Lesotho secures grant from AfDB to launch 20 MW solar project

The Sustainable Energy Fund for Africa (SEFA), which is managed by the African Development Bank (AfDB) has agreed to provide NEO I SPV Pty Ltd., a subsidiary of OnePower Lesotho Pty Ltd., with a $695,500 grant to finance the preparation of a bankable business case for the development of Lesotho’s first large-scale PV power plant. AfDB’s Africa Climate Technology Centre (ACTC) will cover additional costs for legal services and project implementation support.

SEFA said that the grid-connected PV plant will be installed in the Mafeteng Province and will enable the strategic phase-out of costly power imports from Mozambique and the reduction of imported coal-generated power from South Africa. NEO I SPV Pty Ltd. is the project’s winning developer selected which was selected by Lesotho’s government through a bidding process.

“The Bank will support the structuring of the Project and lead it to bankability. Our ambition is to turn it into a reference solar PV project for the SADC Region,” said AfDB’s director for renewable energy Ousseynou Nakoulima.

The plant, which is part of country’s National Electrification Master Plan (NEMP), is expected to contribute approximately 13% to Lesotho’s maximum system demand of around 150 MW and to decrease power retail prices by replacing 20 MW of imported power from Mozambique.

According to the U.S. Department of Commerce’s International Trade Administration, only around 30% of Lesotho’s households have currently access to electricity, concentrated mainly in urban areas. The government is targeting to increase this percentage to 40% by 2020.

The country’s largest power plant, the 72 MW Muela Hydropower, is currently unable to satisfied demand. The mining sector, on the other hand, is mainly relying on diesel power generators and its sites are not connected to the electricity network.