Africa-Press – Botswana. Parliament has cleared the way for a P6.3 billion financial injection after passing the Standard Chartered Bank Loan Bill under a certificate of urgency to rescue a parched national budget and settle a mounting backlog of government debts.
Presenting the Bill on Monday, Vice President and Minister of Finance, Mr Ndaba Gaolathe acknowledged the country’s difficult economic situation, adding that despite austerity measures, government continued to face high expenditure pressures and slower-than-expected revenue recovery.
Minister Gaolathe said in recent months, authorities had struggled to meet monthly obligations, resulting in payment delays, stalled projects and strain on service delivery and local businesses.
“This is not a theoretical concern. It is a lived reality,” the minister said. To protect economic stability and ensure continuity of public services, he said government secured short-term liquidity support and longer-term financing from commercial banks for the 2026/2027 financial year. He told Parliament that a major part of such was the P6.3 billion facility from Standard Chartered Bank Botswana, backed by a World Bank Group guarantee through the Multilateral Investment Guarantee Agency (MIGA).
“The MIGA guarantee provides political and credit risk insurance, lowering the lender’s risk and allowing government to access more favourable borrowing terms at significantly reduced interest rates,” he explained.
Mr Gaolathe said the loan would finance four strategic and implementation-ready infrastructure projects aligned with the 2026/2027 budget and national development priorities, which included the Kanye and Moshupa Water Supply Distribution Network Rehabilitation, which involved full rehabilitation and reticulation in Kanye and Moshupa villages, including feeder lines, reservoirs and telemetry/SCADA systems.
The project, he said, was estimated to cost P1 billion, for a duration of 36 months and was ready for procurement. The other project would be the Molepolole Water Supply Network Rehabilitation which would upgrade water distribution and sanitation networks in Molepolole.
He said despite adequate bulk supply from the newly completed Gamononyane-Molepolole North South Carrier project, the village still suffered from inadequate distribution due to dilapidated and undersised pipes.
The project has an estimated duration of 24 months and currently at the tender evaluation stage. The Francistown (Mambo) Waste Water Scheme included comprehensive rehabilitation and upgrading of the ponds system, pipelines, pump stations, expansion of the treatment plant from 15 millilitres per day to 30 millilitres per day, remedial works on the wastewater collection system and installation of telemetry equipment. The project has a duration of 36 months and ready for procurement. The North-West Transmission Grid Connection Phase 2 (NWTG II) is a high-impact national infrastructure initiative to expand power transmission capacity in northern Botswana.
It supported economic transformation, energy security and regional integration and formally included in the Botswana Economic Transformation Programme (BETP) and the Botswana National Energy Compact.
The project, which comprises Lot 5 and Lot 6, is implementation-ready. Mr Gaolathe said such initiatives aimed to improve access to reliable water and energy, enhance service delivery, stimulate economic activity and support long-term resilience.
He highlighted the facility’s key terms of loan amount of P6.3 billion, interest rate of Euribor + 1.6 per cent (all-in rate approximately 4.19 per cent based on current Euribor of 2.59 per cent), tenure of 15 years and a five-year grace period. He said the extended grace period provided breathing room for government to implement economic reforms, strengthen revenue collection and advance diversification efforts without immediate debt-servicing pressure.
The minister further said the P6.3 billion facility formed part of a larger package of loan authorisations being processed through Parliament, including other facilities from Standard Chartered Bank Botswana and Stanbic Bank Botswana, aimed at addressing the overall financing gap for the current and upcoming financial years. Minister Gaolathe stressed that the borrowing was not merely to bridge short-term gaps but to invest in tangible projects that delivered real benefits to citizens while protecting the nation’s long-term fiscal health. He said the urgent passage of the Bill reflected government’s determination to act decisively amid ongoing economic headwinds.
DAILYNEWS
