MASERU — The Saudi Fund for Development has injected a US$26.2 million (approximately M217 million) for the construction of Metolong Dam.
Finance Minister Leketekete Ketso and the Saudi Fund for Development Managing Director Yousef Al-Bassam yesterday signed the agreement for the soft loan.
Speaking at the signing ceremony Finance Minister Leketekete Ketso said the soft loan is an addition to the US$177.93 million (approximately M1.5 billion) given to the government in 2007.
“The estimated costs associated with the construction of the dam to ensure the completion of this important project are now in excess of the amounts that had been committed under the existing loan arrangements,” Ketso said.
“The cost escalations are due to a variety of factors, primary of which is increasing construction costs linked to the Fifa World Cup in South Africa and a weakening of the US dollar.”
Ketso said the government had entered into agreements for funding the design and construction of the dam and raw water pump station with various financiers.
Ketso said this additional assistance brought new hope that Lesotho will meet its Millennium Development Goals.
“Lesotho has achieved strong results in the water sector, and over 80 percent of its population has access to safe drinking water.
“Metolong Dam will respond positively to our industrial demand which currently accounts for about 40 percent of the gross domestic product,” he said.
Under the programme, five towns — Butha-Buthe, Hlotse, Mohales’ Hoek, Mafeteng and Qacha’s Nek — will receive clean drinking water and improve the people’s social and economic welfare.
Ketso said the project is intended to increase water supply in these towns as well as improve and extend the transmission and reticulation systems.
“The project will directly support Water and Sewerage Company (Wasco)’s efforts to improve water supplies and expand coverage in fast-growing urban centres of Lesotho,” he said.
AL-Bassam said the amount of these development loans is allocated for financing two vital projects in the water sector, namely Metolong Dam Project and five towns water supply project.
“These two projects aim to provide reliable drinking water to fulfill the consumption, agricultural and industrial demand in the capital city Maseru and five other towns, with their surrounding villages to enable the government to achieve its target of improving the socio-economic development of rural population,” he said.