European Investment Bank assesses Metolong project

MASERU — A delegation from the European Investment Bank (EIB) was in Lesotho recently to carry out due diligence and appraisal of the Metolong Dam and Water Programme.
In a statement to the media, the Ministry of Natural Resources said the EIB team was led by Rasmus Lauridsen.
The purpose of the visit was to carry out due diligence “with a view to financing the construction of the downstream water conveyance system which links the water treatment works located at the Metolong dam site and Maseru, Mazenod, Roma and Morija”.
In an interview with the Lesotho Times on Tuesday, Metolong Authority legal services manager, Thabiso Mohapi, said the government was seeking to increase the number of partners for the financing of the Metolong project as a precaution against risks.
“The EIB came into the country to assess and make their appraisal on the Metolong project. In a way this was a fact-finding mission by the EIB team,” Mohapi said.
Mohapi said the US$315 million set aside for the project was still sufficient to see the whole project through.
“Due to the fluctuations in the financial markets between the US dollar and the loti, and should there be an increase in the general construction works due to inflation it becomes necessary to cater for any downfall as a precautionary measure,” Mohapi said.
He said the process of bringing in more financing partners began in January this year and a number of potential partners including the EIB, which is under the European Commission, had shown an interest in the project.
According to Mohapi, the appraisal of projects by financing partners was not unique to Metolong.
“Every partner makes an assessment whenever they plan to finance a certain project,” Mohapi said.
He said the EIB was in talks with the Ministry of Finance and the Ministry of Natural Resources about the strategic needs of the Lesotho water and power sectors.
The EIB will make its final decision on filling in the financing gap of the Metolong programme by January next year.
Mohapi said the actual construction of the Metolong Dam and the conveyance system is expected to commence in the first quarter of 2010.
“Currently we are in the pre-qualifying process with the conceptual design of the operational facility being in the final stages,” he said.
The current financiers of the project include the government of Lesotho, the Kuwait Fund, Arab Bank for Economic Development in Africa, the OPEC Fund, the Saudi Fund Consortium, the Millennium Challenge Corporation, the World Bank and the Republic of South Africa, through the joint bilateral co-operation commission.