An African success story

20 June 2010

The Lesotho Highlands Water Project (LHWP) is a multi-billion Maloti (SA Rand equivalent) [1] bi-national water resources development and management initiative. It was established by treaty signed between the governments of Lesotho and South Africa in 1986, as a priority strategy to reduce poverty, stimulate economic growth and improve the livelihoods of the people of the two countries. LHWP is about harnessing the Lesotho Highlands water behind massive dam walls, diverting the flow and transferring water through tunnels to South Africa, to meet the industrial and domestic water needs of the Gauteng Province, while simultaneously generating hydro power for Lesotho.

Early days

When the idea of transferring water from Lesotho to South Africa was first mooted in the early 1950s by Cape Town-based engineer Ninham Shand, sceptics didn’t give it a chance of ever coming to fruition. Little did they know that by the end of 2008, the Lesotho Highlands Water Project would mark its biggest milestone; a decision by the governments of Lesotho and South Africa to proceed with Phase 2 following the successful completion of Phase 1. Who would have guessed at the time that this would become a truly African success story?

Looking back to the early days of the LHWP, it is clear that water – or rather the lack of it – played an important role in its development. Following the lessons learned from the devastating droughts of the late 1960s, South Africa realised that it had to find an additional, reliable bulk water source to ensure that its industrial heartland was not crippled in future. This led to the creation of a joint technical committee between Lesotho and South Africa in 1978, comprising experts from both countries, which began a full feasibility study.

In 1983, agreement was reached on a more detailed project layout, which required in-depth feasibility studies that were completed in April 1986.

LHWP- the best choice

The studies pointed out the preferred, most feasible and viable option: a four-phased project that would capture the excess flows of the upper Senqu catchment and transfer the water from a series of storage dams via tunnels to South Africa. This daunting project, to be known as the Lesotho Highlands Water Project, would also generate hydroelectricity for Lesotho before delivering the crystal clear mountain water to the homes and industries of South Africa. The project would also create revenue for Lesotho and provide jobs.

Despite the magnitude of the project, compared to the next most viable option it was M2.3B (US$0.3B) less expensive. This benefit was to be split 56/44 between Lesotho and South Africa and Lesotho’s share is paid over 50 years as a fixed royalty. In addition, Lesotho’s comparative advantage stems from the fact that the water is gravity-fed, instead of being pumped to South Africa. The cost equivalent of pumping is paid as a monthly (variable) royalty to Lesotho.

The treaty and its institutions

Obviously, the implementation of the LHWP would impact on the people and environment of the highlands, so the treaty made provision for adequate compensation and mitigation measures.

Being a bi-national project meant that both sides had to be equally represented in decisions that affected the project. For this reason, a joint permanent technical commission (JPTC) was established to monitor, advise, and approve activities towards implementation of the project. JPTC was later renamed the Lesotho Highlands Water Commission (LHWC) and its role was also redefined in accordance with protocol VI of the treaty.

In order to penetrate the highlands with the machines and equipment required for constructing the huge water storage facilities and tunnels, it was necessary to provide modern paved roads, bridges, mountain passes, electricity supply and telecommunications. The local workers and technical staff from all over the world necessitated the provision of housing, schools, shops and canteens. Project authorities created clinics, a specialised casualty ward, landing strips and helipads for any project eventualities. The recreation of workers required sports facilities and electronic communications. The impact of the project on the local population called for new secondary (feeder) roads and bridges to link the surrounding villages to the main roads. In total there were:

• 102km of new tarred roads.

• 265km of new gravel roads.

• 1133km of roads rehabilitated to Grade 1 standard.

• 11 bridges constructed for access to towns and villages.

• Three border crossings built between Lesotho and South Africa (Maseru, Maputsoe and Caledonspoort).

• Five clinics constructed and staffed and one trauma unit at Leribe Hospital.

• 300km of power lines installed.

• More than 300 housing units built in the work camps at Katse, Mohale, Lejone and Likileng.

• Commercial centres constructed at Katse and Mohale.

• Microwave telecommunications provided to Katse and Mohale.

