Background History

The Lesotho electricity market today consists of over 52,000 consumers. In 2000, only 20,000 of the estimated 400,000 households in Lesotho, had been connected to electricity since the Lesotho Electricity Corporation (LEC) started opetrations in 1969. In 2001, the Government, therefore initiated a restructuring program of the electricity industry sector. The reforms were meant to address the problems of inefficiency and lack of financial resources in the sector. The restructuring entailed commercialisation and privatisation of the LEC, the establishment of rural electrification structures, making 'Muela hypropower facility prices competitive and the establishment of a regulator.

A restructured electricity industry would need a regulatory body which would regulate the sector in the interests of all electricity sector stakeholders. Hence the Lesotho Electricity Authority (LEA) was established in August 2004. The LEA is set up by the Lesotho Electricity Authority Act, 2002, the LEA Act. The LEA is expected to get funding from licensed electricity operators and a levy paid by electricity customers. However, in the start -up phase it is funded by the Government with the assistance of the African Development Bank (AfDB) and the World Bank (WB). In May 2006, the LEA was officially launched by the Minister of Natural Resources, Dr. 'Mamphono Khaketla. The LEA operates within the context of Government policy and has a duty to help in the realization of the electrification targets as set by the GoL.