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South Africa’s $2.5 billion Lesotho water project delayed to 2027

PUBLISHED: Wed, 10 Mar 2021 17:08:01 GMT

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JOHANNESBURG, March 10 (Reuters) – South Africa’s long-delayed 37 billion rand ($2.46 billion) Lesotho Highlands Water Project (LHWP) – facing funding pressures, COVID-19 delays and protests in the tiny mountain kingdom – will begin water delivery in 2027.

Responding to questions from Reuters, the Department of Water and Sanitation said the building of roads, accommodation and electricity installations had begun, and that border closures due to COVID-19 would not have a “material impact”.

“COVID-19 disruptions aren’t expected to have a material impact on the planned completion date of project works and commencement date of water delivery to South Africa, in early 2027.”

Created in 1984, the LHWP was designed to have five phases over 30 years and transfer up to 2 billion cubic meters of water annually from Lesotho to South Africa’s commercial hubs and industries like Sasol and Eskom.

Phase one started delivering water in 1996. Phase two, which includes the 2.3 billion cubic metre Polahli Dam and a 1,200 megawatt hydro-electric plant in Lesotho, was meant to be complete by 2020.

The department said the 60 billion rand needed by the Trans-Caledon Tunnel Authority (TCTA), South Africa’s state-owned company responsible for the Lesotho project, would be generated through further debt issuance.

“TCTA is planning a debt capital markets programme in the near future to complement funding of capital expenditure and possible long-term refinancing of shorter-dated maturities,” the department said.

In 2019 and 2020 water supply to Gauteng was periodically throttled as a result of severe drought related to climate change and creaking infrastructure due to funding shortfalls for maintenance and new projects.

Bitter disagreements over compensation and job reservations between Lesotho officials and the communities that need to be relocated to make way for construction, around 500 households in 35 villages, led to protests in January and February, threatening to lengthen delays.

Two Lesotho community organisations told Reuters they were considering further protests and legal action against the Lesotho Highlands Development Authority (LHDA). The LHDA did not respond to written questions from Reuters. (Reporting by Mfuneko Toyana; editing by Jonathan Oatis)

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