COUNTRY OVERVIEW Botswana is a landlocked country located in central–southern Africa, with a mean altitude above sea level of 1 000 metres and a total area of 582 000 square kilometres (km2 ). The official languages are English and Setswana, which are widely spoken in the country, and the pula (BWP) is the nation’s official currency. The country is divided into nine districts and five town councils. Botswana’s climate is arid to semi-arid and rainfall is highly erratic. Botswana has not been spared by climate change and continues to incur considerable environmental and economic costs in addressing the challenges of negative climatic impacts. Severe rainfall deficiencies occur periodically, and most parts of the country are affected by droughts. Since the early 1980s, extreme weather events – including droughts, storms and floods – have increased in frequency. In terms of greenhouse gas (GHG) emissions, the World Bank’s latest data indicate that Botswana’s emissions per capita stand at 3.367 metric tonnes of carbon dioxide (CO2 ) per year – its highest rate ever recorded. This emissions value is about half of the average figure (6.154 tCO2 ) for upper middle-income countries in 2014 (World Bank, 2019 b). When it gained political independence in 1966, Botswana was one of the world’s poorest countries. However, it swiftly became one of the world’s development success stories. Mineral wealth, fiscal discipline, uninterrupted civilian leadership, prudent economic management, progressive social policies, peace and tranquillity and a comparatively small population of a little more than two million, have helped to position Botswana as an upper middle-income country (Statistics Botswana, 2014). The economy is dominated by extractive industries – predominantly diamond mining; nonetheless, tourism is an expanding sector due to the country’s nature preservation practices and large game reserves. Diamond mining has been an important source of wealth and development and accounted for 20% of Gross Domestic Product (GDP) in 2017. Other key sectors are wholesale and retail trade; finance, real estate and business services; and agriculture, accounting for 21.6%, 15.3% and 2.2% of GDP, respectively, in 2018. The water and electricity sector accounts for 0.8% of GDP (AfDB, 2018). Although total energy consumption increased by 86% between 1994 and 2013, this was
accompanied by an almost three-fold increase in GDP (at constant prices, see Figure 1).
The Government of Botswana has adopted an Economic Stimulus Programme (ESP) in order to boost economic growth, promote economic diversification and job creation. Launched in 2015, the ESP aims to expand the economy through a development agenda that includes energy (Government of Botswana, 2015 a). Specifically, the ESP seeks to accelerate the electrification of urban and rural areas, and intends for the country to become an energy surplus nation. Moreover, after a decade of efforts to diversify the economy the share of mining sector in the GDP has decreased from 25% to 20% (Ministry of Finance, 2018). Yet, despite a reduction in GDP share, diamonds alone are accounted for 90% of exports (BoB, 2019). With respect to human development, the United Nations Development Programme (UNDP) reported a Human Development Index (HDI) score of 0.735 for Botswana in 2020, placing the country in the high human development category and positioning it at 100 out of 189. Between 1990 and 2020, Botswana’s HDI has registered a 26% increase, rising from 0.581 to 0.735 (UNDP, 2020).
Regional energy context The southern Africa region1 presents great disparities in terms of economic development – both between countries and over time (Figure 3). For instance, South Africa’s per capita GDP in 2019 was USD 13 034 compared to Lesotho’s USD 2 824. Despite these great inequalities, the regional trend is towards economic growth, with an average annual GDP growth rate of 4.31% between 2007 and 2018 as depicted in Figure 3 below. Yearly per capita electricity consumption is also very uneven in the region (Figure 4). For example, per capita consumption for South Africa in 2018 stood at 4 002 kWh/cap., compared to the Seychelles (4 434 kWh/cap.), Mauritius (2 475 kWh/cap.) and Botswana (1 554 kWh/cap.), all of which demonstrate an electricity consumption 20 to 30 times higher than Comoros, Madagascar, Malawi, the Democratic Republic of Congo or the United Republic of Tanzania, which range between 60 and 150 kWh per capita.
