Mohloai Mpesi
THE Lesotho Electricity Company (LEC) owes the Lesotho Electricity Generation Company (LEGCO) over M70 million, Parliament has heard.
LEC Managing Director, Nathaniel Maphathe, revealed this before the Public Accounts Committee (PAC), stating the debt relates to electricity supplied by LEGCO through the Ramarothole Solar Project.
The PAC had summoned LEC and other officials to respond to concerns raised in the Auditor-General’s reports.
The Ramarothole Solar Project, in its first phase, produces 30 megawatts of power, while the planned second phase is expected to generate an additional 50 megawatts with an eight-megawatt storage capacity. The project was constructed by a consortium of two Chinese companies; Sinoma and TBEA, and financed by the Export-Import (Exim) Bank of China.
Phase I was signed on 19 February 2020, with Exim Bank providing a loan of CNY481,488,500 (approximately M996,681,195).
During the session, Basotho Action Party (BAP) leader, Professor Nqosa Mahao, asked Ministry of Energy Principal Secretary (PS), Tankiso Phapano, whether LEGCO had generated any income since its formation.
In response, PS Phapano said LEGCO had not collected any revenue directly from the Ramarothole project. Instead, it had been supported by the government to meet requirements for the project’s second phase.
“LEGCO was established specifically to manage electricity generation from Ramarothole,” Mr Phapano said.
“The ultimate goal is for LEGCO to manage all generation projects in the country, not just Ramarothole. But since its formation, the only revenue it received was last year, through a government levy to ensure it qualifies for the next phase.”
PAC chairperson, Machabana Lemphane-Letsie, questioned whether LEGCO was selling electricity to LEC. Mr Maphathe confirmed this, reiterating that LEC currently owes LEGCO over M70 million.
“My understanding is that from the day Ramarothole began supplying electricity to LEC, payments were supposed to be made,” said Ms Lemphane-Letsie.
“It is over M70 million,” Mr Maphathe responded.
His response was met with laughter in the chamber, as MPs expressed frustration over LEC’s mounting debts.
LEC is already in arrears with Electricidade de Moçambique (EDM), which has since cut off supply. Eskom of South Africa is also reportedly considering terminating its supply due to unpaid bills and LEC also owes the ‘Muela Hydropower Station.
“I do not know what kind of animal LEC is. It owes EDM, which has already cut off supply. It owes Eskom, which is about to follow suit. It owes ‘Muela. And now it owes Ramarothole as well,” said Ms Lemphane-Letsie.
Prof Mahao further inquired whether an Environmental Impact Assessment (EIA) had been conducted before the commencement of Ramarothole Phase I.
Responding to this, a Ministry of Finance and Development official, one Letooane, admitted that no EIA had been carried out prior to construction.
This response infuriated the committee. Revolution for Prosperity (RFP) legislator for Matala, Tšeliso Moroke, expressed concern that the lack of an EIA had already led to serious environmental degradation, including the formation of deep erosion gullies (dongas) which the government had to repair at significant cost.
“The Phase I of Ramarothole resulted in dongas that cost the government M27 million to fix,” Dr Moroke said.
“You proceeded with Phase I without conducting an Environmental Impact Assessment. That is a fundamental environmental oversight.
“You are unable to proceed with Phase II because of the foundational errors made in Phase I. The absence of environmental studies and the lack of an EIA clearly resulted in these problems. This confirms that the Ministry failed to perform due diligence before implementing the project.”
