Insights from Mrs. Keketso Rantekoa

Infrastructure development is crucial for any nation, particularly for developing countries like Lesotho, which has made significant strides to catch up with the rest of the world. Investing in infrastructure not only benefits the country and its people but also attracts tourists and investors, enhancing economic growth. Essential to this development is the provision of clean water and energy, aligning with Sustainable Development Goal (SDG) 7, which emphasises ensuring access to affordable, reliable, sustainable, and modern energy for all.

Clean water and energy are fundamental human rights, crucial for leading healthy lives and driving various economic and social activities. Access to water is a life-sustaining necessity, and initiatives like the Lesotho Highlands Water Project are pivotal in this regard. The joint treaty between South Africa and Lesotho involves the construction of an intricate network of tunnels and dams to divert water from Lesotho’s mountains to South Africa. This project aims to alleviate water supply shortages in South Africa, increase power generation within Lesotho, and reduce its dependency on imported electricity. As the Head of Client Coverage, Corporate & Investment Banking, I am dedicated to leveraging analytics to help the Bank identify and support projects of this magnitude, aiding in their realisation.

Currently in its second phase, the project involves building a third dam in Mokhotlong district to feed into the existing Katse dam. The project, valued at over R40 billion, encompasses access roads, bridges, the main Polihali Dam, a transfer tunnel to Katse, and additional tourist and administrative facilities. Medium-term projections suggest that Lesotho’s economy will grow by an average of 2.9% annually, largely driven by the LHWP II, with GDP levels expected to return to pre-pandemic levels by 2024.

Standard Lesotho Bank’s role in facilitating the LHWP, through its Ecosystems approach, centres on shared growth and partnership aspirations. This approach emphasises maximising the value of relationships? through co-creation and building on trust, communication, and mutual interdependence.

This approach has enabled the Bank to become the primary adviser, transactional banker, and financier for contractors, subcontractors, and other stakeholders in the project’s value chain. As an authorised dealer, Standard Lesotho Bank facilitated complex regulatory approvals, making contracting possible and providing a bid, advance payment, and performance guarantees, along with financing for working capital and assets. It also facilitated approvals necessary to make payments on their contracts.

From the project's inception to the present, Standard Lesotho Bank has assisted international contractors in navigating the local landscape, guiding them through regulations, and ensuring effective payment management. The Bank provided guarantees and other funding solutions, enabling contractors to deliver on the project. Standard Lesotho Bank has also facilitated payments for the unbanked through accounts and the UNAYO platform. In partnership with LHDA, we have provided financial literacy programmes for affected communities and individuals.

Water royalties will nearly double Lesotho’s current earnings, supporting the LHWP’s strategy, which includes hydropower, environmental projects, and other necessary activities. The project is also expected to create approximately 16,000 jobs over its duration, positively impacting Lesotho’s unemployment rate, currently at 16.3%. The construction of infrastructure, such as roads, bridges, and lodges, will enhance the standard of living for communities in Mokhotlong, with additional job creation in sectors like tourism, transport, oil and gas, and retail. The project is also estimated to inject another M1.2billion in spend on local goods and services.

The involvement of Standard Lesotho Bank in Phase II of the Lesotho Highlands Water Project demonstrates a clear example of the widely touted Public-Private Partnerships. This project has offered the Bank an opportunity to finance the project and to offer international expertise in big infrastructure projects.

This collaboration has also leveraged private sector expertise, innovation, and financing to accelerate project implementation and ensure long-term sustainability. The Project is a testament to the purpose of the Bank that says, “Lesotho is our home, we drive her growth.” By digging deep into our resources, we have demonstrated how deep our vision is for Lesotho and her people, emphasising that we believe in this country that we call home and the prospects of growth that look bright for the future.

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