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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 Works and Transport • Ministry of Agriculture

• 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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gold, manganese and semiprecious stones, but are not mined in significant quantities. Crushed stone, sand and clay are quarried for construction purposes; the level of production depends on the extent of the building industry.

Botswana’s extensive mining industry uses huge amounts of energy and which calls for energy efficiency strategies. It is in this light mining industry offers an opportunity for CDM development in the area of energy efficiency. Furthermore the coal-bed methane from the coal reserves will also offer low carbon options where coal used for generation of electricity can be displaced by coal bed methane. Initiatives to explore coal bed methane as an energy source has taken place across Botswana however to date nothing has developed into sustainable full scale project. It can thus be deduced that the mining sector if explored is one of the great area to develop CDM projects or other nationally appropriate mitigation actions in Botswana.

3.2 Energy

Botswana’s energy demand is increasing in response to a growing population, mining, manufacturing of commodities and industrial products as well as social development characterizing a rapidly growing economy. Energy demand is projected to continue to increase especially for the commerce and transport sector.

3.2.1 Fossil Fuel

Botswana’s energy supply is mainly fossil based. Botswana Power Corporation (BPC), a parastatal and statutory corporation mandated to generate and supply electricity in Botswana uses coal mined at Morupule to generate electricity at the Morupule power station with the initially installed capacity of 132 MW. This local source of electricity supplied less than 15% on the national electricity needs while the remaining more than 85% was imported from the Southern African Power Pool (BPC annual report 2010).

The challenge of diminishing energy supply in Southern Africa has forced Botswana to expand its power generation at Morupule power station by installing 4X150MW units. The power station is expected to be complete in February 2013. Figure 3.2.1 shows a picture of Morupule expansion project.

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Figure 3.2.1 Morupule Station expansion Project The energy sector, particularly the electricity and petroleum, contribute significantly to the national GDP and national employment therefore a key component of the national economy. Botswana Ash generates 20 MW for its own use. In the rest of the country diesel generators are estimated to supply over 20 MW of energy to villages, rural schools, hospitals, police stations and prisons. Botswana’s rural domestic energy supply profile is similar to SADC countries dominated by fuel wood. The fuel wood is mainly collected by hand and therefore poses a challenge of local scarcity and depletion. However, at national scale, the supply due to tree growth is greater than the harvest. Fuel-wood is used in the residential sector, government institutions and in small to medium commercial enterprises, especially in rural areas. Liquid petroleum gas (LPG) is steadily becoming widely used in the low-income households because of convenience and localized fuel wood scarcity. Medium and high-income households use electricity and LPG.

The transport sector consumes its fair share of fossil fuel and is the major green house gas emitter. It is the main consumer of petrol and diesel, taking up a combined total of 435 million liters of petrol and diesel in 1994. Nearly 100% of the petrol, diesel and paraffin fuel marketed in Botswana is imported by the five multi-national oil companies (Puma, Shell, Caltex, Total and Engen) mainly from South Africa.

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3.2.2 Renewable Energy

Despite the all year round abundance of solar in Botswana, renewable energy is still not exhausted optimally. Solar photovoltaic and wind-generated electricity contribute just a fraction of one percent to the total energy supply, but occupy an important niche in satisfying needs in remote areas. The national energy policy promotes the use of these renewable energy methods. Solar and photovoltaic technologies are mostly used in schools for lighting, in rural street lighting and in some homes and government buildings for water heating. Figure 3.2.2 shows a picture of initiative by BPC-Lesedi to provide the village with lighting and basic electric usage to Sekhutlane village in the Southern District. The plant used solar energy to power the batteries and at the time a biogas plant was being constructed to use animal waste from farms for hybrid power generation.

Figure 3.2.2 Sekhutlane Hybrid Power Plant, November 2012 In addition to the abundant sunshine, Botswana also has abundance of cattle hence readily available cattle manure (dung) for biogas production. At the moment almost all of this dung is left undisturbed and slowly releases methane gas (CH4) into the atmosphere. This biogas if captured and utilized is an energy resource. Not only is biogas from cow-dung an important energy source but also its capture has several other environmental advantages such emission avoidance of the potent methane, carbon dioxide (CO2), reduction of emissions of particulate matter and nitrous oxides into the atmosphere and hygienisation of slurry. Figure 3.2.3 shows

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biogas plant installed at the multi-species abattoir in Gaborone which is undergoing procedures for CDM development.

