Botswana eyes power exports with $100m solar plant

Botswana is set to begin construction of its first large-scale solar plant after developers secured $100 million in financing, as investors bet that rising electricity demand across southern Africa will create a lucrative market for surplus power.

Developers of the Tati Solar Project completed financial arrangements, with FirstRand Ltd. unit Rand Merchant Bank acting as lead arranger for the 100-megawatt plant. The project, which will sell power into the Southern Africa Power Pool, will be developed by Shumba Energy Ltd.’s Etavi Renewables and targets commercial operation by 2027.

“We arranged and underwrote the entire financing package,” Siyanda Mflathelwa, RMB’s head of infrastructure sector solutions, said in an interview. “We found a financing structure that is commercially viable at utility scale for a pure market view into the SAPP and that’s great, because it increases the volumes that are now traded on the SAPP day-ahead market.”

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The SAPP, set up in 1995, is a regional electricity market that allows utilities and independent producers to sell power across borders. The platform, which serves 12 countries and more than 360 million people and businesses, is becoming increasingly important as electricity demand rises across the region, driven by mining expansion, data centers and efforts to improve energy access.

At the same time, climate-related droughts have reduced hydropower output in countries like Mozambique, while the retirement of carbon-intensive generation has created a need for new supply.

“We’re starting to see investors taking a view that there is sufficient demand that justifies the investments in the capital expenditure,” Mflathelwa said, citing Tati as an example.

South Africa is also set to increase supplies to the SAPP, with as much as 53 gigawatts of new generation capacity due to come online by 2032.

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Still, RMB sees scope for the SAPP to expand further through integration with South Africa’s Wholesale Electricity Market. The market was created after record blackouts prompted South Africa to allow private companies to build power plants of any size and sell electricity into the grid.

Linking the platforms would improve price discovery and help direct surplus electricity across southern Africa, which faces a deficit of 4,200 megawatts, even as countries such as South Africa and Mozambique have excess capacity, Mflathelwa said.

The deficits are concentrated in Zambia and the Democratic Republic of Congo, she said. Those countries are home to significant critical minerals that will support the next wave of artificial intelligence, she added. “So we see a lot of the deficits, and a lot of the planning for new generation coming from those regions.”

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