Once the infrastructure was in place, the construction of the main contracts could start. This was done in two sub-phases: 1A and 1B. Phase 1A comprises Katse dam, the ‘Muela hydro power station, ‘Muela dam, the transfer tunnel and delivery tunnels (south and north), as well as the Ash river outfall. Phase 1A was completed in December 1997, and commissioned in January 1998 (except for the hydro power station, which was commissioned in 1999).

Katse is one of Lesotho’s popular tourist destinations and is now home to the highest dam in Africa, Katse dam. Situated at more than 2000m asl, Katse dam is a striking piece of modern engineering. The dam is one of less than 30 double curvature concrete arch dams in the world; one of the world’s ten largest concrete arch dams in terms of its volume; and the highest dam in Africa. It attracts thousands of people who come to admire this engineering marvel each year.

The hydro power plant at ‘Muela, in the northern Botha-Bothe District, was constructed as part of Phase 1A of the LHWP. The major benefit now derived from ‘Muela hydro power station is that Lesotho generates about 70% of her electricity needs.

Technically, the station consists of the 60m x l.30m x 15m underground power house cavern that accommodates three transformers, and three turbine generators rated at 24MW each. The station is fed water by the Katse reservoir via a 45km long concrete lined transfer tunnel measuring 4.35m in diameter.

On the surface, there is the operation building that houses the control room to monitor and operate the ‘Muela hydro power station and the LHWP. The building also houses operation and maintenance staff offices and workshops.

After water has passed through the turbines, it is then discharged through the draft tubes and concrete lined connection tunnels into a 40m high downstream surge chamber and through a 1.7km long tailrace tunnel into ‘Muela reservoir. From the reservoir, water is conveyed by delivery tunnels via ‘Muela intake structure to the tunnel outlet at Ash river in South Africa. Finally, water flows into the Vaal dam.

Phase 1B – Mohale dam

Phase 1B comprises Mohale dam, the interconnecting tunnel, Matsoku weir and the Matsoku tunnel. This sub-phase was completed in December 2003 and inaugurated in March 2004.

Designed as a concrete faced rockfill embankment, Mohale dam is constructed at the confluence of the Senqunyane and Likalaneng rivers. The dam allows for abstraction and diversion of waters from the Senqunyane river through a 32km interconnecting tunnel from Mohale reservoir to Katse on the Bokong arm. Similarly, water can be drawn from Katse into Mohale dam.

Socio-environmental impacts

Any development project impacts directly on the lives of people and the environment. The aim of the LHWP has been to minimise the impacts, ensure fair compensation for any losses and to mitigate any impacts on the environment.

The environmental action plan (EAP) for Phase 1 evolved as the project developed. Many lessons were learned in Phase 1A and these were implemented in Phase 1B. Four aspects of the comprehensive EAP have formed the cornerstone of the compensation and mitigation measures:

• Natural Environmental and heritage.

• Development.

• Public health.

• Compensation and resettlement.

Natural Environment and Heritage

Since its inception, the LHWP has made a significant contribution to sustain and enhance biodiversity in Lesotho by means of community programmes to raise awareness of environmental management and conservation issues.

A diminutive indicator fish species, commonly known as the Maloti minnow, inhabits the upper reaches of the Senqu river system. The Jorodane river that flows into Mohale dam was one of its favourite habitats. To protect them from predators like trout, some minnows have been translocated to sanctuaries outside the Mohale dam catchment, while additional measures are being considered.

The LHWP has also been responsible for the establishment of two nature reserves namely Bokong and Ts’ehlanyane National Park. The formal proclamation of these reserves more than doubles the area of protected natural habitat in Lesotho.

The Liphofung Cave is a cultural heritage site developed by LHDA near ‘Muela dam. LHDA developed a visitor’s centre incorporating a display of the cultural history of the Basotho and Bushmen rock art, along with a craft shop and overnight accommodation.

In order to avoid incompatibilities between competing land uses around the LHWP reservoirs, integrated catchment management (ICM) has been put into practice. The objectives are to reduce degradation of the natural environment and soil erosion, which would impact on water quality and increase sediment deposition. Overgrazing, one of the main contributing factors to rapid soil erosion, is being countered through the establishment of range management associations around Katse and Mohale.

