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African bank finances Lesotho small hydro, power supply

The African Development Bank (AfDB) has approved funding for an electricity supply project in Lesotho focusing on renewable energy including mini-hydropower projects. The bank approved a loan and a grant February 4 totaling 11 million Units of Account (US$16.4 million) to support investment in electricity supply infrastructure to enhance electricity access, ensure improved efficiency, and reduce shortages in the small African nation. AfDB said the program is to help reduce poverty and achieve Millennium Development Goals. Electricity production shortages are to be alleviated by exploiting renewable energy sources such as mini-hydropower, and energy conservation and demand management. The program envisages restoration of a 2-MW mini-hydro project to help make up for shortages by 17 MW, which the bank called significant for Lesotho. The low electricity access rate will be addressed by expansion of the transmission and distribution systems in Maseru, Hlotse, Mphaki, and Mantsonyane. The AfDB loan accounts for 72.48 percent of the program cost, with the government and Lesotho Electricity Corp. paying the remainder. 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) In December, South Africa's Cabinet 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 Lesotho. (HNN 12/5/08)

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