THE United States of America has injected M8, 6 million into a solar energy generation project penned in for Mafeteng.
This follows the signing of a grant agreement in Maseru last week. The project is expected to generate 20 megawatts (MW) of power for on- and off-grid projects using solar energy through a plant to be constructed in Mafeteng district.
It is intended to expand Lesotho’s electricity production and increase its energy independence.
It is also expected to assist Lesotho to significantly reduce its cost of importing power by least at 10 percent, while also helping to boost the country’s economic development through creation of at least 200 jobs during the construction phase of the plant.
The project is being developed under a public private partnership (PPP).
US Ambassador to Lesotho, Rebecca E Gonzales and the Chief Executive Officer of the developing firm OnePower Lesotho Ltd, Matthew Orosz were signatories for the grant, in the presence of the acting Energy minister, Mokoto Hloaele among other dignitaries on Thursday.
During her address at the ceremony, Ambassador Gonzales said there is a need to improve access to existing power and to diversify the energy generation mix in Lesotho and other Sub-Saharan African countries.
“Today I will sign a grant worth more than M8, 6 million (600,000 USD) on behalf of the United States, through the US Trade and Development Agency (USTDA),” Ambassador Gonzales said.
“USTDA supports the development of well-planned, sustainable infrastructure projects in areas that host countries deem priorities. The OnePower project and this partnership represent just that – support for an important solar generation project that was competitively and openly tendered here in Lesotho.
“Electricity is both the lifeblood of economic development and an essential element for improving quality of life. Studies show that the costs of producing electricity are far less than the economic costs of not having it. In Lesotho and across Sub-Saharan Africa, there is a need to generate new power, to improve access to existing power, and to diversify the energy generation mix.
“The US, through Power Africa, has been working with the government and private sector stakeholders to assist in these objectives. I am pleased to be joined by our colleagues from Power Africa in Pretoria who came to Lesotho today for this announcement.”
She added that Lesotho has the capacity to be self-sufficient in terms of power generation and also export it, with the right support behind it.
“It is fully within Lesotho’s capacity to become a net exporter of energy in the future. Its competitive advantage can be used not only to enhance Basotho’s quality of life but also to make solar power Lesotho’s most economically important natural resource after water. The US, through the Embassy and Power Africa, is committed to assisting Lesotho in any way possible to unlock its energy potential.”
The ambassador also said it was encouraging that the CEO of OnePower, Matt Orosz, is a former Peace Corps volunteer in Lesotho.
“What an incredible testament to our enduring ties that Matt Orosz, a Peace Corps volunteer who served in Phamong, in Mohale’s Hoek, almost 20 years ago has now returned to Lesotho to serve in another way – by building part of the country’s renewable energy infrastructure.
“It was in Phamong where Matt was struck by the lack of electricity in his village and decided he would do something about it one day. Now he and Chaim Motzen are co-developers at OnePower, a company based in Lesotho, where American and Basotho engineers work together side-by-side. I think it’s important to note that these Basotho engineers were educated in Lesotho and now work to support their country’s renewable energy goals.”
Mr Orosz, said that his company has won a government tender to provide the service of setting up the solar project.
He said that the 20 MW power would be sold to the Lesotho Electricity Company (LEC), with which they have secured a 25 year long power purchase agreement.
“This project will lower the cost of electricity that Lesotho is importing by 10 percent and will also provide security of supply from Eskom’s load shedding and price hikes.
“It will create more than 200 jobs during construction, dozens of jobs in permanent and long term maintenance operations. In addition, it is helping Lesotho to achieve its climate (change mitigation) goals since its clean, renewable green energy.
“It is also proving that Lesotho is open for private investment which has many other beneficial effects though-out the economy,” Mr Orosz said.
For his part, minister Hloaele said the US’s consistent support to Lesotho over the years has played a significant role in the country’s development across different sectors.
He further noted that the solar project would also come in handy in reducing the amount of power imports required by Lesotho.
According to Mr Hloaele, Lesotho’s average power demand is 165 MW, yet the country only produces 72 MW from the Lesotho Highlands Development Authority’s (LHDA) ‘Muela Hydropower Station. This means Lesotho imports about 90 MW of additional power from South Africa and Mozambique.
“On behalf of the Ministry of Energy and Meteorology, I humbly thank the US government for its continuous and unquestionable support to the kingdom of Lesotho.
“The US’ support to Lesotho has relentlessly been cutting across different sectors (social, economic, political, environmental, technology and many others) of our national set up for many decades to date.
“With this financial support, the US is also contributing positively to the development of our energy sector. The importance of this grant to OnePower and to Lesotho cannot be overemphasized. Among others, it is going to help the country to close the deficit of power generation in Lesotho, and therefore reduce the amount of electricity imported from South Africa and Mozambique to meet our electricity demand.
“With the increasing electrification of villages in Lesotho, and envisaged mushrooming of big industrial projects resulting from the recent economic labs in Lesotho, electricity consumption is expected to increase significantly in the near future. This will result in a massive increase in imported electricity and erosion of more maloti to other countries.
“However, this solar project is going to help Lesotho to reduce electricity deficit. This project is not only going to save our limited funds for other local development projects but it is going to give us more flexibility to control our electricity process better in future,” Mr Hloaele said.
The construction of the plant will be supported by a feasibility study which will be carried out by US engineering and construction firm CDM International, Inc. based in Boston, Massachusetts. CDM International, Inc. will work to determine the remaining technical and economic analysis needed for the project, including helping to implement an electrification plan.