The lowest rates of access to electricity are found in Malawi, where just 18% of the population has access to electricity (leaving 15.7 million people without access) and the Democratic Republic of Congo with 19% access (where 67.7 million people lack access). Nine out of the sixteen Southern African Development Community (SADC) countries have access rates lower than 50% (e.g., up to 37.1 million people lack access to electricity in the United Republic of Tanzania [Figure 5]). Mauritius, Seychelles, Eswatini, South Africa and Comoros have the highest rates of access to electricity in the region. On average, almost 50% of the population does not have access to electricity across the SADC as a whole,
which corresponds to a total of 210 million persons (World Bank, 2019 a). As highlighted by SADC (2018), the region began to witness a structural energy deficit in 2007 Pressured by strong economic growth, the region faced power outages and rolling blackouts across the SADC Member States. The supply gap was estimated at 8 GW in 2014, due to insufficient generation capacity, and high transmission and distributions losses estimated at 19% in 2015 (SADC, 2019).
According to the latest available data presented by the World Bank data portal, the increase in energy consumption has been accompanied by an increase in GDP. Over nearly two decades, GDP almost tripled (in current international PPP, from USD 14.4 billion in 2000 to USD 42.7 billion in 2018) and TFEC increased by 45%, from 1 408 toe in 2000 to 2 050 toe in 2018 The GDP created by a unit of energy (in PPP, million per toe of TFEC) increased from 10.22 to 20.8 over the same the period. The World Bank (2017) plea, in its detailed examination of the causes of reduced energy intensity in the economy, notes that a large portion of this is attributable to increased economic output and only a marginal amount to energy efficiency improvements.
Grid infrastructure In the context of reducing energy dependence on neighbouring countries and enhancing the reliability of the national power system, BPC is pursuing a number of grid improvement projects, such as the North-West Transmission Grid Connection (NWTGC) and Rakola Grid Extension projects. The NWTGC aims to extend the transmission grid to the North-West, Chobe and Ghanzi districts to meet the demand from upcoming mining operations and the Zambezi Integrated Agro-Commercial Development (ZIACD) project (BPC, 2017a). The project began in January 2019 and was scheduled for completion in December of 2020; however, due to COVID-19 constraints it was completed and officially launched by the President of the Republic of Botswana in April 2021. The construction of the Rakola substation, a new 220 kV bulk supply point, was completed and commissioned in 2017 (BPC, 2017 a; BPC, 2018 a). According to BPC’s annual report, power losses were estimated at 15.3% in 2018.
Costs and tariffs
BPC has been in a precarious financial state for many years due to high import costs, operational difficulties and inoperative assets, and has been kept afloat by government subsidies. The cash flow difficulties experienced by BPC were reflected by its net margin ratio of -5.1% in 2017. In 2018, for the first time since 2009, BPC posted an operating profit in excess of USD 27.4 million, before receiving a government grant of USD 133.4 million. As reported by BPC (BPC, 2017a), the Government of Botswana has committed to provide fiscal support to the Corporation to: achieve cost-reflective tariffs; subsidise operations (through a medium-term plan of tariff subsidies to compensate for the unrealistic cost of electricity to consumers and operational subsidies to meet loan obligations and other operating costs); and provide an equity injection for infrastructure development.
Renewable Energy Strategy for Botswana
In 2017, the World Bank supported the development of Botswana’s Renewable Energy Strategy.11 The strategy is based on a least-cost analysis (MMEWR, 2017c), which follows the high-level resource assessment (MMEWR, 2016a) described in previous sections. The least-cost analysis considers seven potential wind sites of 50 MW capacity each, and six representative sites for solar energy of 25 MW for solar PV and 100 MW for solar CSP (Figures 17 and 18). A visual inspection of the data shows the sites proposed by the World Bank study overlap with the IRENA study, although some large clusters are outside the zones identified by the IRENA study. However, there is limited correlation with the solar sites selected by BPC in their renewable energy strategy (BPC, 2018b).