Figure 3.2.3 A biogas Plant at the Multi-Species Abattoir in Gaborone

With the above overview of the energy sector, it can be noted that Botswana’s heavy reliance on coal and her marginally explored renewable energy result in the highest grid emission factor in Southern Africa (The Case Study of SAPP, 2011). This potentially presents good investment opportunities for CDM projects in the areas of renewable energy and energy efficiency.

Botswana in its quest to promote renewable energy and private sector participation is in the process of implementing the ‘Renewable Energy Feed in Tariffs’ which will give investors return on investment when investing in power generation using renewable energy technologies.

3.3 Agriculture

More than 50% of the population lives in rural areas and is largely dependent on subsistence crop and livestock farming. Agriculture forms the economic income for rural life and therefore contributes a very small amount of 1.6% GDP primarily through beef exports. Crop production is hampered by climate conditions like recurrent drought, highly variable and unreliable rainfall hence most vulnerable to climate change. Traditional farming methods, erosion, and diseases also worsen the situation. Most of the land under cultivation is limited to the eastern region. The principal crops grown are sorghum, maize, and millet and pulses. In 2004 sorghum and maize production were 32,000 tons and 10,000 tons, respectively.

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Cattle rearing is extensively practiced in Botswana with total cattle population varies between 2-3million. (CSO, 2004) The cattle slaughter houses owned by Botswana Meat Commission slaughter cattle for export to meet international demand. However, the beef industry has been facing a decline. None the less the national herd together with other livestock like goats and poultry also provides substantial waste to produce methane together with the waste water from the abattoirs which are a niche for CDM opportunities in methane (CH4) generation for energy and avoidance.

3.4 Waste

Although the population of Botswana is small, waste management for such a growing economy still requires urgent attention. The waste regulating body is the Department of Waste Management and Air pollution Control (DWMP) through policies and regulations. The solid waste collection and disposal into the 14 landfills across the country and dumpsites is managed by the local municipalities. Most of these landfills do not have either a landfill gas collection system or gas flaring equipment. The main greenhouse gasses produced from the landfills are methane and carbon dioxide. Despite the quantity, Botswana waste could be turned into an economic resource through improved waste management strategies and implementation of CDM bundle of projects or programme of activities (PoA) for methane capture, flaring and generation of electricity.

4.0 Sources of GHG emissions

Botswana’s greenhouse gases emissions sum up to 5% of Africa’s 3.8% of global emission. Sectors contributing to GHG emissions include energy, agriculture, waste land-use change and Forestry. Botswana’s GHG emission was 7,362Gg CO2eq in 2000 and removal was 42,941 Gg CO2eq. The net emission after accounting for the removal was -35,779 Gg CO2eq, thus indicating that Botswana was a net sink in 2000. The distribution of greenhouse gas emissions by gases in 2000 indicates that carbon dioxide is the major greenhouse gas constituting 98.3% and methane only 1.7% of the greenhouse gases. The table 4.0.1 shows Botswana’s total GHG emissions inventory for the year 2000 presented by sector categorized according to their percentage share in the national total emissions. Energy sector is the largest emitter of carbon dioxide in the country contributing to a total of 5,537 Gg CO2 eq in the year 2000.

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Table 4.0.1 GHG emissions by sector for the year 2000 Sectors CO2 eq (Gg) Share of sector in

total emissions (%)

Energy 5,537.923 74.5

Agriculture 1785.000 24.0

Waste 111.300 1.5

Total emissions 7434.223 100

Land-use Change and Forestry -42,941

Total -35506.777

A further analysis of GHG emissions obtained by sector for energy purposes was made and illustrated in Figure 4.0.1 below. Emissions from residential were the highest at 2447 Gg CO2 (46%) followed by emissions from industry (37%), Transport was the third with (9%) government with 7% and Agriculture with 1%. (Botswana Initial National Communication, 2001)

Figure 4.0.1 Major sources of Carbon dioxide for energy supply

The country’s greenhouse emissions are mainly 52% carbon dioxide, 33% methane and 16% nitrous oxide and the sum is equivalent to about 0.02% of the global anthropogenic emission (IPCC, 1995). According to the 1994 GHG inventory agriculture contributes 57%, electrical

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power generation 17%, mining and industry10%, transport 8%, domestic heating and cooking 3% and government 1%.

