Co-investment with the Lesotho Highlands Development Authority
An important dimension of the proposed HMKLIII project is collaboration with the Lesotho Highlands Development Authority (LHDA), which is responsible for the Lesotho Highlands Water Project and oversees an intricate network of tunnels and dams to divert water from the mountains of Lesotho to South Africa. This project provides water for South Africa and generates both revenue and hydroelectricity for Lesotho.
The LHDA will be responsible for the HMKLIII project’s overall implementation, including the development of dams, tunnels, power stations, and infrastructure on Lesotho’s borders. The LHDA also owns the hydroelectric generating utilities at the Muela and Katse dams and supplies electricity to the Lesotho Electricity Company (LEC).
The Treaty on the Lesotho Highlands Water Project between the Government of the Kingdom of Lesotho and the Government of the Republic of South Africa specifically provides for the development of other projects to generate hydroelectric power. The LHDA Order of 1986, as amended, also provides for the development of these utilities in partnership with private sector entities
The Muela Hydropower Station
The Muela Hydropower station is being refurbished with funding provided by GOL, Gol does not have adequate funding to complete the refurbishment This is the earliest investment opportunity.
Oxbow Dam and Hydropower Utility
The intention is to design the oxbow dam, hydropower facility, connecting tunnel, and transfer tunnel into the Muela dam to bankability stage in order to raise funding from the market. This will be in a form of debt and equity. The HMKL III looks to participate in a form of both debt and equity, subject to conditions as set in the prospectus for funding, in the development, operations and maintenance of the 80 MW Oxbow 80 Hydropower station. Contract award for the design of the Oxbow dam and hydropower facility is currently under negotiations with the commissioning by 2029.
The Letseng La Terae Wind Farm
This project consists of a proposed development of a electricity generation facility of 35MW capacity, consisting of 42 wind turbines (Phase 1 ) near Letšeng-La-Terae, on the north-eastern plateau of the Maloti-Drakensberg in Lesotho. The project has a completed Feasibility Study and is ready for development subject to being granted the relevant statutory permissions and negotiating an offtake agreement with Letsēng Diamond Mine.
Maputsoe Solar Farm
This 70 MW project will be initiated by local developers and can commence in the short to medium term, contingent on approval of ESIA submissions and the relevant statutory permits. The project will link in to the Maputsoe Substation and from there by the 132 KVA line to the Liqhobong Substation via the Ha Lejone Sub-station.
For this project to be viable, a new 25 km 132 KVA line has to be constructed between Liqhobong Substation and the Letseng Diamond Mine. This line would also link the Letseng Wind Farm into the main grid. This project would cost USD 15 m (LSL 260 m) for the line and the upgrading of the sub-station.
Liqhobong to Letseng 132 KVA Line and Substations
The Maputsoe Solar and Letseng Wind Farm projects will provide a secure, reliable and lower cost power supply to the four diamond mines in the area (Letseng, Lucapa Mothae, Kao and Liqhobong). These mines are currently under significant economic peril as a result of the low diamond prices and unreliable, high cost electricity from South Africa, juxtaposed with the cost of diesel. Letseng is currently spending USD 12 m on diesel backup generators while the Lucapa Mothae Mine is totally dependent on diesel generation. In addition to the excessive cost of diesel generation, the implementation of these projects will have a major impact on the carbon emissions from these projects.
Mohale’s Hoek Wind Farm
This project is being developed by a Belgian-based company, Hirundo Energy and comprises 12 x 5 MW Wind Turbines generating 60 MW 140GWh annually. The project capex is estimated to be EUR 88 million (LSL 1,8 bn). Environmental and Social Impact Assessment (ESIA) applications were submitted in March 2022 and were reviewed in September 2023.