South Africa, Lesotho Agree on Phase II of $1.3 Billion Power and Water Scheme

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The $1.3 billion second phase of the Lesotho Highlands Water Project (LHWP) has been approved in principle by the governments of South Africa and Lesotho. Tenders for the scheme are scheduled to be issued in late 2013 or early 2014. The confirmation for the project will secure a continued supply of water for South Africa and a source of hydroelectric power for Lesotho.

South Africa will provide total funding for the project, which will supply water for two major nodal developments planned for Lephalale, which is near Vryburg and where new mines are being developed, and for strategic infrastructure projects at Steelpoort. Edna Molewa, the Minister of Water and Environmental Affairs, said that the project is planned for completion by August 2020. The $1.3 billion investment estimate is about 33% higher than the initial figure of less than $1 billion. Officials said that the Trans-Caledon Tunnel Authority would obtain funds from various financial institutions.

The scope of the project covers the construction of the Polihali Dam and connecting tunnels by South Africa. Another new dam will be built near Polihali by Lesotho, and both of these dams will feed the existing Katse main dam for onward supply to South Africa. Hydropower will be generated from the three dams for Lesotho.

South Africa currently receives 24.6 cubic meters per second (cumecs) from the LHWP. When the second phase is commissioned, the flow will expand to 45.5 cumecs and the project will generate 1,000 megawatts (MW) of power for Lesotho. The funding and design of the generating facilities has yet to be finalized, and a pumped storage scheme has featured in past scenarios.

The scheme is expected to create thousands of direct and downstream jobs, and to be a boost for South African and Lesotho construction and materials supply companies. The minister said that an additional phase would provide water to Botswana through the same channel as the supplies to South Africa.

South Africa, Lesotho, Botswana and Namibia have signed an agreement to receive water from the scheme. Botswana and Namibia are also interested in buying power from the project.

"If we are peaking at 132 MW and we suddenly put 1,000 MW into the stream, we'll have at least 800 MW to export," said Moeketsi Majoro, Lesotho's development planning minister. "But a lot of engineering and geotechnical studies still need to be undertaken."

Other development plans that have been mooted, but not confirmed, for Lesotho include a hybrid plant that would generate 6,000 MW of wind power, and 4,000 MW of hydropower with an investment of about $15 billion.

For related information, see October 31, 2011, article - Lesotho Signs for $15 Billion of Wind and Hydro Projects, and the August 15, 2011, article - Hydropower and Pumped Storage Projects Developed for Lesotho-South Africa Water Scheme.

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