Member Info for mrmoagi

Constrained government revenues mean increased private participation is needed to fill remaining infrastructure gaps. Rail, air, roadway, and digital infrastructure, for instance, can benefit from public-private partnerships (PPPs) that can increase private participation. More than 10 years after approving its PPP policy in 2009, PPP activity in Botswana remains limited. As of April 2022, only two independent power producers (IPPs) are in operation, with six recently awarded generation licenses. There have been other attempts at using PPPs, such as building a new science and technology university. According to the IMF, the 2009 PPP policy is comprehensive and reflects many good practices, but it also has some weaknesses—mainly that it does not explicitly apply to SOEs or parastatals. The BPC and IPPs are linked through power purchase agreements, but in contrast to central and subnational governments, the BPC is not required to consult the PPP unit in the Ministry of Finance and Economic Development (MoFED). A small number of PPPs were procured in recent years under the Public Procurement and Asset Disposal (PPAD) Act, despite not providing adequate guidelines on the quantification of fiscal implications of PPPs. Moreover, those PPPs were procured without the full involvement of the PPP unit of MoFED. Government has since replaced the PPAD Act with the Public Procurement Act (PPA) No. 24 of 2021 which covers PPPs, rather than enacting a separate PPP law, to improve the legal and regulatory framework related to the use of PPPs.

Energy: Botswana’s energy sector provides significant private sector opportunities to supply key growth industries, services, and households with sustainable, costeffective, and domestically produced energy that will contribute to productivity and diversification as well as higher-quality jobs and social inclusion. With a focus on renewable energy generation, Botswana can leverage its comparative advantage to produce solar energy and support energy diversification in the region. Further, as climate changes create challenges of increased demand and seasonality, a robust energy supply will be needed to ensure climate resiliency.

Botswana’s ambitions to green its economy are held back by the high cost of environmental goods and services (EGS) compared with the cost of traditional carbonintensive products. This high cost constrains the private sector’s uptake of such goods and services. For example, given the widespread abundance of solar radiation, investment in solar energy is a cost-effective solution in the long term for many firms in Botswana but this solution suffers from high initial costs of investment and low quality products. However, the average price of a solar installation is 50 percent higher in Botswana compared with the price of a traditional generator (US$9,920 and US$6,594, respectively) for comparable power output, which makes solar a less cost-effective solution in the short term and decelerates private sector shifts to renewable energy sources. EGS trade barriers also affect complementary services such as installation and maintenance of sustainable energy products (solar panels, wind turbines), which remain of poor quality as the market for EGS remains small in Botswana. Improving access to imported services from neighboring countries can reduce costs of services related to EGS.

Furthermore, the legal framework governing SOEs is fragmented—it has multiple laws with conflicting and outdated requirements. This fragmented framework adversely affects SOE viability, compliance, and accountability. The ownership of SOEs is decentralized, with ministries having the authority to establish SOEs with the Cabinet’s approval. No overarching framework guides the establishment process, especially the requirement to consult other institutions and assess the need and capacity of the state to own another entity. In addition, no ownership policy exists to guide the ministries on establishing and monitoring the SOEs. The current ownership model results in line ministries acting as shareholders, policy makers, and regulators. This undermines accountability and creates a conflict of interest between line ministries’ responsibility for setting sectoral policies and for managing SOEs’ day-to-day businesses.

Infrastructure, access to financing, and skills •
Strengthen implementation of existing and higher-quality digital infrastructure development at the national level to facilitate the digital transition to a high data volume, knowledge-based economy. •
Facilitate better quality infrastructure through an improved public investment management framework (i.e., better project appraisal, selection, and monitoring) and greater integration in transportation subsector planning, including increased Southern African Development Community integration for the development of better transport networks. •
Attract foreign investment through the inclusion of SOEs in the public-private partnerships law, preparation of a dedicated investment policy and investment law, and improving the investment dispute system. •
Coordinate an approach to encourage early-stage finance for entrepreneurial startups and small and medium enterprises (SMEs), including through regulatory reforms, uptake of digital banking methods, and digitization of SMEs as described in the National Entrepreneurship Policy and e-commerce strategy. •
Assist firms trying to fill immediate skills gaps with labor from abroad by streamlining the cumbersome processes firms face when obtaining employment permits for foreigners.

