MASERU – The chief executive officer of the Lesotho Highlands Water Project, Tente Tente has welcomed the approval of a $86.72 million loan by the African Development Bank Group’s Board of Directors.

In a statement the bank says South Africa’s Trans-Caledon Tunnel Authority will use the funds to co-finance construction of the second phase of the Lesotho Highlands Water Project.

It consists of the Polihali Dam and reservoir, a 38 kilometer-long water transfer tunnel, roads and bridges, telecommunications infrastructure, and to extend electricity and other development infrastructure to Lesotho.

“The new construction will complement facilities built during the project’s first phase.

The Lesotho Highland Development Authority will implement the part of the project that falls within Lesotho’s borders.” says the bank

“The AfDB funding is for construction of the Main Works – the Dam and Tunnel – which are due to commence during the second half of 2022, so it comes at the right time, to ensure that we meet our project plan for the main works. This means we are now more likely be ready to start on time as planned and complete on schedule” says Tente

Once completed, the project is expected to boost water transfer capacity between Lesotho and South Africa to 1,260 million cubic meters/year, up from the current 780 million cubic meters/year, and enable additional generation of hydroelectric power in Lesotho.

“The two governments’ partnership on this project around the shared water resources from the Orange-Senqu River Basin serves the interests of their mutual development agenda and also deepens regional integration,” said Dr. Beth Dunford, African Development Bank Vice President for Agriculture, Human and Social Development.

She says the intervention will be the first major project to be financed by the Bank in the water sector in South Africa and it will complement the Bank’s current support in the energy and transport sector, diversify the Bank’s portfolio and consolidate the Bank’s strong partnership with the country.

Expected project benefits include greater water security in South Africa’s Gauteng region and a boost to Lesotho’s socio-economic development due to infrastructure improvements and increased hydropower capacity.

In Lesotho, the project is expected to benefit more than 85,000 people in the project area, and generate more than 6,000 jobs over the next six years. Lesotho’s economy will also receive a boost from the royalty payments it will receive for water transfers.

These developments are expected to positively impact 26 million people in South Africa and boost a region that accounts for 60% of the country’s economic output.

To date the highlands water project has a total cost of $2.171 billion.

The African Development Bank Group’s active portfolio in South Africa comprises 23 operations with a total commitment of about $4.5 billion in financing.