African Development Bank Funds Lesotho’s Highlands Water Project

The Board of Directors of the African Development Bank Group has authorised a loan of $86.72 million to assist fund the second phase of the Lesotho Highlands Water Project.

Water will be transported to the Gauteng area of South Africa as part of the multi-phase project, while hydroelectricity will be generated for Lesotho. The Lesotho Highlands Water project includes harnessing the Senqu/Orange River waters in the Lesotho highlands for mutual benefit through the construction of a series of dams.

The funds will be used to construct the Polihali Dam and reservoir, a 38-kilometre-long water transfer tunnel, roads and bridges, telecommunications infrastructure, and to extend electricity and other development infrastructure to Lesotho by the Trans-Caledon Tunnel Authority, a South African state-owned entity charged with financing and implementing bulk raw water infrastructure projects. The new structure will complement the facilities constructed during the first phase of the project. The Lesotho Highland Development Authority will oversee the project’s execution within Lesotho’s boundaries.

The project would increase water transmission capacity between Lesotho and South Africa from 780 million cubic metres per year to 1,260 million cubic metres per year, allowing Lesotho to generate more hydroelectric power. The project’s infrastructure improvements and enhanced hydropower capacity are designed to improve water security in South Africa’s Gauteng area while also boosting Lesotho’s socio-economic growth.

These enhancements are anticipated to benefit South Africa’s 26 million people while also strengthening an area that accounts for 60% of the country’s GDP. Over the next six years, the Lesotho project will benefit over 85,000 people in the project region and provide over 6,000 employment. The royalty payments for water transfers will assist Lesotho’s economy.

The New Development Bank of Shanghai is also providing $213.68 million to the $2.171 billion projects. South Africa’s government will pay $1.871 billion and provide a credit guarantee. The project’s first phase was finished in 2003 and opened in 2004.

The African Development Bank Group now has 23 businesses in South Africa, with a total financial commitment of more than $4.5 billion.

Source: Construction Review Online

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