CDM Investor Guide for Botswana - ACP-CD4CDM

29 Pages·2013·1.32 MB·English

CDM Investor Guide for
Botswana

December 2012 Issue
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Table of Contents
Executive Summary
Abbreviations
1. Country Profile

2. Institutional infrastructure for Climate Change in Botswana

3. Analysis of Industrial sector in Botswana and Opportunities for CDM

3.1 Mining
3.2 Energy
3.3 Agriculture
3.4 Waste

3.5 Sources of GHG emissions

4. Sources of GHG emissions
5. Current State of CDM project development in Botswana

6. CDM project Approval procedure in Botswana

7. SD criteria

8. New Market Mechanism

9. Conclusion

10. References

11. Annexes
11.1 Contacts for project developers
11.2 Government Departments
11.3 CDM consultants in Botswana

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Acknowledgements
The preparation of the CDM Investor Guide for Botswana has been undertaken by the
DNA secretariat in the Department of Meteorological Services under the Ministry of
Environment, Wildlife and Tourism. The DNA secretariat acknowledges United Nations
Environment Program – Risoe Centre (URC) for financial support and guidance to the
development of the CDM Investor Guide for Botswana.

The secretariat also recognizes contributions by the Department of Energy under the Ministry
of Minerals Water and Energy Resource and Statistics Botswana. Special appreciation also goes

African Development Bank for editing the guide and providing invaluable contribution.

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Executive Summary
This investor guide is an initiative by Botswana Designated National Authority (DNA) located at
the Department of Meteorological Service (DMS) in collaboration with the United Nations
Environment Program – Risoe Centre (URC) based in Denmark and EECG consultants to attract
local, regional and international investment on Clean Development Mechanism (CDM) projects
in Botswana. The collaboration with URC was formed through multilateral environmental
agreements in Africa, Caribbean and Pacific to assist participating countries including Botswana
to fully take part the global carbon market.
This guide is aimed at giving quick information to potential CDM investors about Botswana and
processes in place for CDM investment.
The main objectives of the guide are to:
• Provide CDM investors with information on CDM opportunities in Botswana
• Give an overview of institutional structure for climate change activities in Botswana
• Provide investors with current status of CDM activities in Botswana
• Avail list of CDM projects in the pipeline, CDM advisors and government organizations
involved in CDM
• Provide CDM approval procedures in Botswana
• Provide information on opportunities beyond CDM

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Abbreviations
BPC Botswana Power Corporation
CDM Clean Development Mechanism
CERs Certified Emission Reductions
CME Coordinating and Managing Entity
CSO Central Statistics Office
CPA CDM Programme Activity
CPA-DD CPA Design Document
DOE Designated Operational Entity
DNA Designated National Authority
DWMPC Department of Waste Management and Pollution Control
EB Executive Board
EIA Environmental Impact Assessment
EECG Energy, Environment, Computing & Geophysical applications
EU European Union
EU ETS European Union Trading Scheme
GHG Greenhouse Gases
IPCC Intergovernmental Panel on Climate Change
LDC Least Developed Countries
LoA Letter of Approval
LONO Letter of No Objection
NCCC National Climate Change Committee
PDD Project Design Document
PoA Programme of Activities
PoA-DD PoA Design Document
PP Project Participant
SADC Southern African Development Community
SD Sustainable Development
SAPP Southern African Power Pool
URC United Nations Environment Program – Risoe Centre
UNFCCC United Nations Framework Convention on Climate

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1.0 Country Profile
Botswana is centrally located in the heart of Southern Africa and neighboured by Zimbabwe,
Zambia, Namibia and South Africa. It is a land-locked country occupying a total land area of 581,
730 km2 between longitudes 20 and 29.4° E and latitudes 17.8 and 26.8°S. Botswana generally
has a flat surface and semi-arid with approximately 75% of its area covered by the Kalahari
Desert. Figure 1.1 below shows Map of Botswana with major towns and villages and its location
in Southern Africa. According to the 2011 census the total population is estimated at 2, 024 904
with an expected growth rate of 1.9% (CSO 2011).

Figure 1.1. Map of Botswana and location in Southern Africa

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Botswana offers excellent investment opportunities in various sectors including Mining,
Agriculture particularly beef industry, Tourism, Manufacturing, Finance, Services, Transport,
and Communication. The country boasts of world recognition amongst developing countries
for its prudent macroeconomic policies, good governance, political stability and well managed
growing economy over 45 years of its independence. Prior to independence agriculture had
been the main economic source (specifically, beef production) contributing to 40% GDP.
Recurrent and prolonged droughts, semi- arid condition and erratic rainfall have had negative
impacts on the agricultural sector shrinking its economic contribution to 2.1% GDP in 2011.
The discovery of diamonds in the early 1970s paved way to the country’s economic prosperity
accounting to 50% GDP in the mid 1980s. Increased mineral production stimulated
infrastructural development and the expansion of Government services. Sustainable economic
diversification is currently a priority in the current development plan, and there is indication of
progress as other sectors like tourism have reduced reliance in minerals to about 40% of the
GDP. Botswana aims to further diversify its economy and reduce heavy reliance on minerals
hence promoting other sectors. Foreign investment and management are encouraged in
Botswana hence abolishment of foreign exchange controls in 1999 and adoption of both a
Privatization Master Plan and a new Competition Policy by Botswana's parliament aimed at
fostering economic diversification.
The development priorities of Botswana are focused on diversifying the economy, creating
employment, reducing poverty, providing infrastructure and recovering its cost, developing
human resources, rural development, improving environment and land use policy, and policy
reform in the public sector. Achieving sustainable development is one of the key goals of
Botswana’s national plan.

