Despite the annual increase in electricity tariffs, Minister of Mineral Resources, Green Technology and Energy Security Lefoko Moagi says Botswana Power Corporation (BPC) tariffs are still not cost reflective.
When presenting his ministry budget proposals before parliament on Tuesday this week, Moagi who is also Member of Parliament (MP) for Ramotswa said it was necessary to review BPC tariffs annually as despite the increases, tariffs are still not yet cost reflective.
During the financial year 2020/2021, Botswana Energy Regulatory Authority (BERA) reviewed the BPC electricity tariffs and a 22 percent tariff increase was awarded to the Corporation.
In 2021/2022 financial year, the regulator awarded BPC a tariff increase of 3 percent.
The corporation has made a 5 percent increase proposal for the 2022/2023 financial year which the BPC aims to raise P6.155 billion to meet its operating, maintenance and financing costs.
For the financial year 2022/2023, Lefoko has proposed a development budget of P893.8 million for his ministry with the bulk of it going towards BPC.
“The largest share of the proposed Development Budget, which is P600 million representing 67 percent of the budget, is allocated to the BPC Support Programme,” said the minister, adding the provision is to cushion the Corporation against non-cost reflective tariffs.
The second largest share will go towards National Oil Security Projects which will take P150.6 million or 17 percent of total development budget for the ministry while the Rural Electrification and Network extension programme will be allocated P44 million thereby taking the third largest share.
Meanwhile, Lefoko told parliament that his ministry expects total revenue amounting to P17.8 billion during the 2022/2023 financial year.
“This represents an increase of 26 percent from the current year’s revised revenue budget of P14 billion,” Moagi said.
“The bulk of the increase is expected from Mineral Royalties and Dividends. As depicted by the current year’s performance, the diamond market is expected to perform better as restrictions imposed due to COVID-19 globally are slowly eased.”