The Government of Lesotho has signed an agreement with South Africa, which will see the latter providing funds of SAR12bn ($1.3bn) for a hydro project in Lesotho.
The Lesotho Highlands Water Project is estimated to have power capacity in the range of 1,000MW to 1,200MW. Also, the project is will supply water to South Africa.
An agreement was signed between the two governments after Lesotho Prime Minister Thomas Thabane sought for credit finance for the project, reported iol.co.za.
Earlier in 1986, the two countries signed an agreement for the first phase of the Lesotho Highlands Water Project. It included construction of Katse and Mohale dams as well as Muela hydroelectric power station at Butha-Buthe in Lesotho.
However, the development of Kobong power station was shelved when the second phase agreement, which was signed between former Lesotho Prime Minister Pakalitha Mosisili’s government and South Africa in 2011, excluded the project.
Under the new agreement, South Africa will construct the Polihali project and connecting tunnels, while Lesotho will build other structures feeding the current Katse project.