2.0 Institutional infrastructure for Climate Change in Botswana

2.1 International Conventions and Protocols
Botswana is not spared by climate change, its impacts and associated challenges facing the
world today and developing countries. As such Botswana is a founding signatory of the United
Nations Framework Convention on Climate Change (UNFCCC) at Rio de Janeiro in June 1992.
The objective of being party to the UNFCCC is to stabilise greenhouse gas concentrations in the
atmosphere at a level that would prevent dangerous anthropogenic interference with the
climate system. Botswana ratified the Convention on 27 January 1994 and it came into force for
Botswana on 27 April 1994. The Kyoto Protocol legally binds industrialised country parties to
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reduce their emissions levels by 5% from the 1990 levels. In August 3rd, 2003, Botswana became
a party to the Kyoto Protocol which came into effect in February 2005. As a developing country,
Botswana has no obligations to reduce greenhouse gas emissions but has obligation under the
convention to report on the anthropogenic sources and sinks of greenhouse gases and identify
measures to minimize the impacts of global warming and climate change. The Initial national
Communication was developed and submitted to the UNFCCC in 2001. The preparation of the
Second National Preparation has been completed and the report is undergoing final review.

2.2 National Climate Change Focal Point
Botswana is fully committed to the full implementation of global initiatives outlined in the
UNFCCC hence the establishment of the national focal point at the Department of
Meteorological Services (DMS) under the Ministry of Environment Wildlife and Tourism to
coordinate and implement climate change initiatives. One of the initiatives was to set up a
multi-sectoral National Committee on Climate Change (NCCC) in 1995 to provide among other
duties guidance on development areas, facilitate national research programmes concerning
global warming and climate change and advise government. As one of the tasks the committee
oversees the preparation of the National Communications to UNFCCC.

2.2.1 Botswana Designated National Authority (DNA)
Mitigating climate change by reducing greenhouse gas emissions has become one of
Botswana’s priorities. Therefore Botswana has made some effort to embark on the
opportunities provided by the Kyoto Protocol specifically through participation in the Clean
Development Mechanism (CDM) and Emissions Trading (ET). To benefit from the Clean
Development Mechanism of the Kyoto Protocol of the Climate Change Convention, The
Ministry of Environment Wildlife and Tourism with the assistance of the World Bank Carbon
Finance established a Designated National Authority (DNA) at the Department of
Meteorological Services in November 2007. A legislating instrument mandated the Department
to implement the clean development mechanism, register, approve project proposals and
assess their ability to meet the set sustainable development criteria, National Meteorological
Service Act 2009.
The first years of the DNA establishment were dedicated to institutional arrangement and
capacity building with one benchmarking mission to Brazil in 2008. In 2010 a 3 year institutional
strengthening project started between Botswana DNA and United Nations Environment
Program – Risoe Centre (URC) based in Denmark. EECG, a consultancy company was contracted
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to provide technical assistance for identifying, developing and process of registration of CDM
projects in Botswana. The outcomes anticipated through this partnership is to build a national
CDM project portfolio, market potential projects at the international Carbon Expos, to enable
Botswana to penetrate the carbon market and register CDM projects by the end of 2012.

2.2.1.1 Technical committee to Review Projects
The NCCC has also been given among its duties to evaluate CDM projects for compliance with
Botswana’s sustainable development criteria. Its representation comprises of membership from
the following Ministries and organizations:
• Ministry of Environment Wildlife and Tourism
• Ministry of Trade and Industry
• Ministry of Foreign Affairs and International Cooperation
• Ministry of Minerals, Energy and Water Resources
• Ministry of Finance and Development Planning
• Ministry of Infrastructure, Science and Technology
•
•
Ministry of Finance and Development Planning
• Ministry of Agriculture
Ministry of Works and Transport
• Ministry of Lands and Housing
• Ministry of Health
• Attorney General’s Chambers
• Parastatals
• Academia
• Botswana Confederation of Commerce, Industry and Manpower (BOCCIM).

The committee may establish working groups of definite duration inviting individuals of
recognized knowledge in their fields of expertise. The committee may also collaborate with
members of the public or private bodies and entities of the civil society to perform its functions.
As a focal point to the UNFCCC, the Department also serves as the secretariat of the NCCC by
providing technical and administrative support to the work of the committee.

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3.0 Analysis of Sectors in Botswana with CDM Potential

3.1 Mining Industry
Botswana is endowed with extensive variety of mineral resources amongst them diamonds,
copper-nickel, coal which resulted into mining operations and large salt and soda ash deposits
are being exploited. The diamonds currently mined at Orapa, Letlhakane, Damtshaa and
Jwaneng have been key in the rapid economic and social development of the country. See
Figure 3.1.1 below for Jwaneng diamond mine.

Figure 3.1.1 A diamond Mine in Jwaneng

In the period between 1980 and 1995, diamond exports contributed up to 70% of foreign
exchange earnings. Copper-nickel reserves have been exploited at Selibe-Phikwe since 1973
and production has been relatively constant at 49 000 tons of matte. Tati Nickel near
Francistown is also exploring copper-nickel.
Botswana is also rich in coal reserves and coal has been mined at Morupule near Palapye since
1976 and estimated to amount to 212.8 billion tons. Coal-bed methane gas has been
discovered in the northeastern part of the country, estimated by the developers at a
commercially viable quantity of 12 trillion cubic feet. Development of the gas fields has
however been slow. Extensive reserves of salt and soda ash are found at Sowa Pan; production
in 1995 was 208 and 211 thousand tons of each. Other minerals are known to occur, including
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