BMI View: Botswana's construction industry, especially the infrastructure sector, is heading into a period of sustained growth on the back of continued investment in the mining sector and the development of associated transport and power infrastructure. However, we highlight challenges to sector development resulting from electricity and water shortages.
Latest Updates And Structural Trends
A joint venture between Japanese firm Marubeni Corporation and South Korea's Posco Energy secured a USD800mn contract to expand the coal-fired Morupule B power plant in Botswana. The plant's capacity will be expanded by an extra 300MW from its existing capacity of 600MW. The plant's output will be sold to Botswana Power Corporation under a 30-year power purchase deal at BWP812.56 (USD73.21) per megawatt hour. Construction is scheduled to begin in late 2016, with the first power from the expanded plant to be added to the national grid by 2020. Additionally, plans are in the works to expand the plant by another 300MW, to a total capacity of 1,200MW.
Doosan Heavy Industries and Construction of South Korea has won a USD204mn tender to refurbish the Morupule A power plant. The plant has been shut since 2012 and has a total capacity of 132MW.
Shumba Coal plans to develop a solar power station to generate up to 200MW, with power from the station supplying upcoming copper mines in the Kalahari copper belt. This follows a June 2015 announcement from Cupric Canyon Capital that it would begin building a copper mine in the Kalahari copper belt in 2016, close to where the solar power station will be built. In addition, African Energy Resources is considering doubling its investment at the Sese power project. Current plans are for a 300MW coal-fired plant at an estimated cost of USD750mn.
Botswana is expediting construction of a BWP16bn (USD1.6bn) pipeline, which will supply water from the Zambezi River to southern Botswana, and plans to complete the project in seven years. Negotiations will be completed by 2016, with final implementation expected in 2026. According to Kgomotso Abi, permanent secretary at the Ministry of Minerals, Energy and Water Resources, the government is reviewing its original designs for the project, as cited by Engineering News. The pipeline was originally planned to draw 495mn cubic metres of water a year for a commercial agriculture project in the north west, but the water shortage in the southern part of the country has forced the government to reprioritise. The first phase of the scheme will involve a pipeline leading to the Pandamatenga farms, while the second phase will comprise a pipeline from Zambezi to Francistown, then continuing to the southern part of the country.
|e/f = BMI estimate/forecast. Source: Central Statistics Office, BoB, BMI|
|Construction industry value, BWPbn||9.53||10.57||11.74||13.09||14.53||15.98||17.90||20.05||22.41||25.10||28.16|
|Construction Industry Value, Real Growth, % y-o-y||3.20||6.85||6.00||6.50||6.00||5.00||7.00||7.00||6.80||7.00||7.20|
|Construction Industry Value, % of GDP||6.3||6.5||6.6||6.7||6.8||6.8||7.0||7.2||6.8||6.9||7.1|
Botswana has regained first position in BMI's Infrastructure RRI for Sub-Saharan Africa, with a score of 52.8 out of 100.
It has above average scores for all indicators, making it the most attractive out of the 16 countries we cover in the region.
The economy has been growing impressively since independence in 1967, driven by a strong mining sector and political stability.
|Risk/Reward Index||Rewards||Industry Rewards||Country Rewards||Risks||Industry Risks||Country Risks|
|Scores out of 100, with 100 the best. Source: BMI|
The Botswana Infrastructure Report features BMI Research's market assessment and forecasts covering public procurement and spending on all major infrastructure and construction projects, including transportation and logistics by land, sea and air; power plants and utilities, and commercial construction and property development. The report analyses the impact of regulatory changes and the macroeconomic outlook and features competitive intelligence on contractors and suppliers.
BMI's Botswana Infrastructure Report provides industry professionals and strategists, sector analysts, investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the Botswanan infrastructure and construction industry.
- Benchmark BMI's independent infrastructure industry forecasts for Botswana to test other views - a key input for successful budgetary and planning in the Botswanan infrastructure market.
- Target business opportunities and risks in the Botswanan infrastructure sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Botswana.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis covering infrastructure and construction, regulatory changes, major investments and projects and significant national and multinational company developments. These are broken down into construction (social, commercial and residential), transport (roads, railways, ports, airports, etc), and energy & utilities (powerplants, pipelines and so on).
Industry SWOT Analysis
Analysis of the major strengths, weaknesses, opportunities and threats within the infrastructure and construction sectors and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (up to 2012) and forecasts to end-2024 for all key industry indicators, supported by explicit assumptions, plus analysis of key developments in the market and risks to the main forecasts. Indicators include:
Construction: Industry value (USDbn); contribution to GDP (%); total capital investment (USDbn); real growth (%).
Construction industry real growth forecasts (%) and industry value (USDbn) forecasts for industry sectors are split into Residential and Non-residential and Infrastructure sectors. Where the data is available for particular countries the infrastructure is further broken down into indicators for the transport subsectors of roads, railways, airports and ports and the energy and utilities sub-sectors of power plants and transmission grids, oil & gas pipelines and water infrastructure. This dataset is unique to the market.
The reports also include analysis of latest projects across the infrastructure sectors (transport, utilities, commercial construction).
BMI’s Infrastructure Risk Reward Index
BMI’s Risk Reward Index provides investors (construction companies, suppliers and partners) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each position explained.
An assessment of the competitive landscape and key challenges to entering the market. Details of the largest companies active in the sector across the sub-segments of the industry, including the key financial figures from some of the largest players in the sector.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
The Infrastructure reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.