Is Botswana Power Corporation falling into a P48 million trap in Zim?

BPC recently entered into agreement with ZESA that it would pay out P48 million towards the refurbishment of the dysfunctional Bulawayo Thermal Power Station. Once operational the power station will generate 90 Megawatts. In return BPC would import 40MW as part of the deal, which will commence in June this year.

However, responding to Mmegi enquiries this week BPC said that the Inter- Govermental Memorandum of Understanding is yet to be signed between the two governments.

While the talks are ongoing, the Zimbabwe media reported that the Zimbabwe government has ordered the Power Utility in the country to stop electricity exports to Namibia. The Herald newspaper reported this week that Energy Minister Elias Mudzuri said the power utility could not continue exporting electricity to Namibia under a deal signed in 2007, while simultaneously importing to cover a perennial power deficit. In 2007, Zimbabwe and Namibia entered into an agreement under which Namibia gave Zimbabwe a 40-million-dollar loan for repairs to its thermal power stations, while Zimbabwe would pay back by exporting electricity to Namibia.

The two governments have been close friends since the beginning of the economic and political crisis in Zimbabwe. At some point Namibia even threatened to emulate Zimbabwe land invasions as part of land distribution to the landless poor from the rich land owners, mostly of white settler stock.

Unlike Namibia the Botswana government has been too hostile to president Robert Mugabe over the past two years. At some point the Botswana government refused to recognise Mugabe as President after June 2008 disputed Presidential elections in which he was unopposed in the run-off after his challenger Morgan Tsvangirai pulled out of the race citing security of his supporters.

As the friction between the two governments heated up, the Zimbabwe government in turn accused the Botswana government of training Movement for Democratic Change (MDC) youth in the country to topple Mugabe. In response the Botswana government described Mugabe’s remarks as "ridiculous". The matter is still pending at the SADC Troika on Politics and Security. The recent accusation was that Botswana was hosting Voice of America that promotes anti-Mugabe statements. The government dismissed the accusations as hogwash.

The main question is how Botswana Power Corporation could enter into such an agreement when it is not clear whether the political temperature between the two countries has stabilised lest a repeat of what is happening to Namibia happens to Botswana.  BPC entered into two other power agreements in Mozambique and Democratic Republic of Congo. Minister of Energy and Water Resources Ponatshego Kedikilwe could not be reached for comment. 

BPC is able to supply only 30 per cent of local demand after Eskom of South Africa recently cut 100MW and intends to cut more before the end of this year. BPC says that the 70MW power station recently built by APR Energy – Florida in Orapa would not help BPC meet local demand. "The power supply is still constrained regionally and as such if the demand is not managed and customers do not strictly adhere to all power conservation methods the power disruptions remain inevitable. Electricity demand is also tied to the activities of the economy, as the economies recover from the recession demand will increase and this will invariably put a strain on the electricity supply," says a response from BPC.

With political stability still suspect in Zimbabwe the crucial question remains:  What would BPC do if the Zimbabwe government decides to switch Botswana off immediately after it has refurbished the power station to be operational?