Botswana Power Corporation (BPC) could face greater pressure on electricity procurement costs as South Africa reforms its power market, potentially changing how electricity is priced and traded across the region.
South Africa’s Cabinet has approved for public comment a revised electricity pricing policy that seeks to make tariffs more cost-reflective and separate charges for generation, transmission, distribution and retail.
The reforms are intended to move South Africa towards a more competitive electricity market, with greater participation by independent generators and traders.
For Botswana, the changes matter because BPC remains exposed to South African electricity prices despite growing domestic generation.
BPC chief executive David Kgoboko recently told a government assurance committee that the corporation buys electricity from South Africa, Namibia, Mozambique and Zambia at prevailing industry rates, while domestic tariffs do not fully recover supply costs.
BPC’s 2024 integrated report showed power-import expenditure more than doubled to P3.676 billion from P1.641 billion, contributing to a post-tax loss of P1.842 billion.
Botswana has reduced its reliance on imports, with electricity imports falling 61.8 percent year-on-year to 220,305 MWh in the first quarter of 2026. Eskom nevertheless supplied 80.9 percent of those imports.
The reforms could eventually benefit Botswana if greater competition and investment increase regional electricity availability. But the transition could also introduce greater price volatility as South Africa moves towards a more market-based system.
The pressure comes as BPC remains reliant on government support. Minerals and Energy Minister Bogolo Kenewendo said government provided about P2.5 billion to BPC during 2025/26 period.
South Africa has also approved an 8.76 percent increase for Eskom direct customers for 2026/27, while municipal tariffs will rise by 9.01 percent.