18 May 2026

Botswana Power Corporation (BPC) cannot remain financially viable without tariff adjustments that reflect the true cost of electricity.

BPC chief executive officer Mr David Kgoboko told the Parliament Standing Committee on Statutory Bodies and State Enterprises that non-cost-reflective tariffs were driving habitual losses and that the price at which BPC sold electricity to customers was heavily subsidised and did not cover the cost of generating, transmitting and distributing power.

The problem was compounded by imported electricity, he said, adding that BPC bought power from South Africa, Namibia, Mozambique, and Zambia at industry rates and yet sold it locally at a lower price.

Mr Kgoboko noted that Botswana’s consumer tariffs were the lowest in the region even though BPC operated under the same conditions as similar entities in other countries in the region“If we continue importing electricity under the current tariff structure, we face either deeper losses or more load rationing,” he said.

Mr Kgoboko acknowledged operational and governance improvements at BPC, but said financial sustainability had weakened due to structural constraints.

He also noted that local power generation availability had improved from 30 per cent to 65 per cent over the past five years, yet revenue growth had not followed.

“This is primarily due to non-cost-reflective tariffs and the rising cost of power imports, which increased from an average of 85 thebe to P2.60 per kilowatt-hour over the period under review,” he said.

The BPC has submitted annual tariff adjustment applications to the regulator to allow gradual increases and avoid sudden shocks to consumers and a spike in inflation.

However, he said only a three per cent increase was approved in 2021, after which tariffs remained unchanged for the three years that followed.

“The lack of timely tariff adjustments has resulted in a build-up of unrecovered costs, which may necessitate significant corrective measures, including substantial tariff increases, to address shortfalls from prior years,” Mr Kgoboko said.

He stressed that the challenges required policy-level intervention, not just operational fixes.

The corporation is facing sustained net losses, liquidity pressure, and cash-flow constraints driven by rising operating costs and tariffs that cover only 55 to 60 per cent of supply costs, noting that each unit sold generated a loss.

Also, he said in 2024, BPC secured P1.7 billion in external funding to clear a backlog of liabilities, a relief which he explained was temporary.

He said structural commitments had led to a renewed build-up, with creditor balances now standing at around P3.5 billion.

Mr Kgoboko also said under the National Electrification Fund (NEF) Policy, BPC also collects and remits a levy to finance connections under the National Electrification Scheme, and further said more than 36 000 customers were still awaiting connections. ENDS