5.0. Current State of CDM project development in Botswana

In the year 2011 the DNA conducted two CDM national workshops to raise awareness on CDM amongst stakeholders. The response has been significant as project proponents have developed interest and developed project proposals. Currently ten Project Idea Notes (PINs) have been submitted to the DNA office. Table 5.0.1 presents a summary of the PIN and Programme of Activities Design Documents (PoA-DDs) portfolio. Most of the potential CDM project proponents who have approached the DNA with project ideas have largely come from the private sector (industry, mining companies, and individuals), NGOs and the electricity utility and only two initiatives are from government departments. Internationaly-based and regionally- based project proponents have also taken interest to include Botswana in their multi-country Programme of Activities (PoAs) for possible CDM development in the future.

Table 5.0.1. Status of CDM project activities in Botswana as of November 2012 SECTOR Project Title tCO2/year Applicable CDM approved

methodologies Project Status

ENERGY

PoA- Biomass burning energy efficient cooking technologies in households, institutions and small businesses in Botswana.

50000 AMSIIG & AM0094 for cook stoves PIN developed

Botswana Wind Energy Project: 50 large wind turbines producing 100 MW of power for Botswana.

228000 ACM0002Consolidated Methodology for Grid-Connected Electricity Generation from Renewable Sources

PIN developed

Efficient Cool Buildings Programme in Botswana. Application of ceratech coating to building roof surfaces

11000

AMSIIE-EE/Fuel switching (FS) in various buildings; AMSIIF on Agric bldgs;AM0091 EE/FS in new buildings

PIN developed PoA-DD & CPA developed. LoA issued

200 MW Up-draught Solar Power Station (Botswana)

788 400 ACM 0002 -Consolidated Methodology for Grid-Connected Electricity Generation from Renewable Sources

PIN developed

WASTE SECTOR

1 MW power generation from biogas from animal waste obtained from multi-species Abbatoir

28000 AMSIIID; AMSIIIAO;AM0075 PoA-DD & CPA developed. EIA under way

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SECTOR WASTE SECTOR

Project Title tCO2/year Applicable CDM approved methodologies

Project Status

Biogas Project at Botswana’s slaughter houses

78505 ACM0010;AMSIIID; AMSIIIAO;AM0075

PIN developed. The project could be one of the CPAs

A biogas plant in a village for cooking and lighting purposes

600 AMSIIID; AM0075; AMSIIIAO PIN developed. The project could be one of the CPAs

MULTI-COUNTRY PROJECT ACTIVITIES

ENERGY EFFICIENCY

Installation of efficient lighting technologies in commercial building

To be determined during CPA stage

AMS II.C./Version 13 PoA-DD LoA issued

High efficiency biomass cook-stoves involving the efficiency improvements in the thermal applications of non-renewable biomass

To be determined during CPA stage

AMSIIG for cook-stoves

PoA-DD LoA issued

RENEWABLE ENERGY

Replacement of Kerosene/other fossil based fuel with solar LED lighting for domestic use

To be determined during CPA stage

AMS II.AR PoA-DD Requested LoA

Fuel switching in thermal production from fossil fuel to renewable biomass source

To be determined during CPA stage

AMS-I.C PoA-DD Requested LoA but rejected due to concept of 1st CPA to be applied in Botswana

Grid connected renewable energy generation

To be determined during CPA stage

ACM0002 PoA-DD LoA issued

Installation of solar photovoltaic panels for production of electricity in residential and light industrial use.

