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South Africa to fund new Lesotho water project including hydro

South Africa's Cabinet has agreed to invest 7.3 billion rand (US$712.6 million) for Phase 2 of the Lesotho Highlands Water Project (LHWP), a giant water supply scheme that will also boost hydropower generation by neighboring Lesotho.

LHWP links a series of dams to transfer water from landlocked Lesotho to help meet growing demand in Africa's biggest economy.

"This project, subject to the conclusion of a protocol with the government of Lesotho, will at a projected cost of 7.3 billion rand include construction of the Polihali Dam in Lesotho," Water Affairs and Forestry Minister Lindiwe Hendricks told reporters December 4.

�Furthermore, the existing hydropower generation capacity of the Lesotho Highlands Water Project Phase 1 can also be increased,� Hendricks said. �The project would bring substantial benefits to Lesotho as well as a regional benefit, as it will mean the prevention of increased carbon emissions. We have been in discussions with the government of Lesotho who are strongly in favor of the project.�

Nearly all Lesotho's locally produced electricity comes from 70-MW Muela Dam, commissioned in 1998 as part of Phase 1 of the Lesotho Highlands Water Project. Since power-strapped South Africa has been rationing power it supplies to Lesotho, its smaller neighbor has been seeking ways to boost generation at Muela and to generate hydro at other sites. (HNN 11/20/08)

Hendricks called Phase 2 a "strategic intervention" to provide more water for the Vaal River system and ensure water security in Gauteng Province, South Africa's commercial and industrial hub that includes Johannesburg and capital Pretoria. The Vaal River system is considered the most important water resource in South Africa, supplying water to 45 percent of the country's estimated 47 million population, as well as to the bulk of power utility Eskom's coal-fired power stations, situated in the northeastern region of the country.

LHWP Phase 2 including Polihali Dam was chosen over a second phase of an existing water transfer scheme from the Thukela River. Hendrick said LHWP Phase 2 has a low energy requirement because water can be transferred by gravity without pumping. The Thukela River option requires the water to be pumped over the escarpment. The additional hydropower benefits also were a point in LHWP Phase 2's favor.

Hendricks said the next steps would require the development of a detailed project implementation plan, to be approved by both countries, and the necessary protocols concluded between the countries. She said capital markets would be tapped to help fund the project.

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