Compelo Energy is using cookies

We use them to give you the best experience. If you continue using our website, we'll assume that you are happy to receive all cookies on this website.

ContinueLearn More
Close
Dismiss

World Bank supports next phase of Lesotho Highlands project with a US$45M loan

The World Bank has approved a US$45M loan to support phase 1B of the Lesotho Highlands Water Project (LHWP). The loan has a maturity of 15 years, with a five-year grace period, and will be used to finance environmental, social and technical support to a scheme which will bring water to South Africa’s dry economic heartland of Gauteng.

The total cost of financing phase 1B of the project is US$1.1B, of which the World Bank is contributing 5%.

The largest share of financing (US$825M) will come from the South African capital and money markets and water users. Other financiers include the Development Bank of Southern Africa (US$45M), European Investment Bank (US$110M), the government of Lesotho (US$25M), foreign export credit-backed commercial loans (US$60M) and foreign commercial loans (US$10M).

Phase 1B will include the construction of a 145m high dam at Mohale on the Senqunyane river, a 15m high weir on the Matsoku river and water tunnels from each site to deliver a combined 11.8m3/s of water to Katse dam.

Katse dam was built in phase 1A of the project, along with a 72MW power plant at Muela, and will transfer water to the Vaal river system in South Africa. At a cost of US$2.5B, phase 1A was supported by the World Bank with funding of US$110M in 1989.

This phase of the five-part project is virtually complete and has so far provided Lesotho with US$85M in revenues — approximately 50% of this has been allocated to community-identified infrastructure projects, creating about 15,000 jobs for the local people.