Lesotho Highlands Water Project Phase II

<p>The first-phase of the multi-phase Lesotho Highlands Water Project (LHWP) entailed the construction of Katse Dam, Mohale Dams, Matsoku Diversion Tunnel and the Muela hydropower station. Lesotho benefits from a sustainable, independent energy supply for Lesotho that will meet the country's electricity requirements and royalty revenue from the project, while South Africa benefits from the security of supply of high quality water that is transferred into the Vaal River system for domestic and industrial use in the Gauteng province. Phase II of the LHWP will be implemented in terms of two distinct components: a water delivery system to augment the delivery of water to South Africa and a hydropower generation system, which will increase the current electricity generation capacity in Lesotho. The program involves the construction of the Polihali Dam and the Transfer Tunnel in the Mokhotlong district and a hydropower scheme following the conclusion of a joint feasibility studies. As per the provisions of the Phase II Agreement between the Government of the Kingdom of Lesotho and the Republic of South Africa, the implementation of the Kobong Pump Storage scheme or any other hydro scheme was subject to the outcome of a joint feasibility studies. The technical and the economic feasibility studies for the Kobong Pump Storage scheme were completed in 2013. However, the outcome was that further studies should be undertaken. These included, a market study, an integration study, geotechnical investigations and legal and commercial arrangements Lesotho secured funding from the World Bank to undertake the above studies, including convectional hydropower options. These studies are expected to be substantially complete by the end of August 2019 . The further feasiility studies have looked at pumped storage and conventional hydropower options. The decision was taken to defer the pump storage option (due to prevailing economic conditions) and advance the conventional options. This entails one site at Oxbow on Malibamat&scaron;o River and two sites on the Senqu River. . The topography of the region allows for the possibility of developing a hydro-power generation in Lesotho in conjunction with the provision of water supplies to the RSA. For South Africa, construction of this dam and related infrastructure will guarantee the desired level of water availability in Gauteng and the Vaal River system in the most cost-effective manner. In parallel with water conservation measures in the Vaal River, it will also influence the improvement of water quality amongst many benefits. Phase II water delivery and hydropower generation are expected to be commissioned at the same time early in 2026, and the project close out is forecast for December 2028.</p>