Tuesday, October 20, 2020

Power problems in SADC shows regional integration still lacking

This coming Tuesday, ministers responsible for energy from the Southern African Development Community (SADC) member states are expected to meet behind closed doors in Gaborone. The meeting will likely be chaired by the host Kitso Mokaila in his capacity as Botswana’s Mineral, Energy and Water Resources minister.  The main agenda, we have been told will be electricity and water supply in the region. The two utilities as we all can tell have been a headache for most SADC member states for the past several years. 

We have also been told that before the ministers meeting there shall be a workshop (talk-shop maybe?) that is meant to facilitate exchange of ideas and forge practical and sustainable solutions towards the energy and waters crisis in the region. 

With a view to map out a strategic direction and agree on a way forward, both the workshop and the ministers meeting will see representatives of national energy and water regulators and utilities as well as thematic group members from SADC converging at the Gaborone International Conference Centre (GICC) on Monday. 

Since the series of meetings will be attended by amongst others academic research and training institutions, it is our hope that such intellectuals will be fair enough not to just advise policy makers on the way forward but also highlight to them the factors that have led to the current situation we find ourselves in. 

For the sake of space and time perhaps we should narrow our commentary to two of the members’ states being the big brother ÔÇô South Africa and its junior partner ÔÇô Botswana. The story between the two member states could be a true reflection of what has been going on in this regional bloc. 

Our interest this time around is more precisely on energy than on water. We should note before we go any further that Botswana cannot compete with South Africa. That is well documented. Any attempt by the junior partner to compete with the big brother does not receive much support. However because Botswana has large natural resources second to none in the continent, the country can use this comparative advantage to stake its claim in its trade relationship with its now “big brother.”

A good example of how South Africa refused regional integration is the Mmamabula Energy Project (MEP) which failed a few years ago. The project was or rather remains Botswana’s attempt to narrow the trade imbalance as it was going to export 75 percent of power from the plant that was initially 2400 MW. Sadly the project was scaled down because of lack of buy-in from power utilities in the region including South Africa’s Eskom. The project located in the central part of the country was aimed at exploiting the country’s bragged about 200 billion tones in coal reservesÔÇöthat remains largely untapped even to date. 

By then, MEP, which was sponsored by CIC Energy, a Canadian company, actually never took off. The former Chief Operating Officer (Projects) and now Managing Director at Norconsult Africa, Tore Horvei has shed light that actually: ‘Mmamabula failed because of political reasons’.

Even South Africa’s intellectuals saw this lack of vision by the so called big brother. Anton Eberhard, a Professor at the University of Cape Town’s Graduate School of Business and a member of the National Planning Commission wrote in South African newspaper, BusinessDay that should have Eskom signed Power Purchase Agreement with CIC Energy for power offtake; it could have alleviated power difficulties that are hurting South Africa’s economy.

As those who followed the MEP could easily tell, the failure was simply due to power games. South Africa had a target date to gazette their Integrated Resource Plan (IRP) by September 2010. This would lay out Big brother’s strategy for meeting new energy needs from 2013 onward, assumed to include new government-owned facilities and contracts with private suppliers such as CIC Energy. 

At the time, South Africa said they could not commit to any Power Purchasing Agreement (PPA) with CIC before the IRP was approved. The delay would affect Botswana, which needed a portion of the plant’s output to meet projected demand. The IRP was eventually completed in May 2011. It did not include any window for purchase of power from Mmamabula before 2019, and then the amounts purchased would be less than 1200 MW. CIC Energy was forced to put the project on hold after investing over C$100 million. 

To date both South Africa and Botswana are faced with power problems. Botswana heavily relies on imported power from South Africa’s Eskom when its “almost” 600 MW power station called Morupule B is both on and off-line. At the same time South Africans are always accusing their government of neglect mainly because of instances where Big brother’s Eskom chose to export power to Botswana at their expense. BPC heavily pay for such and it’s the tax payer’s money that is ultimately wasted. 

Although so far, unlike in previous winter season the power outages currently are not as bad, the #Bottomline remains that we would have not been in this current situation had we given regional integration the utmost attention it needs. There is no single doubt therefore that the current power problems in SADC are a true reflection that regional integration is still lacking. We all ought to agree that Mmamabula would have not solved the regional power problems, but atleast it could narrowed the trade gap between Botswana and South Africa and at the same time equally lessening the impact of power cuts in the region.  The situation we find ourselves could have been avoided or minimised if projects like Mmamabula energy projects were supported. So on Tuesday when ministers meet in they should own up to failures to deliver power to the people. 

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