Africa Energy: Botswana’s power utility lifts tariffs by 10%

The Botswana Power Corporation (BPC) said on Thursday it had increased electricity tariffs by 10% as the loss-making utility tries to recover costs.

BPC has made operating losses for years due to high import costs, non-performing assets and operational inefficiencies. That has made the company reliant on government subsidies to stay afloat, but it is now slashing costs as part of a turnaround plan.

The 10% adjustment will apply to all consumer categories and was effective from April 1.

“Government has approved a combination of an adjustment to existing tariffs, and a subsidy cash injection to BPC,” the power utility said.

BPC said it received a subsidy of 800-million pula ($83-million) for the 2018 financial year, down from about 3-billion pula in subsidies in the past two years.

BPC slashed its operational losses by 83% in the year ended Jan. 31, 2018, to 200-million pula, after cutting imports and overhead costs, and helped by another tariff adjustment in April 2017, BPC Chief Executive Officer Stefan Schwarzfischer said.

The company aims to be able to operate without a government subsidy from 2020 and Schwarzfischer said its subsidy would be reduced to 400-million pula in 2019.