The electricity network in Lesotho is limited with the supply of electricity being dominated by two entities, namely the Lesotho Electricity Company (LEC), which is the monopoly transmitter, distributor and supplier of electricity, and the Lesotho Highlands Development Authority (LHDA), which is the main generator of electricity through its Muela Hydro Power Station.
The Meula Hydro Power Station is part of the Lesotho Highlands Water Project and the Lesotho Highlands Development Authority (LHDA) has the mandate to generate electricity. In turn, the Lesotho Electricity Company (LEC) has the mandate to transmit and distribute electricity, bulk electricity supply, and management of off-grid stations.
Around one quarter of the population is provided with access to the grid and most of Lesotho’s power is provided by the Meula Hydro Power Station but this cannot meet the national demand and the shortfall is supplied from South Africa and Mozambique.
However, supply constraints within Southern Africa are making it more difficult for countries like Lesotho to import power and for that reason Lesotho needs to expand its own capacity if it is to avoid serious load shedding problems in coming years.
According to the LEC’s projections, peak power demand is expected to grow in a great manner over the years. So, for improved coordination of electrification efforts, the government is preparing an Electrification Master Plan (EMP) that articulates the role of grid electrification and off-grid electrification in meeting the national access targets.
The government through the Sustainable Energy For All Project, developed strategies and a regulatory framework to promote private investment in mini-grids (and energy centres), streamlining and simplifying policy, regulatory, legislative and financial instruments for renewable energy-based isolated mini-grids for rural electrification. Therefore, accelerating the electrification programme in Lesotho is a key policy position of Government.
The electricity sector is regulated by the Lesotho Electricity and Water Authority (LEWA). LEWA has the mandate to promote the expansion of electricity supply in Lesotho ensuring that it is economically viable and cost-effective and to ensure the operation and development of a safe, efficient, and economic electricity sector; protect the interests of all classes of electricity consumers as to the terms, conditions, and price of supply; and ensure that electrification is accelerated.
The current regulatory frameworks covered grid-connected power production, but not mini-grids or other off-grid options such as renewable energy. However, these frameworks did not cover mini-grids.
The Mini-Grid Power Generation, Distribution and Supply Regulations, 2021 (the “Regulations”) were thus enacted in order to provide certainty to suppliers while at the same time protecting the interests of electricity customers. In terms of these Regulations licences may be issued to all regulated entities in the electricity and urban water and sewerage services by LEWA.
There are specific requirements to obtain a license, as provided for in Part III of the Regulations and there are 3 categories of mini-grids, depending on their generation capacity and these are all outlined in the Regulations.
Mini-grid systems may offer a cost-effective alternative to grid extension over large distances to sparsely populated areas with low electricity demand. Lesotho does not have the resources to fund development itself so there is an open call for investors.
Please get in touch with our corporate commercial team for further information as regards the new developments regarding renewable energy.
This article was written by Palesa Nkoho. Palesa is an Advocate of the High Court of Lesotho.