Consumers should brace for a possible hike in electricity as early as April this year as government strives to boost revenue for cash strapped Botswana Power Corporation (BPC). The Minster responsible for energy, Kitso Mokaila hinted this week that the embattled corporation could be given a ‘go ahead’ to increase electricity tariffs.
Last year the corporation increased the tariffs by an average 10 percent.
Available figures show that the BPC is currently operating on net current liabilities of P2.3 billion. Its financials shows that its working capital as at March last year reflected current assets of P1.3 billion while current liabilities stood at P3.6 billion. Mokaila says currently electricity tariffs are not cost reflective as BPC is losing about 50 thebe on each unit they sell. BPC charges about 57 thebe per unit for domestic consumption that is below 200 KW per hour.
“As a result Government is obliged to provide a subsidy to sustain the utility. To this end electricity tariffs will be gradually adjusted until they are cost reflective. However to cater for Low Income Households and Small Industries the increases on the first 200 Units and 500 Units will be marginally lower.”
It has since emerged that a large part of BPC’s direct costs are incurred in procuring power from external sources, part of which was subsidised by Government through an emergency power grant. Last month Minister responsible for finance and development planning Kenneth Matambo said that the Corporation will be allocated P1.5 billion to cover tariff subsidy and some operational expenses during the 2015/16 financial year.
“A total of P12.93 billion is proposed for the development budget for the financial year 2015/2016. The largest share of the development budget is allocated to the Ministry of Minerals, Energy and Water Resources (MMEWR) at P3.32 billion or 25.7 percent of the budget. This will allow Government to continue to address the water and power issues facing the country by putting in place appropriate infrastructure,” Matambo said Monday.
Matambo also announced that government has budgeted P100 million towards the refurbishment of Morupule A, P100 million for electrification of villages while P50 million will be spared for the North West Power Transmission Grid. Government also expect to spend atleast another P50 million at Rakola Power Substation while the ZIZABONA regional power project is estimated to cost atleast P33 million.
“A total of P150 million has been allocated for construction of an Oil Storage facility at Tshele Hills in Kgatleng District to address various energy needs in the country,” Matambo said.