Hydropower

The Lesotho Highlands Water Project (LHWP) is a multi-billion Maloti bi-national project of the Governments of the Kingdom of Lesotho and the Republic of South Africa which was established by the Treaty of 1986. It harnesses the water resources of the Lesotho highlands through the construction of a series of dams for the mutual benefit of Lesotho and the Republic of South Africa, supplying water to the Gauteng region of South Africa and hydropower to Lesotho.

The first phase (Phase I) of the multi-phased project was completed in 2004 and the second phase (Phase II) is currently underway.

Article 8 of the Phase II Agreement determined that the hydropower generation component of Phase II would comprise a pumped storage scheme utilising the existing Katse Reservoir as the lower reservoir and a new upper reservoir in the Kobong valley, or any other scheme to generate hydropower, following initial feasibility studies conducted in 2008 and 2011. However, the eventual scope of the hydropower component will be determined pending the outcome of imminent further feasibility studies.

The Agreement further stipulated that the implementation of the Kobong pumped storage scheme is subject to agreement on the outcome of a joint feasibility study. This study which is about to commence will include:

  • A market study
  • An integration study
  • Geotechnical investigations
  • Legal and commercial arrangements
At the same time, these further feasibility studies will explore alternative viable hydropower generation schemes that will increase the electricity generation capacity in Lesotho to meet the country’s electricity requirements.


Further feasibility studies
In April 2015, the World Bank approved a grant for the Lesotho Highlands Development Authority (LHDA) to conduct further feasibility studies to review the economic and institutional viability of the Kobong Scheme. At the same time, the further feasibility studies will explore alternative viable hydropower generation schemes that will increase the electricity generation capacity in Lesotho towards meeting the country’s electricity requirements.

In July 2015 the LHDA solicited Expressions of Interest from suitably qualified consultants, and following completion of the evaluation process, six consultants were shortlisted from 24 submissions, to participate in a competitive bidding process. The six shortlisted firms represent a wide international market reach and include at least one firm from a developing country, as the World Bank procurement criteria stipulated. The firms which hail from North and South America, Europe, Australia and South Africa, offer considerable expertise and are expected to yield a high standard of service. Some of these include Lesotho firms in their teams.

The six shortlisted consultants were provided with the Terms of Reference (as part of the full Request for Proposals pack) towards the end of October 2015 for the further feasibility studies and were invited to submit proposals by 18 December 2015.

The technical bids were evaluated in January 2016. The recommendations of the evaluation panel were submitted to the technical sub-committee and Board for review before their submission to the World Bank. The World Bank has given no objections to the technical evaluation and the evaluation of the financial bids has commenced.

Work on the feasibility studies is expected to commence in the second quarter of 2016 and the study is expected to take approximately two years to complete.