Botswana Power Corporation Faces Financial Strain Amid Rising Energy Costs

Botswana Power Corporation Faces Financial Strain Amid Rising Energy CCosts. The Botswana Power Corporation (BPC) is experiencing increasing financial pressure as it struggles to recover the full costs of generating and importing electricity. The situation has prompted the government to provide additional subsidies to maintain a stable energy supply.

The National Energy Compact for Botswana highlights that BPC’s financial position has deteriorated significantly in recent years, raising concerns over the long-term sustainability of the country’s electricity sector. Rising production and import costs have outpaced revenue from tariffs, leaving the utility reliant on government support.

Over the past five years, BPC has implemented tariff increases to offset these costs. In 2020/2021, a 22 percent tariff hike was introduced, followed by a 3 percent increase in 2021/2022. Despite these measures, the corporation’s subsequent applications for tariff adjustments in 2023 and 2024 were rejected, widening the gap between operational costs and revenue.

For Botswana’s business community, the financial challenges facing BPC carry implications for both operating costs and planning. Businesses that rely heavily on electricity may face increased exposure to unstable supply or higher future tariffs, while entrepreneurs and startups may need to consider energy efficiency measures or alternative power solutions.

Experts say the situation underscores the importance of financially sustainable energy policies and the potential role of private-sector solutions, including renewable energy and independent power producers, to supplement national supply.