Overview
Lesotho’s power mix is anchored by hydropower and imports from the Southern African shared power grid. Domestic generation (notably Muela hydro) is being complemented by solar IPPs and pipeline hydro and wind IPPs. The policy focus is on energy security, least‑cost generation, and rural access, creating opportunities for grid‑tied renewables, mini‑grids and productive‑use of electrification for agriculture and MSMEs. Several mini-grid electrification projects have been piloted in recent years.
Sector Structure and Key Facts
- Generation: Muela hydropower (grid‑connected) provides a significant share of domestic supply; imports cover the balance.
- Pipeline: Utility‑scale solar PV and wind sites are being advanced for IPP procurement; mini‑grid pilots target remote communities.
- Access: Electrification is increasing; distributed solutions remain essential in highland areas.
- Employment: Construction of IPPs and mini‑grids creates temporary jobs; OandM supports long‑term skilled roles.
Competitive Analysis
Hydrology and elevation support hydro and wind resources; small system size allows fast adoption of modular renewables; appetite for cross‑border power trade via SAPP; improving regulatory clarity under LEWA.
Institutional and Legal Framework
- Ministry of Natural Resources – Department of Energy (DOE) – energy planning and energy policy.
- Lesotho Electricity Company (LEC) – state company for electricity transmission and distribution.
- Lesotho Electricity and Water Authority (LEWA) – electricity tariffs, equipment and services standards regulator.
Incentives and Support Schemes
| Incentive Type | Details |
| IPP Frameworks | Standardised PPAs and regulatory approvals via LEWA/LEC. |
| Import Duty Relief | Exemptions on renewable equipment subject to RSL rules. |
| Results‑Based Financing | Donor‑backed grants for off‑grid/mini‑grid and productive‑use projects. |
Key Investment Opportunities
Utility‑scale solar PV and wind; hybrid mini‑grids for highland communities; CandI rooftop solar; agri‑PV (irrigation, cold‑rooms); e‑mobility charging in logistics corridors.
Other Investor Information:
Grid integration studies and bankable PPA terms are critical; land/site access and community engagement must be managed early.
Compliance and Participation Strategies:
- Obtain generation and tariff approvals from LEWA;
- Interconnect with LEC;
- Comply with EIA and land regulations.
Key Takeaways:
- Strong resource base for hydro/wind/solar.
- The small system enables rapid scaling of modular IPPs.
- Access and productive‑use of electrification are priorities.
Checklist for Foreign Investors
- Secure site/resource data
- Engage LEWA/LEC early
- Structure bankable PPA
- Plan EIA&S and land access