Lesotho Set to Announce New Energy Investment Drive
Image: Daily Maverick
AOP talks to Khomoatsana Tau, Principal Secretary for the Lesotho Ministry of Energy and Meteorology, about the new energy investment and diplomacy drive to be launched at the Africa Oil and Power Conference in October 2019.
What are the main objectives of the energy investment and diplomacy drive to be launched by the Ministry of Energy and Meteorology?
The ministry’s mandate is to ensure adequate energy services to the public. What we want is to have at least a reserve of 60 days so that we can survive without imports. What we are doing is trying to invite investors from inside and outside Lesotho to come and play a role in helping the government to provide these services because we do not believe we can do it alone.
The Ministry of Energy and Meteorology is committed to building greater trade and investment ties with South Africa and Angola, in particular. What is the reasoning behind this and are there any other investment ties that the Ministry is considering with these regions?
Circumstances dictate that we trade with South Africa. We have no other neighbor, therefore, we have to work together, and it has been happening for a long time. We believe this relationship will continue to strengthen.
Our interest in Angola is that it is an oil and gas producing country and it is the closest oil-producing country to Lesotho. If we can work together with them and try go a bit downstream to get crude oil, we can create a refinery in the country. A refinery is not only limited to making fuels for cars, but also providing the opportunity for other by-products of oil processing that can generate income for the country and its people. It will create new opportunities.
What opportunities are there for private sector players to partner with the Ministry of Energy and Meteorology?
We want to work with the private sector because we know that we cannot do this alone. We have an ambition and commitment to make electricity accessible to every citizen by the year 2030. This is only 10 years away!
We need to generate power and these generators or independent power producers would have to be from the private sector. Currently, Lesotho generates a total of 74 megawatts (MW) in the form of hydroelectric power. 72 MWs come from the main station in Mwela, and the remaining 2 MWs come from a mini hydro-station.
However, the demand in Lesotho is far higher than that. This winter, the demand peaked at around 150 – 160 megawatts. This tells us that we have a huge gap in production and demand and at the moment, this gap is being filled by power imports from South Africa and Mozambique.
We love Mozambique power, it is clean and comes from hydropower stations, but South African power is generated from coal and the world is trying to move away from using coal and soon there will start being a lot of taxes on it.
In Lesotho, we have water, wind, and sun – all renewable energy sources. We want investments in this sector to close the gap between supply and demand. Moreover, we can make a business from selling excess power to the global market.
Along with renewable energy, will there be opportunities for transmission and distribution?
The Lesotho Electricity Company is the only distributor in the country, but the law does allow for other players to enter the market. With this, if someone wants to come here to distribute electricity, they will be licensed to do that.
How is the government planning to show its commitment to providing a stable energy supply in the medium and long-term?
The government has been providing budgetary allocations to the Ministry to make the service available to the people. Considering the number of people that still need to have access to electricity, it is a small amount. We only have 150 million each year allocated to the electricity sector which can provide electricity to only about 10 000 households with a maximum of 12 000. We have around 300 000 households that have yet to be connected.
We have been working with the Ministry of Finance to come up with a policy for public-private partnerships. That policy is now in place and we are working around the legislative framework to facilitate the implementation of that policy. That does not mean the policy is not effective, it is.
What new projects is the ministry currently developing?
We have the first ever independent power producer, promising 20 MW of solar power. It is now a matter of implementing the program. We also have a government owned project to generate 70 megawatts of solar. We have hydropower facilities that have just been completed for a total of 200 megawatts, or thereabouts – these are different stations throughout the country, the largest being 90 megawatts.
The Ministry has been putting a lot of effort not only into being able to cover the electricity demand within Lesotho, but also creating job opportunities to start distributing outside of Lesotho.
I understand that the region is working on a regulatory framework to facilitate the movement of power from one country to another. The deadline I heard was November of this year which means that as of December, there will be free power trading between countries. This will allow us to produce here and send our electricity to the market.
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