Local Firm to Set Up 100 MW Solar Plant in Botswana

The Botswana energy regulator has granted a generation licence for a 100 MW solar project to local firm Shumba Energy, making it the first independent power producer to set up a large scale solar plant in the country, according to media reports.

This landlocked country in Southern Africa does not currently have large scale solar power generation and its 600 MW national energy demand is met by state owned coal-fired plants and imports, primarily from South Africa and Mozambique.

Additionally, rural Botswana is poverty stricken and about 46% of the country’s children under the age of 15 are vulnerable to poverty. Issues of unavailability of important resources, such as electricity, extend beyond the country and are reflective of problems facing many countries in Africa. According to the African Development Bank Group, 640 million people of the continent do not have access to energy, with more than 30 out of the 54 countries going through an energy crisis.

Locally-listed Shumba Energy plans to implement its solar project in Botswana in two phases with construction of the first phase of 50 MW likely to start in the next six months. Having received the necessary permits, the company is now reportedly working on concluding the funding, with capital expenditure estimated at about $80 million for the whole project.

According to analysts, Botswana has 212 billion tonnes of coal reserves and the fossil fuel is expected to continue to dominate power generation in the country in the near future. But the country also has some of the highest levels of direct normal (solar) irradiation (DNI) – a measure of the amount of sunlight – at over 3,000 kWh/m2 per annum, according to solargis.com, a global agency on solar data.

Last month, Botswana’s efforts to accelerate key economic and green policy reforms got a boost following the approval of a $250 million loan by the World Bank. The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) is intended to support the implementation of Botswana’s Economic Recovery and Transformation Plan and is designed to strengthen COVID-19 pandemic relief while bolstering resilience to future shocks.

“This operation will also support reforms to attract private sector investments, contribute to diversification of exports, and increase job opportunities towards a green economy,” World Bank Country Director for Eswatini, Botswana, Lesotho, Namibia and South Africa, Marie Francoise Marie-Nelly had said in June.

Many analysts believe that with the right investors and the ever-decreasing cost of renewable energy, especially solar, Africa could very well become an important renewable energy hub offering interesting investment opportunities, especially for for U.S. companies. In line with that vision, Botswana, which abounds in diamonds, seems to have begun exploiting its other major resource—solar.