New project to provide reliable water supply in Lesotho

MASERU, Lesotho, July 20, 2009 -- The Kingdom of Lesotho's efforts to secure long-term reliable water supply for its people and industry received a welcome boost, thanks to a US$25 million financing agreement...

MASERU, Lesotho, July 20, 2009 -- The Kingdom of Lesotho's efforts to secure long-term reliable water supply for its people and industry received a welcome boost, thanks to a US$25 million financing agreement signed today (with a US$8.5 million grant component) that will benefit Maseru, the capital city and adjoining areas.

"The Government of Lesotho is committed to meeting the challenge of water security as an essential element of our sustainable development strategy," said Hon. Dr. Timothy Thahane, Lesotho's Minister of Finance and Development Planning, at the signing ceremony. "Providing reliable water supply to our industries which account for about 40 percent of the gross domestic product will help us to secure economic growth. And as we know potable water is vital for reducing childhood illnesses." He was joined by Hon. Monyane Moleleki, Lesotho's Minister of Natural Resources, whose portfolio includes energy, mining and water resources.

Rising industrial demand, rapid population growth in urban agglomerations, steadily increasing needs for water and sanitation services, and periodic droughts all point to the urgent need for Lesotho to manage its water resources sustainably.

"The provision of 75,000 cubic meters (m³) of additional treated water will enable Lesotho to meet domestic and industrial requirement in the medium-term," said Ruth Kagia, World Bank Country Director for Lesotho, speaking at the signing ceremony. "The World Bank is pleased to support Lesotho's efforts to harness this critical resource through a multi-donor program."

Lesotho has achieved strong results in the water sector, and over 80 percent of its population has access to safe drinking water. The national utility, Lesotho Water and Sewerage Authority (WASA), established in 1991 is efficiently run and has kept its operating costs below income. Development partners have responded positively with low-interest loans and grants valued at about US$220 million for financing WASA's work program.

"To sustain the gains made, Lesotho needs to build on the prudent management of the water sector by implementing legislative reforms and strengthening of institutions," said Ashok K. Subramanian, World Bank Sector Manager for Water Resources in the Africa Region. "The World Bank looks forward to continued engagement in supporting water sector reforms in Lesotho."

The project, in its second phase, will directly support WASA's efforts to improve water supplies and expand coverage, both in Maseru and other fast-growing urban centers such as Mazenod, Morija, Roma, and Teyateyaneng. When the project is completed in 2012, water supply coverage in Maseru is expected to reach 90 percent, and sanitation coverage is expected to increase from the low level of 15 percent in Maseru and 6 percent in the centers to 20 percent and 10 percent respectively.

"The project financing agreement signed today is testimony to the excellent spirit of cooperation that exists between the Government of Lesotho and its development partners," said Marcus J. Wishart, World Bank Water Resource Specialist and project leader. "We look forward to speedy and effective implementation so that the project can deliver its development outcomes for the benefit people and the environment."

The project is led by Lesotho's Metolong Authority, with the World Bank providing technical support including in the areas of operational and fiduciary safeguards. The bulk of financing is being contributed by Lesotho's development partners such as the Arab Bank for Economic Development in Africa (BADEA), Kuwait Fund, Millennium Challenge Corporation, OPEC Fund for International Development, and Saudi Fund for Development. The European Development Fund supported project preparation, and the Government of South Africa is finalizing its support for the project.

The project is part of the larger, US$284 million Metolong Dam and Water Supply Program (MDWSP) which is the Government of Lesotho's strategic effort to achieve water security in the 21st century.


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