THE European Union (EU) and the European Investment Bank (EIB) have handed a M1, 3 billion boost to Lesotho to bankroll the Lowlands Water Development Project phase II (LLWDP II).
The LLWDP II is a water project targeting the lowlands of the country.
The water project, which is expected to increase reliable supply of potable water and sanitation services for at least 300 000 people in Mafeteng and Mohale’s Hoek, is expected to be implemented starting from June this year.
The total funding for the LLWDP II is €82 million (about M1, 3 billion), which comprises a €41 million loan from the EIB and €41 million from the EU. The funds are meant to help the country attain sustainable development goals.
EIB is a lending institution of the EU owned by its member states. It avails long term finance for sound investment in order to contribute towards EU policy goals.
The LLWDP II involves bulk water infrastructure set up comprising a water treatment plant, transmission mains, pumping station, and distribution network. The infrastructure of low scale sanitation and hygiene measures; activities and awareness building regarding the reduction of water loses and technical assistance to support the implementation of the project.
Finance Minister Moeketsi Majoro and EIB president Diederick Zambon signed the financing agreement on behalf of the government and the EIB on Thursday in Maseru.
Dr Majoro said the project would help strengthen the country’s resilience to climate change shocks.
“The project will contribute to the implementation of the Lesotho National Strategic Development Plan 2012/13 to 2018/2019 that identified the provision of water access in the lowlands, where about two-thirds of the population lives as a severe problem,” Dr Majoro said.
“The project will enhance the resilience to climate change and will help the government achieve development goals reflected in its Vision 2020 strategy; to have a healthy and well developed human resource base by ensuring that all Basotho have access to safe drinking water and basic sanitation.”
For his part, EIB vice president Mr Zambon said the project is expected to benefit about 300 000 people to access clean water.
“This signature today marks our bank’s return to your country with a new crucial project since the last loan signature in 2010 for construction of Metolong Dam, the completion of which was finally inaugurated in 2015.
“EIB covered at the time 50 percent of the dam and water supply programme’s total investment costs through a loan of €140 million.
“The LLWDP agreement signed today concerns the second phase of this water supply scheme, for which the preparation started already as from the beginning of this millennium with technical assistance from EU resources.
“Lesotho is increasingly feeling the impact of climate change, especially when it comes to extended droughts, as water scarcity constitutes a major barrier to economic development and inclusive growth,” Mr Zambon said.
He said the project will enable the Water and Sewerage Company (WASCO) to more than double its annual water sales from 14 million cubic metres to 30 million cubic metres over seven years from 2024 onwards.
“The water development project in the lowlands aims to provide a sustainable water supply for the local population and is expected to have a positive impact on as many as 300 000 direct beneficiaries.”
He said the EIB loan is expected to be paid over the next six years with a fixed interest rate to be determined later.
The Minister of Water Samonyane Ntsekele, who was also present at the signing ceremony, thanked all involved parties for ensuring the confirmation of the agreement.
LLWSS was conceived more than 20 years ago. The first major investment envisioned under the scheme was the Metolong Dam and Water Supply Programme (MDWSP), co-financed by the EIB and the government for which the main infrastructure was completed in 2015. The dam has already provided safe drinking water to Maseru and other major towns located in the north and south of the capital city.
The project, which is expected to increase reliable supply of bulk potable water and sanitation services for at least 300 000 people and strengthen the water authority’s capacity to operate and maintain the infrastructure.
The EU Ambassador to Lesotho Christian Manahl, who was also present at the signing ceremony, said a country which exports water to South Africa should be able to afford reliable water supply to its citizens.
“Improved access to clean water and sanitation is a pre-requite for Lesotho’s further socio economic development.
“While large quantities of premium water from the country’s highlands are exported to South Africa and generate revenues for the government budget, too many people and businesses predominately located in the lowlands, are still struggling with reliable access to clean water and sanitation services.
“This has a negative impact on the health situation in the country but also on attracting investments and creation of jobs. The EU-EIB financing package, an EIB loan to be blended with a €41 million EU grant, accounts for more than 60 percent of total project cost, which also includes a €67 million World Bank loan,” Mr Manahl said.