Lesotho Highlands Water Project (LHWP) Phase II

In terms of infrastructure, the project involves construction of: (1) a 165 m high, concrete-faced rockfill (CFRD) embankment Polihali dam downstream of the confluence of the Orange-Senqu and Khubelu rivers, Mokhotlong district. (2) a 50-m-high saddle dam. (3) a 38 km long, 5-m-diameter Polihali–Katse dam tunnel that will transfer water from the Polihali reservoir to the Katse reservoir, (4) a hydropower scheme - The exact form of the Phase II hydropower component is still to be confirmed following the completion of further feasibility studies. The studies have looked at pumped storage and conventional hydropower options. The decision was taken to defer the pump storage option (due to prevailing economic conditions) and advance the conventional options. This entails one site at Oxbow on Malibamatšo River and two sites on the Senqu River. These studies are expected to be substantially complete by the end of June 2019 and (5) advance infrastructure such as roads, bridges, high tension power lines and telecommunications systems, accommodation and construction facilities . Water will be abstracted from the Polihali reservoir through two separate concrete bell-mouth intakes on the western side of the Polihali reservoir, in the Khubelu river, 3 km upstream of the confluence with the Senqu. The Phase II project therefore entails the construction of the Polihali Dam; a transfer tunnel from Polihali Dam to Katse reservoir; as well as advance infrastructure, environmental and social development programs in Lesotho. Phase II will increase the current supply rate of 780-million cubic metres a year incrementally to more than 1,270 million cubic metres a year. South Africa receives 24.6m³ of water per second from the LHWP. A cumulative total of 45.5m³ per second will flow as a result of the expansion.

DESCRIPTION

~~The first-phase of the multi-phase Lesotho Highlands Water Project (LHWP) entailed the construction of Katse Dam, Mohale Dams, Matsoku Diversion Tunnel and the Muela hydropower station.  Lesotho benefits from a sustainable, independent energy supply for Lesotho that will meet the country’s electricity requirements and royalty revenue from the project, while South Africa benefits from the security of supply of high quality water that is transferred into the Vaal River system for  domestic and industrial use in the Gauteng province.
Phase II of the LHWP will be implemented in terms of two distinct components: a water delivery system to augment the delivery of water to South Africa and a hydropower generation system, which will increase the current electricity generation capacity in Lesotho.
The program involves the construction of the Polihali Dam and the Transfer Tunnel in the Mokhotlong district and a hydropower scheme following the conclusion of a joint feasibility studies.
As per the provisions of the Phase II Agreement between the Government of the Kingdom of Lesotho and the Republic of South Africa, the implementation of the Kobong Pump Storage scheme or any other hydro scheme was subject to the outcome of a joint feasibility studies. The technical and the economic feasibility studies for the Kobong Pump Storage scheme were completed in 2013. However, the outcome was that further studies should be undertaken. These  included, a market study, an integration study, geotechnical investigations and legal and commercial arrangements
Lesotho secured funding from the World Bank to undertake the above studies, including convectional hydropower options. These studies are expected to be substantially complete by the end of August 2019 . The further feasiility studies have looked at pumped storage and conventional hydropower options. The decision was taken to defer the pump storage option (due to prevailing economic conditions) and advance the conventional options. This entails one site at Oxbow on Malibamatšo River and two sites on the Senqu River.   .
The topography of the region allows for the possibility of developing a hydro-power generation in Lesotho in conjunction with the provision of water supplies to the RSA. For South Africa, construction of this dam and related infrastructure will guarantee the desired level of water availability in Gauteng and the Vaal River system in the most cost-effective manner.  In parallel with water conservation measures in the Vaal River, it will also influence the improvement of water quality amongst many benefits.  Phase II water delivery and hydropower generation are expected to be commissioned at the same time early in 2026, and the project close out is forecast for December 2028.

OBJECTIVES AND RATIONALE

PROJECT RISKS

PROJECT ECONOMICS

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• ECONOMIC INTERNAL RATE OF RETURN (EIRR): 0.00

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PROJECT FINANCING

OPERATION AND MAINTENANCE

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COMMENTS ON FINANCE:

The prime promotion and governing mechanism, Lesotho Highlands Water Commission (LHWC), can be assumed to have made every possible effort to market the project and line up financing commitments from public and private actors in a timely fashion. There is unlikely to be much scope for the use of PIDA instruments.

STUDIES

PROJECT STAKEHOLDERS

Sectoral Organisation

Global Water Partnership

Project Sponsor/Owner/Operator

Lesotho - Government of Lesotho

National Coordination

Lesotho - Ministry of Water

Project Implementer

Lesotho Highlands Development Authority

Project Sponsor/Owner/Operator

South Africa - Government of South Africa

Regional Coordinator

Southern African Development Community

Private Sector Partner

Trans-Caledon Tunnel Authority

National Coordination

Zambia - Ministry of Water Development, Sanitation and Environmental Protection

CONTACTS

Mr Tente Tente-tentet@lhda.org.ls

Mr Masilo Phakoe-phakoem@lhda.org.ls;maseatilem@yahoo.co.uk

Ms. Duduzile Twayi-TwayiD@dws.gov.za

CONTRIBUTION TO 2030 AGENDA