The World Bank approved its first loan for Botswana's renewable energy development through the RESA Project on July 11, 2024, aiming to enhance electricity access and promote renewable energy solutions in the country.
335 MW of Renewable Energy Projects
In a landmark decision, the World Bank's Board of Directors has approved its first lending operation aimed at supporting renewable energy development in Botswana. The Botswana Renewable Energy Support and Access Accelerator (RESA) Project which was sanctioned on July 11, 2024, represents a significant step toward transforming the nation’s energy sector by promoting renewable energy solutions and enhancing electricity access.
According to a release on its website, the World Bank has committed a $122 million loan to help Botswana diversify its energy sources and reduce its reliance on fossil fuels. This financial boost will fund the construction of a 100-megawatt solar power plant and support a comprehensive renewable energy program designed to bring electricity to rural and off-grid communities.
Blessed with abundant renewable energy resources, Botswana has set ambitious targets to increase its renewable energy share to 30% by 2030 and 50% by 2036. The initial phase includes the development of 335 megawatts of renewable energy projects, currently in various stages of implementation by private sector power producers.
First of its Kind in Botswana
The new World Bank project aims to finance critical grid investments and Botswana’s first 50-megawatt utility-scale battery energy storage system, ensuring the seamless integration and management of these renewable energy projects into the national grid. Furthermore, the RESA Project will support the Government of Botswana’s ongoing efforts to extend the electrical grid to rural villages and enhance electricity services in the southern districts.
“With the financing support and technical assistance from the World Bank, this investment will support us to harness our rich renewable energy resources for a reliable, affordable, and sustainable energy future. This is not only critical for our own energy security, but also provides an important driver of economic growth,” stated Honorable Minister of Minerals and Energy of Botswana, Lefoko Moagi.
The project’s financing comprises an $88 million loan from the World Bank, a $30 million loan, and a $4 million grant from the Green Climate Fund which was mobilized through the Sustainable Renewables Risk Mitigation Initiative (SRMI) at the Energy Sector Management Assistance Program (ESMAP). Additionally, the project will benefit from a $3.5 million grant from ESMAP for technical assistance in developing solar, wind, and storage projects. This combination of technical assistance and public investment aims to mitigate the risks associated with renewable energy investments.
Impact of the Project
The financial backing from the World Bank and Green Climate Fund marks a significant milestone in Botswana’s journey toward renewable energy. The 100-megawatt solar power plant - once operational - will contribute substantially to the nation’s energy grid, reducing the dependency on fossil fuels and lowering carbon emissions. The addition of the 50-megawatt utility-scale battery storage system is also crucial; as it will stabilize the grid; store excess energy generated during peak solar production; and ensure a consistent energy supply even when solar production is low.
“The World Bank is pleased to support Botswana’s commitment to expand domestic energy generation with renewable solutions. In addition to financing, the World Bank will provide technical assistance to facilitate further renewable energy projects. This is an important part of our commitment to support more sustainable and inclusive growth in Botswana,” said Satu Kahkonen, World Bank Country Director for Botswana.
Botswana’s ambitious renewable energy targets are not just about enhancing energy security. They also represent a broader vision for economic growth and environmental sustainability. The integration of renewable energy into the national grid will create jobs; foster technological advancements; and attract further investments in the energy sector. Additionally, rural electrification initiatives will improve the quality of life for many Batswana; enabling better access to education, healthcare, and economic opportunities.