By Malisema Mahloane
MASERU – Minister of natural resources Honorable Mohlomi Moleko says the Lesotho’s economy is driven largely by the mining, water and energy sectors looking in particular at the infrastructure investments created by the construction industry and for this reason, the continent should double down on Africa free continental trade agreement.
According to Hon Moleko, the continent should double down on Africa free continental trade agreement. “If we do that, we will unlock vast opportunities in infrastructure relating to telecommunications, road networks and energy. Once there is this interconnectivity we are opening a market of over 1.3 billion people.”
Despite Lesotho being small it is making a huge contribution in the continent of Africa. With South Africa and Lesotho economies being intertwined there should be a collaboration. The most migrant labourers who have helped build most of the iconic infrastructure in SA originate from Lesotho. This therefore means Lesotho plays a big role in building SA’s economy and by virtue of this, the mountain kingdom contributes to the growth of SADC region. The minister refers to the three LHWP dams Mohale, Katse, Muela delivering water to the Gauteng region assisting Africa as a clear example of Lesotho’s contribution to the continent of Africa.
Minister Moleko is convincingly proud of the economic contribution the country has achieved as far as water projects in the highlands are concerned. He says at the end of May this month SA President Cyril Ramaphosa will ensure the sod turning of LHWP Polihali and at the same time sign MoU to enable commencement of constructing other revenue promising facilities. At the sod turning event, the SA minister Goete Mantashe has been invited to be in attendance but the Minister Moleko says “it will be one condition.”
And what is the one condition? He explains “The two countries must sign a memorandum of understanding to help with regions energy crisis. Lesotho should be given the mandate to build hydro powered dams, wind farms and solar farms for transmission of electricity to SA, Lesotho will build power transmission lines. We will also during this time help ourselves build networks to provide locals with electricity. We will support LEC to do its normal work of connecting consumers to the system. All of these mean the ministry is about infrastructure we are involved in construction.”
There are actually opportunities for local companies and foreign companies to participate in this economy. It is believed the economy of Lesotho is going to grow with the target for this country being to become a net exporter of clean energy. Once it becomes that, it will get income from the sale of that electricity at the same time international companies that want to use clean energy will come and relocate to Lesotho especially South African companies. The aspiration is for this dream to happen within the next two years whilst south Africa still has its energy problems. For this to happen, the banks have to prepare for that and everybody else.
Lesotho is already ahead in various energy projects. Currently, the government is implementing 70MW solar electricity generation project at Ha-Ramarothole in Mafeteng. Phase I which is 30MW of the project shall be completed by June this year moreover it will be fully commissioned. Phase II which is 40MW will be implemented immediately upon successful completion of Phase I. it is anticipated phase II will be completed in 2030. Also under construction is 20MW is being built by a company called OnePower.
Phase I of the project is financed by a soft loan from EXIM Bank of China with total contribution of USD 70.188 million. Lesotho government contribution to this project is estimated at M220 million which will cover the costs of land compensations valued around M57 million, tax obligations as well as operating costs of Lesotho Electricity Generation Company (LEGCO).
Through Phase I of the project a 30MW solar generation facility will be installed, 132 kV electricity sub-station will be erected and 55km transmission line will be developed transmitting electricity from Ha-Ramarothole to Mazenod or Ha Mofoka where the electricity will be integrated into the national grid for distribution.
There are ongoing negotiations carried out by minister Moleko requesting Lesotho to store the power at Ha-Ramarothole. Once the negotiations are made and the agreements are signed, the country’s power will be sufficient enough to sustain its energy needs.
This solar electricity generation project is one of the projects under the forum for China-Africa corporation (FOCAC) and offers an opportunity to highlight how solar energy can be used to deliver reliable access to affordable electricity using modern renewable energy sources. A Chinese based contractor SINOMA-TBEA consortium has been engaged to construct the 30MW solar project. It is under the direct supervision of Lesotho electricity generation company (LEGCO)
For the mining sector there are a number of exploration licenses that have expired and for this reason a mining will be need to be organized inviting international experts to explore what minerals there are in this country. With the mines contributing the largest taxes in the economy, it is imperative to research what other minerals can bring the country income for government to enjoy tax revenues.