Develop credit-enhancement and risk-mitigation strategies and supporting instruments to attract and mobilize private sector investment, including sovereign guarantees, backstops on liquidity and termination, and foreign exchange rate risk mitigation in power purchase agreements.

The first recommendation is the fast tracking of instruments to facilitate investment in energy infrastructure development, including independent power producer (IPP) licensing, and procurement guidelines and processes.
The second recommendation is the enhancement of the institutional capacity and governance model of the Botswana Energy Regulatory Authority (BERA).
The third recommendation is the development of credit-enhancement and risk-mitigation strategies and supporting instruments to attract and mobilize private sector investment. Risk-mitigation instruments such as sovereign guarantees, backstops on liquidity and termination, as well as foreign exchange rate risk mitigation in power purchase agreements are critical to ensure private sector participation and need to be considered by policy makers.

Smith - before you challenge me on any aspect below - go read the report - all 119 pages. Take your time as well ….. Pages 58 to 73 should focus your effort

And start to realise what a clusterfcuk of a place Botswana became under SIK leadership for near 15 years. A cess-pit of ever increasing corruption and systematic State Capture (mirroring what Zuma and Ramaphosa led in SA).
Trying to turn that around will take 20 years probably. Trying to do it whilst the Khama Family are fighting at every juncture to save themselves; appreciating how that does nothing to improve the functioning of Govt who itself is reasonably clueless on governing - it is a completely new team of people and Ministers …… - maybe if any of these realities permeate your dull skull, then maybe just maybe you will start appreciating why TG isn’t the greatest ever for choosing Botswana; why Tlou isn’t the best investment prospect in the market; why you p

The regulator has insufficient financial and policy independence.
BERA is still a nascent regulator, operating for less than five years. Although it is the final decision maker in licensing, it is not the final decision maker on tariffs. International experience shows that licensing, tariff determination, and conflict resolution should be handled solely by the regulator without interference by other parts of government. Regulator independence, accountability, and transparency give investors and industry players confidence in the regulator.

Inadequate renewable energy frameworks.
A lack of specific renewable energy regulatory frameworks—such as grid access provisions for renewable energy producers and a simplified licensing framework specifically for off-grid systems—stifles private sector participation in renewable electricity generation. Botswana has neither a network connection policy nor a national transmission grid code to govern the development, operation, maintenance, and use of the national transmission system; it also does not have regulatory mechanisms for ancillary service pricing. Currently, the African Development Bank (AfDB) is supporting the review of the regulatory framework for IRP implementation and Licensing Framework as well as the development of Grid Code, Cost of Service Study and Tariff Framework though the Sustainable Energy Fund for Africa (SEFA) grant.

Unreliable transmission infrastructure.
The utility is facing major power supply disruptions caused by maintenance backlogs, aging infrastructure, and network overloads. Currently, BERA has completed the development enforcement guidelines, net metering rules, tariff review methodology, performance monitoring framework with key performance indicators, and guidelines for power purchase agreements for guiding BPC and investors. The regulator is finalizing the development of licensing guidelines.

Insufficient institutional capacity.
There is inadequate regulatory capacity with regard to the level of skills and number of personnel in key functional areas. An independent assessment of BERA found that it was severely understaffed, with only 41 out of 91 planned positions filled, and 29 of those being support staff. This insufficient capacity delays the development of regulatory instruments to facilitate investment in energy infrastructure. Further, even though Botswana is currently at an advanced stage of procuring the 100-MW solar power plants and the 35-MW (12 grid-tied) solar power plants, it does not have a track record of procuring and implementing large-scale renewable energy projects and IPPs.

Each major constraint on private investment in Botswana’s electricity sector is discussed in the following sections.

High perceived investment risk in the power generation subsector.
Given the financial sustainability concerns of the off-taker, and while sector reform is ongoing, providing sufficient comfort and visibility to the private sector is essential to attract quality, competitive bidding to the IPP process while strengthening BPC financial sustainability. The progress recorded so far is not yet commensurate to significantly reduce the perceived investment risk in the power generation subsector. A clear path to commercial viability of the BPC with tariff reform; an independent regulator for tariff setting; independent governance; demonstration of viable operation; and the potential issuance of improved independent, stand-alone long-term credit ratings and bonds would provide a longer-term basis to look at future structures that can attract financing with reduced government support.

However, in the short to medium term, government support (such as guarantees to cover liquidity and termination payments) can help to attract quality competition between bidders, entice larger more experienced IPP sponsors whose economies of scale can profitably accommodate lower costs of production, leading to lower tariffs. This is turn can help strengthen the financial sustainability of BPC, as observed in other countries on the continent through the deployment of sustainable and bankable procurement programs, for example, the World Bank Group’s scaling solar program that has been successful in reducing upfront development risks and driving down tariffs in Zambia and Senegal, among others.

Constraints on private investment:
Despite the government of Botswana’s interest in increasing private sector participation to relieve electricity supply constraints, results thus far have been disappointing. Since 1985, energy sector developments have been guided by the Botswana Energy Master Plan, which was reviewed in 1996 and 2002. The National Energy Policy was developed in August 2008 but because of extensive consultations and revisions it was not adopted by parliament until April 2021. As a result, for about 15 years, between the end of the Botswana Energy Master Plan and approval of the National Energy Policy, energy sector development progressed without any overarching guiding instrument. This situation dampened investor confidence because there was no assurance from the government on the developmental direction of the energy sector. BERA has recently awarded generation licenses to six IPPs for both domestic and export sales,169 but none of those IPPs are operational yet mainly because of significant institutional, regulatory, financial, and risk mitigation challenges.

Now Smith - do yourself a favour and go read the long form report; all 119 pages of it and start to learn something about Botswana and the weak framework in place there for Private Sector investment to flourish.
Stop banging on about your pathetic petty views of TG is the greatest; volume is picking up; spreads are telling us something; SM is our saviour; crypto will be great; oh let’s pivot back to gas and CBM (they never pivoted away from it - you did); Orapa is waiting in the wings; Botswana coals are the best….

You have bored all of us for long enough - just dry up !!!

The next series of posts is extracted from the 119 pages - try appreciate the info it alludes to

https://www.ifc.org/wps/wcm/connect/bb819007-f6ba-43bc-a6f5-13cd0508790f/CPSD+Botswana+Exec+Summary+CW05.pdf?MOD=AJPERES&CVID=o7gbctIWorld Bank and IFC saying just how much ground Botswana needs to make up to get Govt, the state owned enterprises (heavily dependent on Govt funding), the institutions, the economy restructured and maybe then moving in a concerted forward direction. There is an article in The Patriot on Sunday saying Govt borrowing in Botswana hits all time high. It’s tough to restructure the wheels of Govt when it is already hamstrung for cash.

Great coals / carp Govt / naive or maybe just plain lazy CEO.

Is it time yet to talk about TGs assertion that Botswana’s coals were the best in the world he had ever seen. And that is what drew him to Botswana - as the next leading frontier in global CBM……

Because - it is such a shame that the CEO of the company didn’t do his due diligence as well on the country risk, development of policy and regulation, understood just how difficult it would be to get a new business working in Botswana when it was directly opposed by the local coal mining lobby.
All the things a proper CEO and Board are supposed to look at and assess, rather than diving in with a great story and raising millions of dollars and issuing nearly as many shares … with basically 15 years of lives wasted pursuing a payday that from here on will never generate realistic investment returns.

All of us - every one of us - suckered !!

And only 1 who refuses to acknowledge ….

Long way to go then before Green Hydrogen becomes the nirvana our resident sparrow brain believes.

Frankly it is just sad seeing him make a fool of himself. And backing it up by suggesting anybody with spare cash to put in Tlou.

How many more years does he need until the penny drops

The tensions between Russia and the rest of Europe over natural gas flows have underscored the unsustainability of the continent’s energy system. With the right mix of infrastructure investment, Europe can emerge from the upheaval with a system that is cheaper, achieves the region’s net-zero carbon emissions goals and is more secure, according to Goldman Sachs Research.

• It will take €10 trillion of investment by 2050 for Europe to transform its energy infrastructure, according to Goldman Sachs’ Carbonomics framework. The spending is estimated to eventually pay for itself from savings on energy imports.

