Civil Groups Raise Alarm Over Lesotho Highlands Project Costs
Civil society groups say the project’s cost escalation has become a major public-interest issue.
MASERU, Lesotho— Civil society organizations have raised concerns over rising costs, environmental harm and accountability gaps in Phase II of the Lesotho Highlands Water Project (LHWP), calling for urgent reforms to safeguard affected communities, writes Winston Mwale.
In a joint media statement issued Monday, the Civil Society Forum of the New Development Bank (CSF), AFRODAD and the Seinoli Legal Centre said the multibillion-rand project has exposed indigenous communities to displacement, inadequate compensation and environmental degradation.
The LHWP, established under a 1986 treaty between Lesotho and South Africa, exports water from Lesotho’s highlands to South Africa’s industrial hub while generating hydroelectricity and royalties for Lesotho.
Implementation agencies include the Lesotho Highlands Development Authority and South Africa’s Trans-Caledon Tunnel Authority. Financing is provided by development finance institutions such as the African Development Bank, the New Development Bank and the Development Bank of Southern Africa, alongside private investors.
Phase II, which includes the construction of the 165-meter-high Polihali Dam and a 38-kilometer transfer tunnel linking the Polihali and Katse reservoirs in Mokhotlong District, is now scheduled for completion in 2028 after significant delays.
Civil society groups say the project’s cost escalation has become a major public-interest issue.
Initially budgeted at 8 billion rand ($430 million at current exchange rates) in 2008 — about 19 billion rand in inflation-adjusted terms — the cost has reportedly surged to approximately 53.3 billion rand ($2.8 billion).
“Development cannot be measured only by concrete poured or loans secured. It must be measured by whether communities are safer, livelihoods are stronger and whether rights are protected,” said Mosa Letsie, a lawyer with Seinoli Legal Centre.
The organisations allege that Phase II has led to unfair evictions, delayed and gender-blind compensation, and increased risks of sexual and gender-based violence linked to labour influx during construction.
They say these impacts disproportionately affect women, girls and vulnerable groups.
Riska Koopman of AFRODAD said the ballooning costs raise concerns about debt sustainability and transparency.
“South Africa deepens its debt, while Lesotho bears non-economic costs that are not calculated, including reduced grazing land and increased inequality,” Koopman said.
The groups also questioned the effectiveness of environmental and social safeguards by financiers, including the African Development Bank and the New Development Bank, arguing that policy commitments have not consistently translated into meaningful protections at the project level.
They called on the governments of Lesotho and South Africa, implementing agencies and financiers to ensure transparent public reporting on financing, fair and timely compensation, gender-responsive safeguards and accessible grievance mechanisms throughout the project cycle.
The statement said concerns surrounding LHWP reflect broader risks associated with mega-infrastructure projects across the Global South, particularly where oversight and accountability mechanisms are perceived as weak.