The highlands is of a high altitude grassland biome type, and supports very few trees. The increasing pressure on remaining woodland resources due to the impoundment of the LHWP reservoirs could have led to rapid environmental degradation. To offset this, thousands of tree seedlings have been provided and planted in the catchments through a community forestry programme.

The construction of any dam or any other in-channel water storage structure reduces the volume of water available downstream. This impacts on the aquatic and riverine ecosystems, as well as the social needs of the downstream communities.

The relatively small downstream impact on a large number of people (tens of thousands) had not previously been studied. On the LHWP, the downstream affected people have been consulted about the potential impacts of the project on their livelihoods and compensated where possible for any losses in such a way as to restore their livelihoods. Individuals, families and communities who lived inside the dam basins, below power lines, and anywhere they were at risk from construction, were resettled while others only lost arable land and grazing.

Resettlees received new houses to modern building standards according to the size of their original dwellings. Affected families receive annual compensation for arable land lost, based on a generous production estimate; either in cash or in kind (maize and beans), at the discretion of the recipient. The choice can be changed annually. Families can choose to commute their annual compensation payments to a lump sum that can be invested in income-generating enterprises based on a viable plan. Compensation for loss of rangeland is paid into a fund that can be used to fund community-based development projects.

Development Programme

To reduce poverty and achieve sustainable livelihoods, LHDA introduced a food security programme aimed at improving subsistence farming and introducing high value crops with a high yield per acre and a high market value. The project assisted hundreds of households to obtain and plant fruit trees, while thriving vegetable gardens have become the pride of most resettled households. Rangeland management and stock improvement are dual strategies that are being implemented by the LHDA in order to improve livestock incomes, while protecting the catchment areas from overgrazing.

Public Health

For primary health care and occupational safety, LHDA established clinics at all the relevant construction sites. It also established public health teams of trained nurses at Katse, Lejone, ‘Muela and Mohale to work with and support the local health infrastructure. All the villages around the reservoirs are being provided with potable water, while individual households and schools are provided with toilets. 


During the implementation of Phase 1, thousands of people at the construction sites and across Lesotho benefited directly or indirectly. Phase 1A was technically complex and required a large variety of specialised skills.

For Phase 1B the focus was on job creation, maximising the contracts awarded to Basotho contractors and consultants, and finding local sources for the provision of goods and services.

The success of this endeavour is visible in the fact that several viable local consultancies have developed, a large number of local contractors have built up sustainable businesses and the local capacity for implementing further phases of the LHWP has increased dramatically.

The contribution of the LHWP to the economic activity of Lesotho has been remarkable. As shown above, royalties, the sale of electricity, construction activities and revenue have provided an important economic boost to Lesotho.

It is calculated (2002) that the project’s contribution to the economic activity of Lesotho was 5.4% of the GDP. However, if measured against the Capital Account of the Balance of Payments, the impact is even more profound: M585M (US$79M) of a total of M865M (US$117M) of the positive balance could be attributed to the LHWP. A stunning 68%.

The water from the LHWP is used in six provinces of South Africa. It cools the Eskom power stations in Mpumalanga, keeps Sasol and the Free State gold mines operational, supplies the vast industries and sprawling urban areas of Gauteng, provides life to some of the southern towns of Limpopo and the platinum mines of the north west, as well as the diamond mines and people of Kimberley and surrounding areas. Under drought conditions, emergency water can, and has been, transferred to the Caledon river and to the Eastern Cape and southern Free State through the BloemWater network.

Lessons learned

The early involvement of the World Bank has been beneficial in many ways. It lent credibility to the project and also greatly assisted the engineering and environmental aspects of the project through the engineering and socio-environmental panels of experts.

The oversight and implementation responsibilities on a large development project should be clearly delineated and be separate functions. Costs and benefits need to be shared in an equitable and clear manner. Contracts and financing arrangements require careful planning. Tight procurement processes should be institutionalised to prevent corruption, while whistle blowing should be encouraged.