To be determined during CPA stage

AMS I.F/Version 2 PoA-DD LoA issued

Use of solar energy to provide thermal energy

To be determined during CPA stage

AMS I.C/Version 18 PoA-DD LoA issued

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6.0 CDM Project Approval Procedure

A set transparent procedure for issuing a Letter of Approval (LoA) to CDM projects is paramount to the success of project registration with the CDM Executive Board. A Project Design Document (PDD) submitted to the DNA secretariat prior to forwarding to CDM Executive Board will undergo the following process to check for compliance with national sustainable development criteria. The process is stipulated below:

6.1 Project Idea Note (PIN)

Submission of the PIN is optional but it is helpful as it notifies the DNA about the potential CDM project and it assists the project proponent to have a preliminary overview of project analysis and get initial general feedback from the DNA on the project.

(I) The project proponent submits the PIN to the DNA secretariat (II) The DNA does a completeness check using a documentation checklist (section 6.3) (III) If the preliminary screening of the project proponent is satisfactory, a Letter of No

Objection (LoNO) is issued within two weeks (IV) Project may proceed to PDD development

NB: The letter of no objection is by no means an approval project letter as a full evaluation of the project by the NCCC will still need to be carried out upon submission of the PDD.

6.2 Project Design Document (PDD)

(V) The project proponent submits the PDD to the DNA secretariat (VI) The DNA checks for compliance with the checklist (refer to 6.3 for details) (VII) A letter of acknowledgement is issued within one week if all requirements are met (VIII) The proposal is sent for review by the NCCC. The Committee convenes and assesses

the project within six weeks. If the PDD and all documentation are in order and the proposed project meets Botswana sustainable development criteria the NCCC gives a recommendation to the DNA.

(IX) The DNA issues a letter of approval within a week of receipt of NCCC recommendation.

(X) Otherwise if the project does not meet the sustainable development criteria a rejection along with reasons are given. Project proponents may resubmit upon meeting recommended requirements.

Table 6.2.1 below shows CDM project cycle for both stand-alone projects and PoAs.

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Figure 6.2.1: Project Cycle for CDM stand-alone projects and PoA in Botswana

Steps CDM Project Developer

CME/PP (PoA)

DNA DOE CDM EB

1 PIN (optional) Formal Letter requesting LoNO

PIN (optional) Formal Letter requesting LoNO

Initial Check. LoNO issued in 2weeks

2 PDD PoA-DD, generic CPA-DD, Real CPA-DD

Letter from DEA informing about EIA, Agreement or authorization from local authority/utility, Formal Letter requesting approval

Letter from DEA informing about EIA, Agreement or authorization from local authority/utility, Formal Letter requesting approval. For multi-country PoAs: If 1st CPA is not in Botswana, Letter of Intent by local entity proving partnership is requirement

Documentation check -adherence to 6.3 checklist. Issuance of acknowledgement letter within 1 week

3 NCCC convenes, reviews project, and gives recommendation to DNA within 6 weeks. LoA granted in 1week

4 Validation (DOE 1)

5 Registration of CDM PDD or PoA-DD & CPA-DD

6 Monitoring (Report)

Monitoring (Report)

Inclusion of new CPAs. Inform DNA

7 Verification (DOE 2)

8 Issuance of CERs

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6.3 CDM Project Checklist for Documentation Submission to DNA

For all CDM Projects in Botswana the following documents must be submitted to the DNA secretariat at the Department of Meteorological Services under the Ministry of Environment, Wildlife and Tourism before any final evaluation of the CDM project or PoA can be carried out.

________ A formal letter to Botswana DNA requesting host country approval and providing contact information for the project developer.

________ A Project Design Document (PDD) in English, including electronic versions. The PDD should be based on the most recent PDD template can be accessed at http://cdm.unfccc.int. The PDD should also use one of the baseline and monitoring methodologies that have already been approved by the CDM Methodology Panel. These methodologies can be accessed at: http://cdm.unfccc.int/methodologies/PAmethodologies

________ For Programme of Activities (PoA): a PoA-DD, generic CPA-DD, real CPA-DD, all in English, including electronic versions are required. The documents should be based on the most recent template can be accessed at http://cdm.unfccc.int.

________ A letter of intent from a local partner committing to implement the programme in Botswana if the PoA’s 1st CPA is outside Botswana.

