The Kingdom of Lesotho, with support from the African Development Bank, is leveraging its abundant water and renewable energy resources to chart an ambitious path accelerating its economic transformation with potentially significant impacts on South Africa and Botswana.
King Letsie III of Lesotho and African Development Bank President Dr Akinwumi Adesina met recently in Maseru to discuss Lesotho's economic growth.
King Letsie III and the President of the African Development Bank, Dr Akinwumi Adesina, met in Lesotho’s capital, Maseru, to discuss a transformative partnership designed to accelerate economic growth in the country. Their discussions focused on infrastructure and human capacity development covering health, agriculture, tourism, manufacturing, and private sector investments to unlock Lesotho’s potential for economic growth.
"We will hasten to ensure that the right policies and incentives are in place to attract participation from the private sector, particularly in sectors such as health, agriculture, and manufacturing." King Letsie III said.
The African Development Bank Group has earmarked $331 million for investment in Lesotho from 2025 to 2030, focusing on quality infrastructure, capacity building, energy development, regional integration, and institutional strengthening. The bank’s approach aligns with the upcoming Country Strategy Paper, which has at its core the revitalisation of private sector-driven job creation to promote inclusive economic growth.
Lesotho, also known as the ‘Kingdom in the Sky’ is a critical regional water supplier.
"In the world today, the aid architecture has completely changed. We discussed emerging global developments and how to adapt, as well as what it will take to attract private investment. We will support the development and strengthening of the Kingdom of Lesotho’s institutional, technical and human capacity as well as help design bankable projects that attract investment.” Adesina said.
According to the Bank Group President, Lesotho’s abundant hydropower and other renewable energy sources such as wind and solar, have the potential to generate more than enough electricity for domestic consumption and surplus capacity for export to neighbouring countries.
The bank is committed to supporting a 700 km water transfer project that will supply Lesotho and the region with 308 million cubic metres of water for domestic, agricultural, and industrial use. The bank is expected to mobilise about $260 million for the project.
"We will work on a $2.3 billion multi-partner integrated water transfer project that includes energy components, agri-value chains and trade facilitation in Lesotho, and from Lesotho through South Africa to Botswana,” Adesina said after meeting with King Letsie III.
The Minister for Finance and Development Planning, Dr Rets'elisitsoe Matlanyane said Lesotho plans to build a substation to export excess power production to South Africa as its energy supply will exceed domestic demand by the end of 2026.
The government aims to transform Lesotho into a renewable energy powerhouse through King Letsie III's Just Energy Transition Fund, a blueprint for renewables development. The kingdom also aims to meet its Paris Agreement commitments well before 2050 as a fully carbon-neutral power producer.
The country's montane wetlands are vital for millions living in the Orange River Basin that stretches across Lesotho, South Africa, Botswana, and Namibia. Rivers flowing from its highlands are critical to meeting the region’s needs for secure and sustainable water and energy supply.
Domestically, the government is determined to provide universal access to clean water and sanitation by the end of 2025. The African Development Bank-financed Lesotho Rural Water Supply and Sanitation Project is delivering significant impact. Up to 190 km of pipelines to distribution networks, water storage tanks with a capacity of 3.48 million litres, and 166 public water points have been installed, serving some 28 266 people in eight zones in the Maseru and Berea districts.
While in Lesotho, Adesina visited the Sekete Primary School and Thusong Health Clinic, two community-based institutions that benefit from the African Development Bank's Lesotho Rural Water Supply and Sanitation Project.
"These children are our future. Every investment we make in water, sanitation, and education is an investment in Africa's present and future potential,” said Adesina.
Describing Adesina as a man of action, King Letsie III conveyed his appreciation of this official visit, the first by a president of the African Development Bank. He noted it as a reflection of the bank’s and Adesina's recognition of Lesotho's progress in transforming and improving people's lives.
"We currently have eight ongoing projects worth $60 million and look forward to significantly increasing our engagement with the kingdom," said Adesina.
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