By: Thandiwe Kubere
Continuing in its effort to accomplish the mission of regulating electricity, urban water and sewerage services in the interests of all stakeholders and support their growing and ever-changing needs, LEWA presented its annual report, noting improvements as well as challenges met in the line service.
The Annual Report, which is an annual implementing tool of the Strategic Plan, details the Lesotho Electricity and Water Authority’s (LEWA) performance in fulfilling its mandate of regulating the Electricity Supply Industry (ESI), and the Urban Water and Sewerage Services (UWSS) subsector.
In his statement, LEWA Board Chairperson Makotoko Makotoko declared the Authority made extraordinary progress this financial year. “We were able to, inter alia, determine LEC’s tariffs for the Financial Year 2022/23; approve LEWA budget of M66.3 million and a UAF Budget of M21.8 Million; approve funding amounting to M31.3 million for projects; issue several licence exemptions and grant an extension of a conditional generation licence to NEO 1 (Pty) Ltd”, he said.
He noted that the financial year 2022/23 presented a concoction of good and bad for the world’s economy and thus changing geo-political landscape with consequential effects thereto, including, amongst other things, energy price shocks and their impact on inflation due to Russia – Ukraine War, realities of climate change and the on-going load-shedding in South Africa. “Lesotho, as part of the global village has felt and continues to feel the effects of those occurrences. The impact is severe and felt everywhere, including in the Boardrooms”, he said.
He declared that LEWA Board dealt with some harsh realities such as increasing unemployment rate in the country and ever increasing cost of living. These require continued regulatory interventions such as retaining pro-poor pricing methods. In the circumstances, the Authority approved a tariff increase of 7.8579% across all customer categories and a Revenue Requirement of M1.128 billion for LEC in the Financial Year 2022/23. In making a final decision, the Authority was mindful of the country’s economic climate, customer affordability, and sustainability of the regulated entity.
Increasing access to achieve the 7th Sustainable Development Goals and making the Energy Policy 2015-2025 a reality has also been part of the agenda in the reporting period. “The Universal Access Fund (UAF) played a role in connecting about 5,000 households and is hoped to be more helpful in benefitting the citizenry”, he revealed. The challenge facing the Board is finding ways of increasing the number of connections at low costs so that the little financial resources that are available can be used to cover more households.
He noted the Authority appreciates the role played by the private sector in the energy sector. Marking history of separate regulation, licences have been issued to the private sector where a conditional licence has been issued to NEO 1 (Pty) Ltd for a 20 MW Solar plant in Mafeteng. Another private sector participant, Sotho Minigrid SPV (Pty) Ltd has been granted licence exemptions to develop and manage off-grid solar systems in ten (10) rural and remote areas of the country. Sotho Minigrid SPV (Pty) Ltd was also granted a licence exemption to develop and manage a mini grid project at Ha Raliemere, which was a CSR initiative. At the time of reporting, the Authority was seized with another generation application made by LEGCO for a 30 MW solar plant at Ha Ramarothole.
LEWA Chief Executive Motlatsi Ramafole enlightened that in the reporting period, the Authority executed several stakeholder engagement programmes and initiatives to build new and sustain established relationships. During these engagements, several topical issues such as the LEWA mandate; tariff review process; the importance of stakeholders’ participation in the LEWA’s activities; the Quality of Service and Supply Standards formed part of the agenda to create awareness and build on an understanding of LEWA’s duties and functions.
He further noted that as per LEWA’s objective to ensure the security of Electricity Supply, Lesotho’s installed capacity for electricity generation stood at 74.7 MW comprising ‘Muela (72 MW), Mantšonyane (2 MW), Semonkong (0.4 MW) and Moshoeshoe 1 International Airport (0.28 MW). On that note, the security of supply was compromised by a breakdown of one of the generating units at ‘Muela Hydropower Plant (MHP) resulting in reduced electricity generation. This led to the increased bulk supply costs as a result of more imports from South Africa and Mozambique.
Moreover, the Authority investigated the cause of a major unplanned power outage due to the tripping of the 132/33kV transformers at Mabote substation, which affected the central and northern parts of Maseru. It was established that the cause of the unplanned power outage was an earth fault on the 33kV Maseru Central feeder at Mabote substation. Government of Lesotho in its endeavours to enhance security of electricity supply, embarked on the development of a 30 MW solar PV plant at Ha Ramarothole in Mafeteng. To this end, the Authority received an application for a generation licence from LEGCO for the project.
“The LEGCO and NEO 1 solar plant facilities will co-exist at Ha Ramarothole. Once completed, the 30 MW generation output will add significantly to the current installed capacity of 74.7 MW electricity generation, resulting in 104.7 MW domestic capacity fed into the national grid. This will go a long way in improving security of supply”, he said.
The Ha Ramarothole initiative is a response to the Energy Policy 2015-2025, which promotes use of clean energy sources for electricity generation. It was assured to also mark another milestone in the Renewable Energy space where the country will be making considerable strides in promoting clean energy. As a measure to improve security of supply, the Authority kicked off development of the Lesotho Distribution Grid Code whose objective is to promote sound planning, operational and connection standards to provide for reliable, secure, economic and coordinated operation of the Distribution network.
To Increase Access to Electricity In terms of the LEA Act, as amended and the Universal Access Fund (UAF) Rules of 2011, the Authority administers UAF for facilitation of the development and expansion of electricity service infrastructure in areas where there are no such services and to provide electricity to a larger number of people. In doing so, a budget amounting to M21.8 million was approved for electrification projects in the Financial Year 2022/23. An amount of M31.3 million was approved by the Board to fund the Malealea electrification project in Mafeteng. Savings made in the 2021/22 Financial Year were re-allocated to cover the shortfall on the project cost.
However, there were projects in progress from the previous Financial Year that continued to be paid in the reporting period. In this regard, partial payment of M30.3 million was effected to electrify 5,000 households in projects that were not completed in the previous Financial Year and the Malealea project. At the end of the reporting period, M35.7 million was committed for all projects that were not completed to date. The Authority granted eleven (11) licence exemptions to Sotho Minigrid SPV Portfolio (Pty) Ltd to operate mini-grids for generation, distribution, and supply of electricity. These mini-grids, except Ha Raliemere Minigrid project, were partly funded by SE4ALL Project and operated in remote areas outside LEC’s service territory. The Ha Raliemere Minigrid project was a NEO 1 (Pty) Ltd.’s CSR initiative for communities surrounding Ha Ramarothole 20 MW solar PV plant.
In terms of electricity coverage, LEC effected a total of 8 769 connections during the Financial Year 2022/23, thereby increasing its total connections to 301 835 from 293 067 representing about 3% increase in connections. LEC’s connections were categorised as follows: 133 street lights, 284 466 domestic, 16 762 general purpose, 214 commercial Low Voltage (LV), 41 commercial High Voltage (HV), 170 industrial LV and 49 industrial HV connections.