Wednesday, September 30, 2020

Over-reliance on Eskom could halt Botswana’s growth

The African Development Bank will lend Botswana $225m (about P2.2 billion) to finance its own energy project and break its reliance on Eskom.

Electricity supply shortages have hit South Africa and Botswana on a regular basis since 2007 and now it appears that half of the senior management posts at Eskom were not filled during the power-cut crisis last year. A report from Eskom’s Corporate Technical Audit Department shows how Eskom failed to address these ‘critical vacancies’ and how the procurement of coal supplies was affected as a consequence.

To add insult to injury, Eskom has proposed hefty 45 percent tariff hike every year for the next three years, claiming soaring operating expenditure makes a hike imperative. Higher coal costs mean higher energy costs and more expensive power plants apparently need to be used.

The National Energy Regulator of SA (NERSA) is looking into Eskom’s application for tariff increases.

Meanwhile, there have been calls for Eskom’s CEO, Jacob Maroga, to be fired.
As Botswana imported over 65 percent of its energy from Eskom last year, the picture is grim ÔÇô unless Botswana powers up with the Morupule B Power project. Morupule A provided over 20 percent of Botswana’s energy last year.

An over-reliance on Eskom’s energy could ultimately threaten Botswana’s economic growth, particularly if cheap energy on tap becomes a thing of the past. It makes sense for Botswana ÔÇô whose energy demand is currently 500MW ÔÇô to invest in its own energy projects now, particularly as demand is expected to grow at about six percent per annum.

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The Telegraph September 30

Digital edition of The Telegraph, September 30, 2020.