URBAN DISTRIBUTION REHABILITATION & TRANSMISSION EXPANSION PROJECT
- Reference: P-LS-FA0-003
- Approval date: 14/12/2016
- Start date: 18/07/2017
- Appraisal Date: 29/10/2015
- Status: OngoingOnGo
- Implementing Agency: MINISTRY OF FINANCE
- Location: Maseru, Lesotho
The Urban Distribution Rehabilitation and Transmission Expansion Project, comprising refurbishment of switching stations and transmission lines; the construction of an 8 km, 132kV transmission line and expansion of the Khukhune substation, aims at improving the reliability and quality of electricity supply to existing customers in Lesotho. The upgraded and reinforced electric power distribution system will result in reduction of losses and outages of 2% and 25% respectively, and an increase of 5% in the system availability. The rehabilitation of the switching stations in the main load centre, Maseru, will reduce interruptions in supply and have positive impacts on the entire countywide distribution network which would enable expansion of access to various parts of the country in the near term.
ATransmission Upgrade and Distribution System Rehabilitation(UA 7 ,632,357) "Refurbish 39km of 33kV line from M/Hoek to Quthing and 149km of 33kV line from Mazenod to Thaba Tseka through installation of spherical dampers to minimise line swings and instability of the transmission towers and relocation of parts of the line. "Rehabilitation of 13 switching stations in the municipality of Maseru, one in St Agnes Teya-teyaneng and one in Muela. "Upgrade of the Khukhune 88/33 kV substation by adding 2x30 MVA transformers, construction of 8km of 132 kV transmission line from the Muela Hydropower Station to link the 88 kV transmission line from South Africa at the substation.
BCivil works(UA 511,855) "Civil works to refurbish buildings housing the switching stations.
CTechnical Assistance(UA 414,460) "Electricity Cost-of-Service Study to provide a basis of gradual transition of existing electricity tariffs to economic cost reflective tariffs to promote economic efficiency and viability of the Lesotho power sector. "Preparation of an Energy Resources Map based on the review and consolidation of existing information on renewable energy resources. The review and consolidation should cover solar, wind, and hydropower resources.
DProject Management and Supervision (UA 976,083) "Project management and supervision "Financial audit "Implementation of environmental management plan "Project management and supervision consultant "Youth apprenticeship programme
The purpose of the project is to improve the reliability and availability of the power distribution network to enhance quality of supply to existing consumers, including, specifically, the Letseng diamond mine, and to provide a basis for gradual transition of existing electricity tariffs to economic cost of service reflective levels in Lesotho. The improvement in the reliability and availability of the distribution network is to be achieved through rehabilitation of existing electricity supply switching stations, primarily in the municipality of Maseru, rehabilitation of some 33 kV lines, substation upgrade and construction of a 132 kV line to augment supply. The project will also conduct an electricity cost-of-service study and preparation of an energy resources map.
The Bank's Country Strategy Paper (2013-2017) is focused on two pillars. Pillar I is infrastructure development aimed at creating conditions for private sector development and pillar II is institutional capacity building aimed at improving governance and accountability. The proposed intervention is consistent with the first pillar, infrastructure development, and supports the national objectives of increased access to reliable electricity to support economic growth for poverty reduction. The proposed project was identified during the preparation of the Country Strategy Paper as one of the Bank's lending interventions. The Bank received the formal request for financial assistance from the GoL through a letter dated 26th January 2015.
The intervention is well aligned with the current Bank's Energy Sector Policy whose objectives are to:
(i) support Regional Member Countries (RMCs) in their efforts to provide their populations and productive sectors with access to modern, affordable and reliable energy services; and
(ii) assist RMCs in developing their energy sector in a socially, economically and environmentally sustainable manner. It is also closely aligned to the ADF 13 (2014-2016) priorities and Bank's Ten Year Strategy (2013-2022) objective that focuses on inclusive and green growth. The project is also consistent with the "High-5s" as it contributes to the achievement of three of the five "High-5s" objectives; light up and power Africa; industrialize Africa (making electrical power available for the creation of small and medium-sized industries); and improve the quality of life of Africans. The project will result in an increase in energy available for consumption from the reduction in technical losses associated with the rehabilitation of 13 switching stations, 188 km of 33 kV lines. This will facilitate the connection of new customers in future which are not covered within the scope of this project. The Khukune substation will be upgraded through the addition of 2x30 MVA transformers and 8 km of 132KV transmission line linking the substation to the Muela power plant. This will provide reliable power to Letseng mine, Mokhotlong town and the Lemphane mine in the near future. Through ensuring a reliable energy supply, the project will provide a platform for increased economic activities thereby c reating more employment opportunities for inclusive growth. Additionally, ensuring the supply to the diamond mine and thereby reducing the need to run the backup of diesel powered generation curtails greenhouse gas emissions. The project also includes a program on youth apprenticeship in line the Bank's strategy on creating jobs for Youth and Equipping Youth in Africa.
The intervention is also complimentary to the recently completed Lesotho Electricity Supply Project which sought to support investment in the electricity supply infrastructure to enhance electricity access rate; ensure improved efficiency to reduce peaking shortages and therefore assist the country to reduce poverty and achieve the Millennium Development Goals. In addition, the intervention on preparation of the Energy Resource Map complements the Bank assistance, to the Lesotho Electricity and Water Authority, which developed a regulatory framework to facilitate private development of renewable energy generation.
The project will result in
(i) increased power availability and quality thus resulting in an increase in economic activities which are currently impaired by the lack of reliable electricity supply;
(ii) increased power distribution system availability, and
(iii) reduced losses and power outages. The project also includes a technical assistance to carry out an electricity cost of service study and prepare an energy resources map. The Result Based Logframe of the project reflects the performance indicators for the project at input, output and outcome levels. Key among them are:
(i) for the outputs: number of switching gears rehabilitated; kms of 132kV constructed and 33kV line rehabilitated; number of substations upgraded and number of studies produced;
(ii) for the outcomes: increased distribution network availability; reduction of technical losses at switching stations; and increased available energy for consumption. During appraisal and post appraisal the sources of data for these indicators were confirmed to be the LEC Quarterly and Annual Reports, the quarterly progress reports from the implementing agencies.
KANONDA Farai Epiphanius - RDGS1