The Act came into effect on 1 April 2017 and establishes the Botswana Energy Regulatory Authority (“BERA”), which has the primary mandate of the economic regulation of the energy sector. The Act has a multi-sector focus and has tasked BERA with oversight over the electricity, petroleum products, coal, natural gas, bio-energy, solar energy, renewable energy resources and other energy sectors. In terms of the Act, BERA shall be responsible for setting and maintaining service standards; ensuring sustainable and secure supplies in the energy sector; protecting and preserving the environment ; and maintaining best international regulatory practice.
To this end, BERA has been granted powers to issue licences to existing and prospective commercial players in the Botswana energy sector; to monitor, inspect and enforce licence obligations; to regulate tariffs in the energy sector; to oversee project development in the energy sector; to regulate network and storage system access in the energy sector; and to implement government policy related to electricity generation. The Act empowers BERA to grant exclusive licences that allow its holders to carry out one or more activities within the energy sector throughout the whole of Botswana.
BERA’s powers and functions shall be exercised by an eight-member Board appointed by the Minister of Minerals, Green Technology and Energy Security. One of BERA’s chief functions shall be the licensing of service providers and other entities operating within Botswana’s energy sectors. In terms of the Act all licences are issued after application by the desirous licensee and comprehensive assessment by BERA. Determination of an application for licensing shall be made on two primary factors:
- whether the issue of the licence will bring any benefits to the economy and consumers; and
- whether the desirous licensee can provide the intended service(s) in a safe and sustainable manner.
BERA shall have the power to suspend and revoke any licences issued by it. BERA shall also be responsible for the regulation and review of tariffs in the Botswana energy sector in terms of government policy and international best practice. Further, BERA shall have the power to supervise and investigate the conduct of any commercial players operating in the energy sector and to enforce against defaulting parties. Monetary penalties for defaulting corporate entities shall be in the form of fines not exceeding 10% of the entity’s annual turnover.
The establishment of BERA comes at the most opportune time, with numerous investors and independent power producers (IPP) seeking to establish a commercial presence in Botswana. The Act is a significant step in matching the Government’s ambitions for active diversification and energy security with the legislative framework, and will allow commercial players in the energy sector to conduct themselves with knowledge of what is expected by the regulating entity.
As at publication of this Newsflash, the attendant regulations to the Act have not yet been enacted.