European Union

Economic diversification efforts in Selebi Phikwe get a shot in the arm

The Head of Delegation of the European Union to Botswana Ambassador Paul Malin and the Permanent Secretary in the Ministry of Finance and Development Planning Mr Solomon Sekwakwa today (21/1/2011) signed a Memorandum of Understanding for the use of approximately P640 million from the Sysmin Re-Employment Account (REA) to foster economic diversification in the region of Selebi Phikwe. The funds, which are held by Government will be disbursed as part of the national budget.

Recalling the EU's continuing attachment to Selebi Phikwe, the outgoing Head of the EU Delegation of the European Union to Botswana, Ambassador Paul Malin declared that "we made it a point with the Permanent Secretary to sign this agreement before I leave Botswana to ensure the long-term support for economic diversification".

The Government has identified a number of priority projects which could be funded under the REA: the Selebi Phikwe Technical College, the Botswana Mining Museum and Research Centre (BOMMERC), an Acid Capture Plant, tourism infrastructure at Letsibogo Dam and a packaging house and processing plant for horticulture produce. The SPEDU Regional Development Agency, as the main driver of the economic diversification process in Selebi Phikwe and its region, will also benefit from the fund. Other significant projects may be considered depending on the results of feasibility studies.

The EU is interested in the possibility to use the funds to reduce BCL smelter's emissions as it believes that addressing the pollution problem in Selebi Phikwe is a condition sine qua non for the successful diversification of the economy in areas such as tourism, business and agriculture. The European Investment Bank has shown interest in an Acid Capture Plant, should this prove feasible, with the possibility of providing additional grant and loan resources for this purpose.

Ambassador Malin highlighted that "the Sysmin interventions are among the most successful EU projects in Botswana as they have proven essential for the continuance of BCL mining operations since the early 1990s, and consequently, to the employment and overall economic development of Selebi Phikwe". EU support helped keep the mines open at a time of low prices. Copper has this month hit record price levels. The Head of Delegation recalled BCL General Manager's earlier statement that "the people of Selebi Phikwe should be forever grateful for the life the EU has given to BCL and the town of Selebi Phikwe. Without EU support, the BCL Mine could have closed”.

Not only have the Sysmin interventions produced some direct significant social and economic benefits to the communities in and around Selebi Phikwe, but BCL and Tati repayments deposited in the REA are now expected to boost economic diversification efforts in the region of Selebi Phikwe.

Ambassador Malin said: "As I move to new challenges in the region, it is my sincere hope and belief that we are here today at a major milestone in making the economic diversification of Selebi Phikwe a reality by providing funding to achieve some of the goals set at the National Conference on Economic Diversification for the region of Selebi Phikwe region last year". He however cautioned that some projects may take time to materialise given their magnitude, while encouraging Government and SPEDU to work hard for the good of the people of the region of Selebi Phikwe.

The Sysmin Re-Employment Account was created in 1991 and acted as the depositary of repayments of capital and interest by BCL and Tati for the preferential loans provided under the three Sysmin interventions funded by the EU for a total of about 84 million euros (or 750 million Pula at current exchange rate). BCL made its last repayment of 100 million Pula to the REA last month. The EU Sysmin facility, which has now come to an end, targeted countries that had a considerable dependency on their mining industries.

For more information please contact:

Bester GABOTLALE
Delegation of the European Union to Botswana and SADC
Phone: +267 391 44 55
bester-baboni.gabotlale@ec.europa.eu
http://eeas.europa.eu/delegations/botswana/