• The new system would be more affordable. The energy costs for the average European consumer could be cut by 40% versus prices in 2021 (and by 60% compared to the expected peak this year).

• Natural gas is going to be a key part of Europe’s energy supply for the next 20 years, and long-term contracts for liquefied natural gas (LNG) would strengthen energy security and allow a new generation of LNG projects to be developed for Europe.

• Renewable power will be at the heartof the future energy system. Seasonality and the energy requirements for transportation and heavy industry mean that green hydrogen will also be a key component and will eventually make up 15% of the energy system.

In which fantasy reality is Gas considered to be green?! Gawd almighty - what piffle.
Solar has always been available to every African county - eerrrr No. The technology is only recently becoming cost effective for African countries and IPPs - more piffle.
Solar energy is only available during daylight hours - no shoot Sherlock. Wow, amazing piffle.
I mean FFS your post is full of the biggest load of mumblefcccuk I have ever read - even you have outdone yourself for posting ‘total piffle’.
Tlou are starting small and keeping shares below 1 billion for shareholders - if you had said 100m, then maybe you would have a point. Do you actually know how many zero’s there are in one billion ? Eeerrrrr an awful lot - more piffle.

You and I ain’t sharing a room - I would rather go down with the Titanic !

Still, you must appreciate me posting again - gives you someone to talk at.

https://www.sundaystandard.info/world-bank-proposes-reforms-to-botswanas-energy-sector/

Finally, an article starting to get to the crux of why everything in Botswana energy sector has been a big pile of Poppy pooh. Govt and Ministry were too terrified to let go of control, open up to private sector and IPPs.
Is also the reason Tlou decided on small scale, scalable approach - and even when that was absolutely no threat to the domestic power generation status quo, it still has taken Tlou a lifetime to make progress with what is still a proof of concept pilot project. That was first mooted in late 2016 - 5 years later. Classic Africa.

Am surprised someone of TG skill set, and Brad and Tidd et al didn’t appreciate any of this. Or maybe they did and it was part of the plan all along.
Yeah right …. keep pulling them.

How much tripe did you talk over past year about option being exercised, in the money, out of the money, TG knows what he is doing, blah blah blah …. endless blah.
And when nobody bothers to respond to you and your meaningless and irrelevant posts - what do you do…..
You keep on posting irrelevant twaddle and your personal twaddle.
Sounds like you are every bit as knackered as Tlou share price is knackered

The GOAT thinks that the political engineering ongoing in the land Tony picked as the best coals destination in the world has no relevance to why Tlou continues to be the biggest flop since flip flop was invented.
No problem - everyone is entitled to their opinions.
The only reason this does not resonate with GOAT is because it discusses or hypothesises about something on which he is clueless. Which of course he will never ever admit to.

No doubt some will pillory me for bringing up the memory of the late Linda L - my intention with this post is not to criticise her. Rather it is to draw attention to an ever-widening chasm of political intrigue and fighting among the Botswana elites.

Various people in Botswana are being exposed for their past alignment with regime under Ian Khama. Linda L is now being included in this posse, since they are suggesting she had to be complicit in facilitating major remittance of Botswana funds offshore for payments of Govt contracts to Botswana firms awarded the tenders by various Ministries.
There was always the story in Botswana doing the rounds as to why Khama awarded Linda a top of the range Mercedes (or maybe was BMW) as her retirement present when stepping down from Bank of Botswana. It was never a good look.

And since the current Govt are putting the forensic lense on anyone and everyone associated with pretty much any decision under the Khama era, well now yawl know why things in Botswana are moving even more slowly that usual.
Covid and state of emergency for 2 years was the perfect smokescreen for Masisi and current Govt enforcement agencies to start looking back and under the bonnets.
Khama is implicated in Botswana Pula being stolen from Cyril Ramaphosa farm 2 weeks back in SAfrica. And Linda L name is increasingly being dragged into the noise by virtue of her position as former Governor of BoB - most of the time when Khama was El Presidente. It 10% is not a good look and sadly for Linda’s legacy, probably going to get worse.
Some will question the relevance here; who cares - you can’t teach fools to understand

Who was it that said - yday - at least I try to keep the topic on Tlou