EIB extends €82m loan to Lesotho Lowlands Water Development Project

26th April 2019 By: Marleny Arnoldi - Creamer Media Online Writer

The European Investment Bank (EIB) has signed an €82-million, or 1.3-billion Lesotho Maloti, loan for the Lesotho Lowlands Water Development Project Phase 2 (LLWDP 2).

The project aims to improve access to clean water in four priority areas of the Lesotho lowlands. LLWDP 2 is the second phase of the Lesotho Lowlands Water Supply Scheme that was conceived with technical assistance from the European Union (EU).

EIB also financed the first phase, known as the Metolong Dam and Water Supply Programme.

The LLWDP 2 will increase reliable supply of bulk potable water and sanitation services and strengthen the water authority’s capacity to operate and maintain the infrastructure.

“Lesotho is increasingly feeling the impact of climate change, especially when it comes to extended droughts, as water scarcity constitutes a major barrier to economic development and inclusive growth.

”The water development project in the lowlands aims to provide a sustainable water supply for the local population and is expected to have a positive impact on as many as 300 000 direct beneficiaries, some 15% of the country’s population,” said EIB VP Ambroise Fayolle in a release on Friday.

EU ambassador to Lesotho Christian Manahl noted that improved access to clean water and sanitation was a prerequisite for Lesotho's further socioeconomic development.

“While large quantities of premium water from the country's highlands are exported to South Africa and generate revenues for the Lesotho government's budget, too many people and businesses, predominately located in the lowlands, are still struggling to reliably access clean water and sanitation facilities.

“This has a negative impact on the health situation in the country but also on attracting investments and the creation of jobs. The EU–EIB financing package – the €82-million EIB loan to be blended with a €41-million EU grant – accounts for more than 60% of total project cost, which also includes a World Bank loan,” explained Manahl.

Lesotho Finance Minister Dr Moeketsi Majoro added that the project would contribute to the implementation of the Lesotho National Strategic Development Plans 2012/13 to 2018/19, which identified the provision of water access in the lowlands, where about two-thirds of the population lives, as a severe problem.