The treaty provision to maintain ‘the welfare of the persons and communities directly affected by the project’ is a powerful guiding principle for socio-environmental policies. Experience has shown that socio-environmental programmes require careful planning, rigorous implementation, and phased exit strategies that are clear to all concerned. It is important to do the environmental impact assessments and action plans before any construction starts.

At the same time, resettlement and compensation policies should be clear, transparent and adaptable. Communication channels to the affected communities need to be established and utilised at the outset. A rigorous complaints procedure has to be in place too, so that any concern or grievance can be dealt with as soon as possible. Compensation officers have to be empowered to settle minor claims immediately.

Phase 2

The agreement to proceed with implementation of Phase 2 was announced by Lesotho and South Africa in December 2008. The formal implementation agreement is yet to be signed by governments of the two countries on the date to be determined once the necessary ground work has been completed. The signing of the agreement will be the culmination of intensive preparatory work by a joint task team comprising Lesotho and RSA senior officials, established to negotiate Phase 2 on behalf of the two governments. The negotiations commenced on 29 August 2008.

In terms of infrastructure, Phase 2 involves construction of:

• A 60km access road.

• The 165m high, 2.2Mm3 capacity Polihali dam at Tlokoeng (some 5km downstream of the confluence of the Senqu and Khubelu rivers) in the Mokhotlong district, in Lesotho.

• A 38km long tunnel from Polihali discharging into the Katse reservoir.

• A 45km long parallel tunnel from Katse intake tower to ‘Muela. The alternative is a 73km long tunnel direct from Polihali to ‘Muela.

Planning studies and procurement of consultants and contractors will commence from mid 2010 to enable construction work to begin in 2011 resulting in completion around 2017, while the commissioning of water delivery is scheduled for 2018.

The cost of Polihali dam and tunnel, including roads, electricity and water supply, as well as social and environmental aspects to be borne by RSA is estimated at M7.3B (US$0.9B). The total cost of the hydro power components to be financed by Lesotho may range from M4.5B to M6B(US$0.6B to US$0.8B). Lesotho will decide which of these components are undertaken, depending on the availability of funding – ie the hydro power projects will be done in phases.

When fully functional, Phase 2 will augment the existing LHWP supply of water to the Vaal river water supply area in RSA. By the same token, Phase 2 is expected to increase the existing hydro power generation capacity in Lesotho to the benefit of both local and regional consumption. Hydro power capacity improvements to be considered by Lesotho as part of Phase 2 include erecting stations powered by downstream water releases at Polihali, Katse and Mohale, as well as expansion of the ‘Muela hydro power station.

On the social and environmental front, an estimated 3312 families or 16, 560 people from 72 villages will be affected and compensated accordingly.

Economically, thousands of Basotho will be recruited during the construction period. Noteworthy is that unskilled work will be reserved for locals, especially villagers within the project area, while semi-skilled and skilled work will be sourced locally first, and only if the skills are not available in the area then these will be sourced from the rest of Lesotho and subsequently RSA.

Funding of Phase 2 is predominantly loans sourced from capital markets. The Lesotho Highlands Development Authority (LHDA) is responsible for implementation of the project, under the direction of the Lesotho Highlands Water Commission (LHWC), as representatives of the two governments.

Success story

Over the past 23 years, the LHWP proved the case for peaceful bilateral co-operation in Africa and the world. It has successfully delivered on all its promises: high quality water, electricity, revenue, fair compensation, environmental protection, a springboard for ancillary development and high quality infrastructure to benefit the local inhabitants and visitors. It has fearlessly and successfully fought corruption and will continue to do so. It embodies the principles of the economic development programme for the African Union (NEPAD), plus Africa’s aspirations for its own renaissance.

This, truly, is an ongoing African success story. From humble beginnings marked by uncertainties, today we see a glowing light at the end of the tunnel indicating that a bright future is on the near horizon, and certainly within reach.

Motlatsi Nkhasi, Lesotho Highlands Development Authority (LHDA), Email or

George van der Merwe, Communications strategist/consultant, Email:

Note: [1] M represents the Lesotho currency Maloti which is pegged to the South African rand on a 1:1 basis


Katse dam
Mohale dam

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