LEC extends power purchase contract with Mozambique
THE Lesotho Electricity Company (LEC) has signed a deal to extend its power purchase from Mozambique’s power utility company, Electricidade de Mocambique (EDM) for another year.
LEC Managing Director Mohato Seleke signed on behalf of his company while EDM chairperson Marcelino Alberto signed on behalf of the Mozambican company.
The renewal of the contract, worth M120 million, will enable the LEC to import 35 megawatts (MW) per day for the next 12 months.
EDM has been supplying Lesotho with power since 2018 as it cannot produce enough electricity on its own.
Lesotho only produces about 72 megawatts (MW) at the Muela Hydropower Station but this is not enough to meet the national demand of about 160 MW per day.
Apart from EDM, LEC also imports from neighbouring South Africa’s Eskom to cover the deficit.
Commenting on the renewal of the deal with EDM, LEC’s public relations manager Makhetha Motšoari said it was necessary to retain EDM in case South Africa experienced some challenges which would prevent it from supplying Lesotho with electricity. The neighbouring country has a deficit and has resorted to load shedding to manage the situation.
“LEC recently signed a M120 million agreement with EDM for bulk electricity purchases for 12 months,” Mr Motšoari said.
“The reason for continuing to import power all the way from Mozambique is to ensure security of supplies. We need to guard against any supply challenges by South Africa that may prevent it from supplying us with power. They are already experiencing load shedding. This deal basically ensures that we will not be affected by any load shedding in South Africa,” Mr Motšoari added.
EDM also confirmed the renewal of its contract with LEC.
“Based on this (contract renewal) agreement, LEC will receive between 35 MW which will reinforce the supply of electricity to LEC,” EDM said in its statement.
“Bilateral trade is part of EDM’s strategy to maximise energy exports, stimulate and diversify its revenue base and strengthen bilateral relations.
“The two companies (EDM and LEC are part of the Southern Africa Power Pool (SAPP), an organization of Southern African electricity companies. EDM is on the list of energy suppliers to Lesotho,” EDM further states.
Meanwhile, there could be a tariff hike in Lesotho if the LEC gets its way.
Mr Seleke said they would apply for the hike as it was the only way to cushion them for the power imports which cost them over M600 million per year.
“Importing electricity is very expensive for the LEC. In the coming days we are going to apply for a tariff review for the 2021/22 financial year. We are proposing to set aside about M630 million for the purchase of electricity from EDM and Eskom,” Mr Seleke said at a press conference in Maseru on Wednesday.