________ A letter from Department of Environmental Affairs stating whether an Environmental Impact Assessment (EIA) is required. This depends on the project type. If an EIA is needed, the letter of approval will be conditional of the outcome of the EIA. For EIA contact: Department of Environmental Affairs, P.O. Box 0068, Gaborone, Botswana. Phone: +267 3902050, Fax: +267 3902051

________ If required, a letter of support /Agreement/authorization from the municipality or local

authority/utility/ institution.

________ Any documents or information requested in the “Letter of No Objection” issued by the DNA in response to the PIN.

________ A validation (or pre-validation) report in English if already done.

The DNA will only issue a Letter of Approval to the project developer upon submission of the above documents with consideration of recommendation made by the NCCC. Application and documents should be submitted to the following address:

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The Director, Department of Meteorological Services, P. O. Box 10100, Gaborone. Plot No. 54216 Corner Maaloso-Metsimotlhaba Rd. Village, Gaborone, Botswana. Phone: +267 3612200, Fax +267 3956282.

7.0 Botswana’s Sustainable Development Criteria

The objective of CDM is to assist developing countries achieve sustainable development while developed countries meet their obligation under the Kyoto Protocol through investment in developing countries. The second objective is to assist participating countries access CDM carbon market. Botswana encourages investment under Kyoto Protocol’s flexible mechanisms for new and existing infrastructure that result in less carbon emissions to help achieve sustainable development.

Specific CDM Project Requirements The primary legal criteria for CDM Projects under the Kyoto Protocol are:

a. That the project assists the Host Country to achieve sustainable development; b. That the project provides real, measurable, and long-term benefits related to the

mitigation of climate change; and c. That the project delivers reductions in emissions that are additional to any that would

occur in the absence of the certified project activity. Sustainable Development Criteria:

All CDM project proposals are expected to address the following criteria:

a. General Criteria: The project should:

• be consistent with the national priorities, laws and regulations and sustainable development policies and other relevant policies and plans

• be based upon the principle of voluntary participation

b. Environmental Criteria: The project should:

• result in significant reduction of the emissions of Greenhouse Gases

• contribute to conserve local resources and improve local environment

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c. Social Criteria: The project should:

• result in poverty alleviation

• result in creation of new jobs

• result in creation of new economic activities

• have positive impacts on local communities

• improve equity

• take gender concerns into consideration and

• ensure stakeholder participation in the development of the project

d. Economic Criteria: The project should:

• contribute to improvement of Foreign Direct Investment

• be cost effective

• apply innovative, locally manageable technology

• result in technology and know-how transfer

The above approval procedures and sustainable criteria can also be accessed from website at http://botswana.acp-cd4cdm.org

8.0 New Market Mechanisms

The role of CDM has changed globally due to low demand for CERs in the carbon markets. EU has decided that new non-LDC projects that are not registered by the end of 2012 will not be eligible for inclusion in the EU ETS. This 2012 deadline makes future sustainability of CDM a challenge and exacerbates uncertainty for CERs generated from non-LDCs like Botswana. As a way forward there is an increased drive towards new market-based mechanism which will be governed by international rules, maintain environmental integrity and possess local content and implementation. One of these new market mechanisms being negotiated and taking shape is the Nationally Appropriate Mitigation Actions (NAMAs) and Monitoring Reporting Verification (MRV) architecture. The NAMAs allow developing countries to make voluntary submissions of information on their mitigation actions to the NAMA registry and source support from developed countries to prepare and implement the NAMAs. While Botswana is currently in the process of implementing CDM, the country is similarly keen to take advantage of opportunities presented by NAMAs. Project ideas in the pipeline could be

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explored further and submitted in the NAMA registry for NAMA preparation. Potential sectors for NAMAs in Botswana are energy, waste, and mining and policy development which could all be synergized with national developmental goals for their success. The emerging new market mechanisms call for awareness, capacity building at institutional level and for potential proponents in order for Botswana to fully benefit from the mechanisms.

