China’s Role in Infrastructure Development in Botswana

This research paper by the South African Institute of International Affairs examines the multifaceted role of Chinese construction firms and state-owned enterprises (SOEs) in Botswana's infrastructure sector. It analyzes the shift from government-funded aid projects to competitive public tenders, the low-cost strategies employed by Chinese firms, and the emergence of new commercial financing models for large-scale energy projects.

• Chinese construction firms in Botswana primarily operate through independent public tenders awarded by the Public Procurement and Asset Disposal Board (PPADB), rather than exclusively through Chinese government-funded projects. This is partly because Botswana is not classified as one of the least-developed countries that typically receive such aid.
• Chinese firms achieve a competitive advantage through a low-profit-margin strategy, often working with margins of 10–15% compared to the 30–50% margins typical of European or South African competitors. This is supported by a 'hands-on' management style where teams reside on or near project sites to increase efficiency and reduce costs.
• The Morupule B Power Station project represents a new commercial funding model for African infrastructure. The $1.6 billion project involves a $825 million loan arranged jointly by the Industrial and Commercial Bank of China (ICBC) and Standard Bank Group, backed by guarantees from the Botswana Ministry of Finance and Sinosure.
• Chinese engagement in Botswana's infrastructure has led to significant cost savings for the government, estimated at between one fourth and one third of project costs, by introducing competition to a sector previously dominated by South African and European firms.
• Chinese firms face significant challenges regarding the quality of work and labour relations. There are reports of substandard materials being used to save costs, and a persistent shortage of skilled local labour, which leads to the importation of Chinese staff and subsequent complaints about lack of technology transfer.
• The document identifies a diverse range of Chinese actors in Botswana, including 16 state-owned enterprises (SOEs) and 10–20 private companies run by overseas Chinese. These entities compete with each other, with private firms often offering strong competition to SOEs due to lower overheads and fewer administrative procedures.

APA

Chen, A. Y. (2009). China’s Role in Infrastructure Development in Botswana. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-44.pdf

Chicago

Chen, Anna Ying. China’s Role in Infrastructure Development in Botswana. South African Institute of International Affairs, 2009. https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-44.pdf.

Wikipedia

{{cite report |last1=Chen |first1=Anna Ying |title=China’s Role in Infrastructure Development in Botswana |publisher=South African Institute of International Affairs |date=September 2009 |url=https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-44.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{chen2009chinas, author = {Chen, Anna Ying}, title = {{China’s Role in Infrastructure Development in Botswana}}, institution = {South African Institute of International Affairs}, year = {2009}, month = sep, url = {https://saiia.org.za/wp-content/uploads/2009/10/Occasional-Paper-44.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }