Botswana Power Corporation (BPC)’s application to hike tarrifs by 46 percent has met stiff resistance from business groups and other consumers. They argue that a proposed 46% average electricity tariff increase would punish consumers for failures the utility itself has yet to fix.
The application, submitted by BPC for the 2026/27 financial year, would lift the weighted average tariff from P1.56 to P2.28 per kilowatt hour and eliminate government subsidies altogether. Stakeholders say the plan risks turning electricity pricing into a blunt instrument for cost recovery rather than a lever for reform.
One of the most detailed critiques comes from Mokenti Raborokgwe of the Botswana Exporters and Manufacturing Association (BEMA), who argues that the tariff application fundamentally misdiagnoses the problem. Drawing on BPC’s 2023 annual report, the most recent published, Raborokgwe contends that nearly half of the P9.039bn revenue requirement underpinning the application reflects avoidable inefficiencies rather than unavoidable structural costs.
‘Nearly P4.343bn of the revenue requirement is driven by inefficiency rather than reform,’ he says, warning that households and businesses are being asked to underwrite operational failures.
The sources of inefficiency are well documented. Presenting at the ‘Tariff Application Public Hearing’ hosted by the regulator Botswana Energy Regulatory Authority (BERA) recently, Raborokgwe says system losses remain well above international best practice, payroll costs are high relative to customer numbers, and capital expenditure has repeatedly fallen short of plan, undermining reliability. Renewable penetration remains low, he says, leaving the system exposed to volatile imports.
‘Most damaging is the chronic underperformance of Morupule B Power Station, the country’s flagship coal facility. Operating at roughly 63% availability in 2023, it has forced BPC to import expensive power and rely on emergency generation, inflating costs that are then passed directly to consumers.’
Benchmarking against regional peers reinforces the point. On losses, generation availability, renewables share and staff productivity, Botswana’s utility lags comparable operators.
Raborokgwe argues that approving tariffs on a simple cost-recovery basis would entrench these shortcomings. ‘Approving tariffs on a cost-recovery basis would force households and businesses to subsidise inefficiency rather than reform,’ he says, insisting that regulation should focus on cost-reflective tariffs, prices aligned to efficient costs, rather than a blanket pass-through of all expenses.
He argues if avoidable inefficiencies were addressed, the revenue requirement would fall sharply, implying that only a single-digit tariff increase would be needed to restore balance. Even allowing for gradual improvement, Raborokgwe recommends a conditional, phased adjustment capped at about 24%, explicitly linked to measurable performance milestones in loss reduction, generation availability, payroll rationalisation and renewable deployment. Concerns about transparency add to the unease. BPC’s 2024 annual report has yet to be published, limiting scrutiny of recent performance and claimed improvements. Raborokgwe warns that ‘it is impossible for stakeholders to responsibly contribute to this debate without access to BPC’s 2024 Annual Report’, urging the regulator to withhold any final approval until current, auditable data are available. Without such disclosure, he argues, tariff decisions risk being made in an atmosphere of opacity.
Business groups echo these concerns, but focus more squarely on the economy-wide consequences. In a submission to the regulator, Business Botswana warned that the proposed increase is ‘unreasonable, unaffordable, [and] economically devastating for businesses and job creation’, adding that it is ‘based on flawed methodologies’.
Electricity is a key input across mining, manufacturing, tourism and services; a sudden increase of this magnitude would, the group argues, cascade through costs, prices and employment.
The timing is particularly sensitive. An average 24% tariff increase took effect in July 2025, and many firms are still adjusting. Imposing another sharp rise months later risks accelerating what economists describe as a ‘utility death spiral’: higher tariffs push customers to cut consumption or invest in self-generation, shrinking the sales base and forcing further increases. Business Botswana’s survey evidence is stark. Nearly 78% of respondents opposed the proposal, describing it as excessive and unjustified. Micro and informal enterprises-often thinly capitalised-would be hit hardest, while larger manufacturers anticipate multi-million-pula annual cost increases.
‘Electricity is already a major operating cost,’ the submission notes, warning of cost-push inflation and job losses. The regulator, BERA, sits uncomfortably between competing imperatives. It must ensure the commercial sustainability of the utility while protecting consumers and promoting economic efficiency. Business Botswana argues that a 46% jump fails test of necessity and proportionality, particularly amid weak growth and high unemployment.
It calls instead for predictable, multi-year pricing with single-digit annual increases, complemented by demonstrable efficiency gains and targeted relief for vulnerable sectors such as health, manufacturing and agriculture.
BPC insists that decisive action is unavoidable. Decades of tariff suppression, it says, have left the utility financially fragile and unable to invest adequately. Solar projects coming online will help diversify supply and reduce import costs, but legacy issues; debt, maintenance backlogs and unreliable generation, remain. Without a step change in revenues, BPC argues, these problems will persist.
However, consumers question why the costs of delayed projects, weak governance and underperforming assets should be socialised through tariffs rather than addressed through shareholder support, restructuring or tighter oversight. They urge more sophisticated pricing-time-of-use tariffs, differentiated rates for energy-intensive industries, and targeted subsidies to soften the economic blow while reforms take hold.