities focused solely on power generation, fostering a more competitive and dynamic market environment.
The corporatisation aspect will involve transforming these new entities into corporate structures that can operate with greater autonomy and financial independence. This shift is expected to attract private sector investment, enhance accountability, and drive innovation within the power generation sector.
The decision to unbundle BPC’s power generation assets follows the World Bank’s recent approval of its first lending operation to support renewable energy development in Botswana. The Botswana Renewable Energy Support and Access Accelerator (RESA) Project, approved on July 11, 2024, aims to transform the country’s energy landscape by promoting renewable solutions and expanding electricity access.
This new World Bank project will finance essential grid investments, including Botswana’s first 50MW utility-scale battery energy storage system, to facilitate the seamless integration and management of the initial wave of renewable energy generation into the grid. Additionally, the project will support the Government of Botswana’s ongoing efforts to enhance energy access by financing grid expansion to rural villages and improving electricity services in the Southern districts. The project is funded through an US$88 million loan from the World Bank, along with a US$30 million loan and a US$4 million grant from the Green Climate Fund, mobilised by the Sustainable Renewables Risk Mitigation Initiative (SRMI) under the Energy Sector Management Assistance Program (ESMAP).
The move to unbundle BPC’s power generation assets is part of a broader strategy to reform the energy sector, which is crucial for supporting Botswana’s economic growth and development. PEEPA’s plan aims to achieve several key objectives: enhancing efficiency by creating specialised entities, streamlining operations, and reducing costs for more efficient power generation. Additionally, corporatisation is expected to attract private sector participation, bringing in vital capital and expertise to expand and modernise the power infrastructure. The plan also seeks to improve service delivery by implementing reforms that ensure a more reliable and stable electricity supply to meet the growing demands of both industrial and residential consumers. Establishing independent entities will be supported by stronger regulatory frameworks to promote transparency and accountability within the sector.
