Wednesday, October 21, 2020

Botswana Power Corporation is on a slippery ground

By selling what it does not produce, BPC is effectively not anchored on the ground.

To get it back to safety it will take large sums of money pumped into it as part of re-capitalisation.

A business model might have to be changed – including possible unbundling the cu7rrenty structure into independent and standalone like generation, transmission and distribution and also retail and marketing.

BPC cannot be expected to rescue itself and also secure the country’s energy requirements.

At the moment Botswana Power Corporation is fighting for survival.

While is authority has been growing, its viability has been diminishing.

Years of mismanagement and corruption are largely to blame.

A tragicomedy that became efforts to become self-sufficient with the construction of multi-billion pula plant has seen the country set back probably many years.

Government decision to reduce its subvention to BPC has played its role.

And now a consumer is being asked to carry back to safety a BPC that is on its knees and that has no substantive leader to at least help steer out of the morass it is in.

We often hear about the big problems engulfing a BPC counterpart in South Africa.

Apparently Eskom is in so much big trouble that neither the SA government nor the international creditors are able to help.

They can only touch it with a long barge and from a distance.

BPC should be held to a higher standard.

Early this year government announced that BPC tariffs were going up by 22 percent.

It was such a drastic move that to this day many citizens are still trying to come to terms with. It was a way of government finally weaning off BPC and thrusting it into the bosom of a consumer.

No tariff increase was ever going to be welcomed.

But this was way too steep to be implemented at once even for people who had argued that energy prices in Botswana were heavily subsidized by Government.

That would be a good decision if the BPC consumer was not already hard-pressed.

Already BPC has gone back to the regulator to plead itself for further tariff increases.

The Corporation is basically saying without such increases it would wind up.

BPC has no choice but to also demonstrate through its policies that it is aware to the concerns of global warming.

Coal is increasingly getting strategically unattractive.

Doubling down on coal in the face of such a crisis is hardly the best business move to be expected of a corporation operating in such a public space.

BPC will not recover unless it is able to win back both goodwill and public confidence.

This calls for a more robust executive team.

Then BPC will be required to state clearly how it plans to deepen Botswana’s energy security.

Importing such high quantities from South Africa is dangerous.

It puts the economy of the country in peril’s way.

It cannot be right to rely so much on a country that is not able to satisfy its own energy needs.

It is not a secret that under the current agreement Botswana enjoys preferential treatment from Eskom as a supplier.

That is so because Botswana is able to pay, especially in dollars over and above the market price.

This alone provides an existential threat for Botswana. The agreement is only useful up to a point, beyond which, like all agreements it might become less of the worth the paper it is written on.

There is absolutely no reason why Botswana has lagged so far behind when it comes to investing in green energy.

For us here green energy remains a topic for discussion.

As a country we have to move fast towards achieving the right mix.

BPC has to lead the way in a change of national mindset.

For Botswana that is not only good for climate, but also for energy security.

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