9.0 Conclusion

The information relayed in this CDM investor guide clearly illustrates that mitigating climate change through clean development mechanism by implementing greenhouse gas emission reducing projects not only fight climate change but also has benefits for all project participants and Botswana. The benefits range from environmental through greenhouse gas abatement, social through creation of jobs, technology transfer and knowledge and new revenue generated from sale of the CERs. An enabling environment in the form of institutional structure has been set up to support CDM development in the country. Transparency by making public and adherence to developed approval procedures has been key factor for DNA operations. Additional supportive environments like the official policy of zero tolerance for corruption curbs corruption in Botswana. According to Transparency International (TI) Corruption Perception Index (CPI) in Berlin, Botswana is the least corrupt country in Africa, as well as among the least corrupt countries in the world. Additional facts such fifty years of stable democracy, fast growing economy and no limit to foreign exchange controls makes the country attractive to investment.

Continual strengthening of the DNA by participation at both regional and international forums is identified as a way to build capacity at local level which will in turn improve carbon reducing projects implementation in the country. Over the years there had been little awareness on CDM and climate change mitigation projects therefore regular stakeholder awareness workshops on processes and procedures, new mechanisms and climate change in general are regularly conducted to tap into existing opportunities in the countries.

It can thus be summed up that Botswana offers an opportunity for CDM and possibly a lucrative destination for investment for new market mechanisms particularly in the energy sector using renewable energy such as solar, wind and biofuels to offset carbon generated from fossil fuels. Energy efficiency for industrial sector and households also presents quick cost effective accesses to the carbon market. Waste offers another area to explore for methane capture.

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10.0 References

Meteorological Services, Republic of Botswana

Botswana Environment Statistics, Central Statistics Office 2008

Statistics Botswana, National Accounts Statistics – Gross Domestic Product: Fourth Quarter &

Annual 2011 Stats Brief)

Botswana Initial National Communication 2001

Botswana’s Initial National Communication to the United Nations Framework Convention on

Climate Change, 2001

Botswana’s Second National Communication 2011

Central Statistics Office (CSO), 2000. Botswana Environment Statistics. Ministry of Finance and

Development Planning, Botswana.

Central Statistical Office (CSO), 2004. Botswana Agricultural Census Report 2004. Ministry of Finance and Development Planning, Botswana.

Central Statistical Office (CSO), 2004. 2001 Population and Housing Census. Ministry of Finance

and Development Planning, Botswana

Botswana Review of Commerce and Industry 28th edition 2009, BEDIA

Analysis of Grid Emission Factors for the Electricity Sector in Sub-Saharan Africa- The Case Study on the Southern African Power Pool Report Proposal, 2011

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11.0 Annexes

11.1 List of Institutions and organizations involved in CDM activities in Botswana

11.1.1 Contacts of CDM project proponents and investors:

Name of organization/

company

Project Type

Contact of Project Proponent

Bostrich Power generation using biogas Mr. Rapula Carl De Bruyn Tel: +267 3924057 Fax: +267 3918120 veridebt@opqnet.net bostrich2@gmail.com

Agna Ventures Energy efficiency in buildings Mr. Percy Lekoba +267 3187914/72240621 percyl@botsnet.bw

Biosys Bio fuel station at BMC Mr. Simon Mahosi Mobile: +267 72474730 simonmahosi@yahoo.com

Wind Edge Botswana Renewable energy: Wind Power

Dr. Wayne Edge Tel: +267 76187764 wayneaedge@yahoo.com

Department of Energy Affairs (DoE)

Power generation using biogas at Mabesekwa

Ms. Mareledi Gina Maswabi Tel: +267 3914221/ 3640204 mgmaswabi@gov.bw

BPC Lesedi (Pty) Ltd Renewable energy: Solar home systems, solar water heaters Energy efficiency: cook-stoves

Mr. Walter Kgabung Tel: +267 3911299 Fax:+267 3911300 Email: wmkgabung@bpclesedi.co.bw

Power Tower Renewable energy: Electricity generation using solar

Mr. Jack Thipe +267 3105240/73278548 jackthipe@nbc.co.bw

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11.1.2 Government Departments:

Name of Department

Type of Information

Contact of Person

Department of Meteorological Services

DNA focal point, DNA secretariat, Climate change secretariat

Acting Director: Mr. Thabang L. Botshoma P.O. Box 10100 Gaborone Botswana Physical Address: Plot No. 54216 Corner Maaloso and Metsi Motlhaba Road Tel: +267 361 2271/2 Fax: +267 395 6282 Email: tbotshoma@gov.bw or meteo@gov.bw

