Gaborone, April 2025 — In another blow to Botswana’s financial stability narrative, Moody’s Investors Service downgraded the outlook on Botswana Power Corporation (BPC) from stable to negative on April 8, 2025, while affirming the entity’s credit rating.
The move comes just days after a similar action was taken against the Government of Botswana, raising red flags over systemic risks in the country’s public sector.
Highlights
- Moody’s affirms BPC’s credit rating but changes outlook to negative.
- The shift mirrors Botswana’s sovereign outlook downgrade on April 4.
- Concerns grow over fiscal support sustainability, infrastructure investment shortfalls, and energy sector risks.
Systemic Implications
As a state-owned utility, BPC is closely tied to the sovereign creditworthiness of the country. Moody’s rationale for the downgrade is twofold: weakened fiscal buffers at the government level and the growing financial strain within BPC’s operations.
The utility has faced rising input costs, delayed tariff adjustments, and aging infrastructure—all of which threaten its long-term viability.
“The negative outlook reflects BPC’s increasing reliance on government support amid rising systemic fiscal pressures,” said Moody’s.
Botswana’s Energy Sector Under Pressure
The downgrade comes at a time when Botswana is attempting to diversify energy sources and expand domestic generation capacity. However, projects such as the expansion of the Morupule B power station have been marred by delays, cost overruns, and political interference.
BPC’s financial position is further strained by limited cost-reflective tariffs and a high dependency on government bailouts to manage liquidity.
Policy Signals and Strategic Concerns
Government officials have reiterated their commitment to ensuring a reliable electricity supply. However, the Moody’s decision increases the urgency for policy reform and tariff restructuring to improve BPC’s financial autonomy.
Investor Confidence at Risk
While Moody’s maintained the rating itself, the negative outlook signals heightened risk that could affect BPC’s ability to raise capital, particularly for its renewable energy transition plans. It also underscores broader investor concerns over Botswana’s fiscal discipline.
