Investment in the Morupule B Power Station (Botswana) – A Strategic Overview

Good morning, let’s get into it!

The Morupule B Power Station, located in Palapye in Botswana’s Central District, is a large-scale coal-fired power plant development that was conceived to significantly boost Botswana’s domestic electricity generation capacity and reduce dependence on imports. World Bank+1

The project comprises multiple phases:

• Phase I (Units 1-4): Four 150 MW units (totaling 600 MW) were planned and executed as part of the government-owned utility Botswana Power Corporation (BPC) expansion. African Development Bank+2Daily News+2

• Phase II (Units 5-6): An additional 300 MW (two 150 MW units) was tendered as an IPP (independent power producer) model, intended to be financed and operated by a private consortium under a long-term power purchase agreement (PPA) with BPC. Sekitan+2Sunday Standard+2

Key motives for the investment include:

• Securing domestic supply: At the time of planning, Botswana imported a large share of its electricity from neighbouring countries; developing the Morupule B plant would improve supply security and reduce import dependency. World Bank

• Supporting economic growth: Reliable and increased power supply is critical for industrial development, mining operations and national infrastructure initiatives.

• Utilising domestic coal resources: The plant is sited next to the existing coal mine Morupule Colliery Limited, taking advantage of local feedstock. China Global Development Dashboard+1

Location and link to Selebi-Phikwe

While the Morupule B station is physically located near Palapye, the transmission infrastructure links it into the national grid and via sub-stations in the region that serve towns including Selebi‐Phikwe. For example, the 105 km 400 kV transmission line connects Morupule B to the existing 400/220 kV substation near Selebi-Phikwe (Phokoje substation). African Development Bank+1

Who the investors are (and financing details)

Phase I (600 MW, Units 1-4):

• The bulk of financing came through export-credit facilities and commercial debt. For example, the Chinese bank Industrial and Commercial Bank of China (ICBC) provided a USD 825 million export-credit facility for the project. China Global Development Dashboard+1

• Other financiers included the African Development Bank (AfDB) and the International Bank for Reconstruction and Development (IBRD / World Bank Group), contributing debt. Open JICA Report+1

• Equity and project company contributions came from BPC and the Government of Botswana. For example, the debt-equity ratio was reported as approximately 70 % debt to 30 % equity. China Global Development Dashboard

Phase II (300 MW, Units 5-6 – IPP model):

• A consortium formed by Japanese trading house Marubeni Corporation and South Korean company POSCO Energy (50 % each) won the preferred bidder selection in December 2015 for the project. newsroom.posco.com+1

• The investment value was reported at around USD 800 million for the 300 MW expansion. Sekitan+1

• However, in 2019, Marubeni pulled out of the project after investor, export-credit, and policy conditions changed. IEEFA

Key issues and implications

• The project experienced significant delays: For example, the Phase I units were originally scheduled for completion around 2012, but were only fully handed over in May 2014. Daily News+1

• Technical and operational problems affected the reliability of the plant, leading to concerns about cost and efficiency. Global Energy Monitor+1

• Environmental and social impact assessments flagged potential risks: increased emissions (SO₂, particulates), water use, and coal resource impacts. World Bank

• For Botswana, the successful operation of Morupule B is pivotal in shifting from electricity importer to potential exporter, but the financial viability remains sensitive to tariffs, operational uptime, and coal supply.

What it means for readers / Botswana’s economy

• For investors focusing on Botswana, Morupule B illustrates a major infrastructure investment with both high upside (energy security, industrial growth) and high risk (technical, financial, environmental).

• For local entrepreneurs and professionals: Reliable power underpins growth in sectors such as manufacturing, mining, and services. A country with weak generation capacity limits value-creation domestically.

Source

• An advisory note by Delphos International shows that the project comprised 600 MW (4×150 MW) and total infrastructure (plant + transmission + water supply) financing of about US$1.68 billion. Delphos

• A document from World Bank details the project: the plant is a 600 MW coal-fired station to be built by Botswana Power Corporation (BPC) adjacent to its existing facility, with generation, transmission and water-supply components. World Bank

• The AidData database provides the breakdown of financing: US$825 million by Industrial and Commercial Bank of China (ICBC) export credit facility; US$136.4 million by the World Bank; US$202.5 million by the African Development Bank (AfDB); and equity of US$498.4 million from BPC / Government of Botswana. China Global Development Dashboard+1

• Additional commentary from the Institute for Energy Economics & Financial Analysis (IEEFA) notes that for the planned expansion (Units 5-6, 300 MW) of Morupule B the Marubeni Corporation / POSCO Energy joint venture were selected as preferred bidders — though the deal subsequently ran into problems. IEEFA

• A policy paper on infrastructure financing in Botswana notes that the Morupule B Generation and Transmission Project was prioritised in the country’s National Development Plan 10, to support reliable and affordable electricity supply, and strengthen institutional capacity in the energy sector. saiia.org.za