In 2017, based on the MMEWR study (MMEWR, 2017c) and a high-level resource assessment (MMEWR, 2016a) supported by the World Bank, the Ministry of Minerals, Energy and Water Resources published the Renewable Energy Strategy for Botswana. The Renewable Energy Roadmap, a document accompanying the Strategy (MMEWR, 2017a) foresees the development of large-scale grid-connected renewable energy that may meet 20% of total electricity consumption by 2030. The final roadmap recommends the addition of 300 MW of CSP and 350 MW of PV by end-2030. The study emphasises reducing imports, and the least-cost analysis therefore favours baseload capacity, such as coal and CSP; this aspect may explain the strategy recommendation to deploy 100 MW CSP as a priority. The various zoning studies and least cost analysis results showed that more ambitious renewable energy scenarios could be adopted, provided constraints on the management of the system could be relaxed, including efficient import/export strategies to and from the SAPP. In this case, the drivers for energy policy would not only be energy independence, but also internalised socio-economic benefits and increased diversification of the national economy.
ENABLING FRAMEWORKS FOR RENEWABLE ENERGY DEPLOYMENT
Policy and regulatory frameworks The Botswana Energy Master Plan (MMEWR, 2004) presents the country’s socio-economic and environmental goals and highlights the nexus between energy and the achievement of these goals. It also details existing achievements and outstanding goals since its last review in 1996. The following renewable energy-based rural electrification goals are outlined by the Botswana Energy Master Plan:
- Promote solar energy (government);
- Grid and non-grid technology integration;
- Encourage renewable energy-related R&D;
- Develop an institutional framework to support renewable-based rural electrification;
- Define strategies to remove barriers to renewable energy uptake; and
- Use PV power generation – mainly for lighting – to promote child and female welfare. The Botswana Biomass Energy Strategy (MMEWR, 2009) seeks to address the needs of biomass energy end-users and associated problems encountered in Botswana, focussing on domestic, industrial and institutional thermal applications of biomass, such as cooking and heating.
The outcomes of the IRP Plan include a projection of generation capacity up to 2040. The plan does not appear to take into account the actual delivery capabilities of Moropule A and B. The BPC projections (BPC, 2020) foresee Morupule reaching full capacity only in 2023, instead of 2017 in the current IRP.
KEY CHALLENGES AND RECOMMENDATIONS This section aims to dive into the challenges faced by Botswana in increasing its uptake of renewable energy and provides recommendations on actions to be implemented in the short-to-medium term, covering institutional and policy frameworks, regulation, risk mitigation as well as the human capacities and skills necessary to develop current renewable energy technologies. These key issues and recommendations are based on an initial analysis that follows the drafting of a background paper. They also arose from the exchange of information held at the initial meeting on the RRA process, the validation workshop, and from various bilateral meetings with key local stakeholders.
EXECUTIVE SUMMARY Botswana is an arid to semi-arid country of 582,000 square kilometres located in Southern Africa. It is a landlocked developing and upper-middleincome country with a population of 2.3 million inhabitants, of which 30% live in rural areas. Access to electricity stands at 65% (81% in urban areas and 28% in rural areas). The country’s total energy supply of 2.9 Mtoe in 2017 consists of oil products (35%), coal (44%), (traditional) biofuels and waste (19%) and imported electricity (2%). Electricity is mainly produced from coal, or from petroleum products imported mainly from South Africa. Botswana’s gross domestic product (GDP) has almost tripled since 2000, whilst its total final energy consumption (TFEC) has increased by 45%. Botswana is gradually recovering from an economic downturn in 2015, during which the country suffered from a negative growth owing to a decline in diamond exports, severe drought and energy shortages. Subsequently, the Government of Botswana adopted an Economic Stimulus Programme in order to boost growth and promote both economic diversification and job creation. The recovery has been supported by the development of non-mining sectors such as communications, trade, transport and tourism. Although diamond mining remains the primary source of wealth and development, in recent years the tourism sector has expanded thanks to the country’s wildlife preservation practices and large game refuges (prior to the onset of the COVID-19 pandemic in 2020).