The regulatory framework for electricity generation in Botswana is set out in the Electricity Supply Act, in terms of which the Ministry of Minerals, Energy and Water Resources (MMEWR) is responsible for the regulation of electricity generation and distribution. The Act places a prohibition on the generation or supply of electricity without a licence issued by the Minister.
The prohibition is not applicable to generation of less than 25KW or generation by a Government department. In December 2007, the Government of Botswana amended the Electricity Supply Act to allow for Independent Power Producers (IPPs).
The establishment of an independent electricity and water regulatory authority in Botswana is currently under consideration by the Government. In 2012 the Botswana Energy and Water Regulator (BEWR) Taskforce was set up to establish a regulatory framework for the energy and water sectors.
According to a presentation by the Department of Energy Affairs* dated 31st January 2012 made to the Coal Roadmap “Pitso” (meeting), MMEWR was reported to be in the process of creating the Botswana Energy and Water Regulatory Authority (BEWRA) which was to ‘Constitute an independent regulator that will regulate energy prices and tariffs as well as industry structure in a prescribed manner.’ The presentation further states that the purpose of BEWRA will be to:
- Set up conditions for and issue Licenses and grant Permits to carry out activities for Energy and Water sectors
- Regulate prices/tariffs in the above sectors
- Arbitrate in disputes between Licensees and their customers or between Licensees themselves
- Set a criteria and monitor the performance and quality of supply standards in the Energy and Water Sectors.
Proposed legislation for the establishment of the regulator is apparently under discussion and is yet to be tabled before Parliament for consideration.
It is common cause that Southern Africa as a whole is experiencing frequent shortfalls in the available supply of electricity relative to demand. Earlier this year Southern Africa’s biggest power producer Eskom, declared a power emergency in South Africa as a result of failure to meet demand. The huge and ever increasing demand for electricity in Botswana specifically and the region as a whole has fuelled the interest by Independent Power Producers to tap into Botswana’s vast coal resources and generate electricity. If and when licences are granted to IPPs in the future, there will be need for a strong regulatory body such as the proposed BEWRA to ensure that there is full compliance with laws, regulations and policies relating to the generation of power of Botswana.
Written by Terence Dambe, Managing Partner and Head of Real Estate, Minchin & Kelly, a member of DLA piper Africa