MASERU — Finance Minister Timothy Thahane on Monday signed a US$25 million agreement with the World Bank for financing the Metolong project.
Thahane signed the agreement with World Bank country director for Lesotho, Ruth Kagia.
The agreement includes a US$8.5 million grant while the remaining US$16.5 million will be a soft loan which will be paid over 40 years.
Thahane said the project will help provide clean water in Maseru and the adjoining areas.
“The government of Lesotho is committed to meeting the challenge of water security as an essential element of our sustainable development strategy.
“Our industries account for about 40 percent of the gross domestic product so providing reliable water supply to the industries will help us to secure economic growth,” Thahane said.
Natural Resources Minister Monyane Moleleki was also present at the signing ceremony.
Said Moleleki: “There will be a component of the pipeline which will transport water all the way from Metolong to TY and all the people within a striking distance of the pipeline will benefit from the project.”
In its second phase the project will directly support WASA’s efforts to improve water supplies and expand coverage in Maseru, Morija, Mazenod, Roma and Teyateyaneng. When the project is completed in 2012 water supply in Maseru is expected to reach 90 percent.
Sanitation coverage in Maseru will increase to 20 percent up from the current 15 percent.
Kagia said additional treated water will enable Lesotho to meet its domestic and industrial requirements in the medium term.
She also said exports in Lesotho account for about 40 percent of the gross domestic product, so there is a need to meet the demand of the industries.
“The World Bank is pleased to support Lesotho’s efforts to harness this critical resource through a multi-donor programme. The population of Maseru has increased by 5.5 percent as a result of industries, compared to 3.8 percent of economic growth, so it is important to supply treated water to the labour force working in the industries and around Maseru,” said Kagia.
This project is part of the larger, US$284 million Metolong Dam and Water Supply programme.
It is led by the Metolong Authority, while the World Bank provides technical support in areas such as operational and fiduciary safeguards.
Much of the financing is being contributed by Lesotho’s development partners such as the Arab Bank for Economic Development in Africa, Kuwait Fund, Millennium Challenge Corporation, OPEC Fund for International Development and Saudi Fund for development.
The European Development Fund supported the project preparation, while the government of South Africa is finalising its support for the project.