Overview
Lesotho is exceptionally endowed with high‑quality water resources relative to its neighbours. The Lesotho Highlands Water Project (LHWP) exports water to South Africa and underpins domestic hydropower. Urban supply and rural access are improving under the Lesotho Lowlands Water Development Project (LLWDP), but investment is needed in bulk conveyance, treatment, non‑revenue water reduction, and irrigation networks to catalyse agri‑business and industrial growth.
Sector Structure and Key Facts
- Resources: Highlands catchments provide reliable flows; Lesotho is a net water exporter to South Africa via LHWP. LLWDP is crucial to urban and peri-urban water supply for industrialisation and agriculture.
- Institutions: Urban water services are managed by the Water and Sewerage Company (WASCO); regulation of water tariffs by the Lesotho Electricity and Water Authority (LEWA).
- Employment: Utilities and construction projects generate skilled and semi‑skilled jobs in operations, engineering and maintenance.
- Demand drivers: Urbanisation, industry (beverages, agro‑processing) and irrigation expansion.
- Trend: LHWP Phase II increases storage and conveyance; NRW reduction programmes target efficiency gains.
Competitive Analysis
Abundant mountain water and gravity‑fed conveyance yield cost advantages in raw‑water supply and hydropower relative to arid regional peers; proximity to Gauteng supports industrial water users; long‑standing treaty frameworks lower sovereign risk for bulk water exports.
Institutional and Legal Framework
- Lesotho Highlands Development Authority (LHDA) – Lesotho Highlands Water Project (LHWP) implementation and management.
- Lesotho Lowlands Water Development Project (LLWDP) – bulk water supply scheme to deliver treated water to supply urban and pery urban areas (Domestic, Agricultural, Institutional, tourism, etc)
- Lesotho Electricity and Water Authority (LEWA) – regulates water tariffs and charges, and service standards.
- Water and Sewerage Company (WASCO) – responsible for water distribution and reticulation in urban and peri-urban areas.
- Ministry of Natural Resources (Water) – water policy and rural water supply and to manage quantity and quality of surface and subsurface water resources.
Incentives and Support Schemes
| Incentive Type | Details |
| PPP/Concession Frameworks | Opportunities for private participation in bulk water, treatment plants and NRW reduction contracts. |
| LNDC Industrial Water Access | Facilitation for water‑intensive industry on estates. |
| Import Relief | Customs exemptions on specialised treatment equipment subject to RSL rules. |
Key Investment Opportunities
Bulk water storage and conveyance; municipal treatment plants and NRW reduction; industrial water recycling; irrigation schemes and on‑farm networks; bottled water and beverages leveraging quality sources.
Other Investor Information:
Tariff setting is regulated by LEWA; projects must meet treaty and environmental compliance; topography raises capex but extends reservoir life and water quality.
Compliance and Participation Strategies:
Engage LHDA/LLWDP/LEWA/WASCO early; structure PPPs with clear performance KPIs; align with environmental and treaty obligations.
Key Takeaways:
- Water endowment is a structural advantage.
- LLWP II creates a scale for bulk users.
- Efficiency and irrigation present investable niches.
Checklist for Foreign Investors
- Assess water rights and allocations
- Structure PPP terms
- Plan water needs
- Build Environmental and Social compliance roadmap