Wednesday, October 27, 2021

Tomorrow marks start of Energy regulatory body in Botswana

The Botswana Energy Regulatory Authority will come into effect tomorrow (April 1). 

Botswana Power Corporation Chief Executive Officer (CEO) Stefan Schwarzfischer made this known last week Tuesday at the Botswana- Mozambique Investment Forum. 

Schwarzfischer was speaking on the opportunities for Independent Power Producers (IPPs) on the generation and export of power.   

The CEO’s statement took a cue from the investment and trade promotion mission in which the two countries had brought together their respective business communities as well as high level government officials to exchange investment opportunities. 

One of the opportunities specific to the energy sector that he mentioned is the upcoming tender opportunity to IPPs to build two solar energy projects in the country. Of significance to this bidding opportunity is the introduction of the energy regulator which Schwarzfischer emphasised will ensure an enabling environment for the performance of the sector.  

He revealed that the two solar projects were expected to deliver 100MW to which he said the right partners needed to be found. The tender will be open to foreign investors. 

The participation of IPPs in the local energy sector had been held back mainly because the energy regulator had not been in place.  

Schwarzfischer opined that going forward the generation of power will not be the issue but rather its distribution. He said in that regard emphasis should be on building new transmission lines so as to expand the distribution of power. 

“We need to share power in a free trading environment,” he said. In addition Mashale Phumaphi, the CEO of a local energy development company, Shumba Energy, said from the perspective of IPPs that they would need the tariffs to be cost reflective as a subsidised environment is not going to get the amount of energy needed to meet the current deficit. 

In the case of Mozambique, IPPs were said to generate 400MW of power and that their involvement ranges from consulting and developing infrastructure for power projects.        

The intention of the investment forum is that by profiling and promoting existing opportunities headway can be made, expanding the buying market for each of the countries’ goods and services, as well as enabling the flow of foreign direct investment into the respective countries so as to fund key areas for economic growth and development. 

The two countries took turns in dissecting their value propositions delivered by various industry titans. The President of Mozambique Filipe Nyusi advised the local business community to act on the opportunities within the opened window of opportunity lest Mozambique looks to other investor horizons. 

Information presented by Lourenco Sambo, the Director in the Investment Promotion Centre (CPI) from Mozambique showed that Botswana needed to find a spot in the list of its top 10 investors. A noticeable traction was shown in the tourism sector in which the number of tourists from Botswana into Mozambique reached a peak in 2016.  

This investment and trade engagement was not a first for the two countries. Three years ago Botswana companies travelled to Maputo to participate in a similar forum which had been assisted by the local investment and trade promotion agency, Botswana Investment and Trade Centre (BITC). 

In addition the companies had exhibited at the Feira Internacional De Maputo (FACIM), an international expo with a participation of over 2000 exhibitors from a total of over 16 countries and 144 000 visitors. 

The interactions came shortly after Botswana was ranked by Quantum Global in the 2016 Africa Investment Index as the best investment destination on the continent based on a range of factors that included improved credit rating, current account ratio, import cover and ease of doing business. 

Quantum Global is an international group of companies active in the areas of private equity investments, investment management as well as macroeconomic research and econometric modeling. 

Other key sectors that were discussed were agriculture, tourism and infrastructure to which it became obvious from the discourse that both countries need an injection of private capital so as to assist further economic growth. 

The established joint ventures, it was said, would launch the countries to tap into the 250 million market of the SADC region.

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