Department of Environmental Affairs

EIA approval Acting Director: Mrs. Portia Segomelo P.O. Box 0068 Gaborone Botswana Tel: +267 390 2050 Fax: +267 390 2051 Email: psegomelo@gov.bw

Department of Energy Affairs

Energy projects Director: Mr. Kenneth Kerekang P/Bag 00378 Gaborone Botswana Tel: +267 364 0200 Fax: +267 391 4201 Email : kkerekang@gov.bw

Department of Waste Management and Pollution Control

Waste management Authority Director: Mr. J. Opelo P/Bag BO323 Bontleng Gaborone Botswana Tel: +267 393 4479 / 391 1802 Fax: +267 393 4486 / 390 9953 Email : jopelo@gov.bw

Gaborone City Council Municipality Town Clerk: P/Bag 0089 Gaborone Botswana Tel: +267 365 7400 Fax: +267 390 0141

Botswana Power Corporation

Power Utility CEO: P.O. Box 48 Gaborone Botswana Tel: +267 360 3000 Fax: +267 397 35663

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11.1.3 Contacts of CDM Advisors in Botswana

Company/Consultant name

Contact person

Contact details

Local companies

Energy, Environment, Computer and Geophysical Applications (EECG)

Dr. Peter Zhou Plot 51571 Letleretlere Close P. O. Box 402339 Gaborone, Botswana Tel: (+267) 3910127 Fax: (+267) 3910127 Mobile: (+267) 7169 3104 Email: pzhou@global.bw

Africa Carbon Exchange Mr. David Lesolle Ms. Sharon Kockott

Postal address: P. O. Box 882 Gaborone, Botswana Tel: (+267) 392 2844 Fax: (+267) 391 4230 Mobile: (+267) 7285 7121 Email: rralekgotla@yahoo.co.uk Postal address: P. O. Box 882 Gaborone Tel: (+267) 318 4641 Mobile (+267) 7471 6364 Email: Kockott@botsnet.bw

Stenstenbeck Ltd (Botswana) Dr. Sten Stenbeck Postal address: P.O. Box AC 35, ACH Riverwalk Gaborone, Botswana Phone (Botswana):(+267) 744 35 159 Phone (Sweden): (+46) (0)8 559 255 31 Skype: sten.stenbeck Email: mail@stenstenbeck.se Website: www.stenbeck.se

KPMG Nigel Dixon-Warren

Tel: (+267) 3912400 Fax: (+267) 3975281 Mobile: (+267) 7130 7398 Email: nigel.dixonwarren@kpmg.bw

Aspect Consulting Brian O’Connell Plot No. 17832, BBS Mall Postal Address: P. O. Box 202405 Gaborone, Botswana Mobile: (+267) 7518 6195 Email: brian@aspectconsulting.eu

Regional companies

Rural Area Power Solutions Consulting (Pty) Ltd

Dr. Douglas Banks

1st Floor, Elta House 3 Caledonian Street, Mowbray, Cape Town Mail: Suite 166 Private Bag X18 Rodensbosch 7701 South Africa Tel: +27 21 686 0024 Fax: +27 21 689 8871

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Mobile: +27 82 449 1469 Email: doug@rapsconsulting.co.za

Sustainable Transactions cc Dr. Rob Short Sustainable Transactions. Environmental Management, Sustainable Energy and Climate Change Advisors Tel: +27 11 486 3220 Cell: +27 82 454 2193 Email: rob.short@sustainabletransactions.co.za

Advise – South Africa Ltd

Dr. Ad. Dankers 9 Blackpool Road, Bryanston P. O. Box 785202 Sandton 2146 Johannesburg South Africa Tel: +27 11 4633 461 Fax: +27 11 4633 461 Mobile: +27 72 1755 030 Email advise-sa@planet.nl

Marbek Resource Consultants Ltd

Geoff Stiles P. O. Box 898 Parklands 2121 Johannesburg South Africa Tel: +27 11 447 7879 Fax: +27 11 447 7885 Mobile: +27 82 347 0032 Email: Geoff@cbla.org.za