05 Oct 2021
Botswana penned a loan agreement with the World Bank on Monday worth $250 million.
This is Botswana’s first budget support loan received from the World Bank, according to the country’s minister of finance and economic development, Peggy Serame at the signing in Gaborone.
The financing will help Botswana to bolster private sector development and foster a strong, green recovery, Serame stated. This will comprise of reforms to increase renewable energy production by independent power producers, climate change considerations in environmental assessments and the promotion and regulation of rooftop solar energy generation.
World Bank Country Director for Eswatini, Botswana, Lesotho, Namibia and South Africa, Marie Francoise Marie-Nelly, said Botswana has massive potential in the renewable energy sector in regard to local consumption and exports.
According to a World Bank press release earlier this year when the loan was announced: “The Programmatic Economic Resilience and Green Recovery Development Policy Loan (DPL) will 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.”
The Bank’s country director went on to say: “The COVID-19 pandemic has placed a great burden on the country’s economy, its people, and firms. With this operation, the World Bank will support the government’s reforms to ensure social spending reaches the poorest and assists Batswana who are most affected by the Covid-19. This operation will also support reforms to attract private sector investments, contribute to diversification of exports, and increase job opportunities towards a green economy,”
Botswana’s debt has risen since 2020. The economy kicked off last year with a P30.4 billion debt before ending the year with P38.6 billion in loans. The increase was predominantly due to domestic borrowing, rising from P15 billion to P22 billion.