Energy sector opens opportunities

GABORONE - A World Bank Group report has confirmed opportunities for increased private sector participation in Botswana’s energy sector, particularly in renewable energy generation and standalone solar.

The July 2022 report, presented recently to the Minister of Finance Ms Peggy Serame further instigates
aspirational opportunities in transmission and distribution.

It also shows that the private sector can play a vital role in financing, building and operating power transmission lines, as global experiences attest.

Speaking in an interview, a senior private sector specialist at the World Bank, Mr Michael Ehst said expanding and upgrading transmission networks often involved a significant capital investment, which electricity utilities had limited public finance to fulfil efficiently on their own.

He said private investment was therefore critical to delivering cost-effective power to households and industries, citing that Botswana’s transmission sector was not currently open to private sector engagement.

Notably, he said unlike in the generation sub-sector where the government had announced that all planned projects would be implemented through the private sector, planned transmission projects were fully government funded and implemented through Botswana Power Corporation (BPC) with no possibility for private investment.

Mr Ehst said planned transmission projects such as the Molepolole to Thamaga 132 kilo-volt (Kv) transmission line presented an opportunity for the government to leverage private financing and implementation.

In addition, Mr Ehst said government would in future consider ways of attracting private investment in the
country’s transmission infrastructure, including setting the appropriate legal and regulatory frameworks.

Moreover, he said the government should devise policies that supported prospective technological studies, potentially on the build, own, operate and transfer (BOOT) model, considering outcomes of the transmission line study.

He said currently there was inadequate regulatory capacity in terms of the level of skills and number of personnel in key functional areas.

“BERA is understaffed, with only 41 of 91 planned positions filled. This delays the development of regulatory instruments to facilitate investment in energy infrastructure,” he said.

He said while Botswana Energy Regulatory Authority (BERA) was the final decision maker in licensing, it was not on tariffs, noting that international experience showed that licensing, tariff determination and conflict resolution should be handled solely by the regulator without interference from other government bodies.

Meanwhile, Mr Ehst urged government to fast-track the completion of instruments so as to facilitate investment in energy infrastructure development, which should include Independent Power Producers (IPP) licensing, procurement guidelines and processes.

He said there should be a developed network connection policy and a national transmission grid code to govern the development, operation, maintenance and use of the national transmission network alongside regulatory mechanisms for ancillary service pricing.

“Government should develop and implement quality of service regulations to guide toward a more reliable and efficient network.

“Review the structure of the electricity sector, with consideration for private sector participation in the transmission sub-sector and implementation of off-grid solutions,” he said.

Further, Mr Ehst said the government should enhance Projects Energy Development Unit (PEDU) through
institutional, technical and legal capacity building for the delivery of large electricity infrastructure. BOPA