South Africa - Lesotho Highlands Water Project (LHWP), Phase II


Project Summary

Approval Date 06 Oct 2021
Planned Completion Date 30 Dec 2027
Last Disbursement Planned Date 30 Dec 2027
Sovereign / Non-Sovereign Sovereign
Sector Water Supply & Sanitation
DAC Sector Code 14010
Commitment U.A 62,683,227.9
Status Approved

Project General Description

The proposed project fits with the objective to deepen regional integration and promote industrialization in South Africa. It also realizes the GoKL’s aspiration to boost benefits from its natural resources and develop its infrastructure to create the necessary enabling conditions for private sector development. Both South Africa and Lesotho are inextricably linked socially and economically, and the project is further cementing their relationship for mutual development. The Project is one of the Southern Africa Development Community (SADC) priority water infrastructure projects for promoting regional integration. The Project is estimated to cost ZAR 32.562 billion (UA 1.576 billion), net of taxes and duties. The AfDB loan of ZAR 1.3 billion and NDB loan of ZAR 3.2 billion will finance, on pari-pasu basis, part of component B – Main works covering Polihali Dam and Polihali Transfer Tunnel works. The Project will provide secure and sustainable water sources to the population living in the Gauteng Region covering five provinces (Guateng, Freestate, Mpumalanga, North West and Northern Cape Provinces) of South Africa with a combined population of 26 million and 60% of South Africa’s economy. The water delivered and transferred to the Vaal River System will ensure water availability for domestic consumption, irrigation, industries and mining. On the Lesotho side, more than 85,000 people will benefit upon completion of the project, which is bound to impact positively on community development activities, private sector growth through improved infrastructure and contribute to Lesotho’s socio-economic development.

Project Objectives

The development objectives of the project are to ensure water security of the Gauteng Region of South Africa and improve the socio-economic development of Lesotho through improved infrastructure and potential for hydropower generation. The Project will specifically aim to increase the transfer of water from Lesotho to the Republic of South Africa from the current 780 million m3/year to 1260 million m3/year and to provide opportunity to generate additional hydroelectric power in Lesotho.

Beneficiaries

The water to be delivered from the project’s water delivery system will augment availability of water in the greater Gauteng region covering five provinces of South Africa with a combined population of 26 million and 60% of the economy. The water delivered and transferred to the Vaal River System will ensure water availability for domestic consumption, irrigation, industries and mining with Rand Water, Midvaal Water, Sedibeng water, ESKOM and SASOL as typical customers. Rand water supplies water to nearly 12 million people that includes greater Johannesburg, Tshwane Metro, Ekurhuleni Metro, Emfuleni Metro and others with an average daily consumption of 4,460 million litres. The cumulative socio economic impact in South Africa includes the security of 120,000 job opportunities and more than 420,000 jobs associated indirectly during the operation phase of the project. The project infrastructure catchment area in Lesotho has an estimated population of 85,000 (2021) who will benefit upon completion of the project’s infrastructure and community development activities directly. It is expected that about 52% of the beneficiaries will be female. The project will create more than 6,000 temporary jobs during the construction phase and this will indirectly benefit businesses and other service providers in Lesotho. Through reinvestment of the royalty income and operation of the infrastructure, more than 5,500 new jobs (58% skilled and semi-skilled) will be directly and indirectly created in the economy.

Participating Organization

Funding
African Development Bank
Implementing
LESOTHO HIGHLANDS DEVELOPMENT AUTHORITY

Information

IATI identifier 46002-P-ZA-EA0-004
Last Update 04 Dec 2021

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Contact Details

Name DEMISSIE Eskendir Alemseged
Email e.alemseged@afdb.org

Geographic Location

Country South Africa