The electricity
industry in Lesotho is dominated by two state
owned entities, namely the Lesotho Electricity
Company(LEC), which is the monopoly transmitter,
distributor and supplier of electricity, and
the Lesotho Highlands Development Authority
(LHDA), which is the main generator of electricity
through its ‘Muela Hydro Power Station.
The generating station is part of the Lesotho
Highlands Water Project.
Changes
took place in the electricity industry in the
post-2000 period, when, as part of its programme
on the restructuring of state-owned assets,
the Government decided that LEC would be privatised,
while ‘Muela hydro generation would be
ring-fenced within the LHDA to ensure that its
costs were known.
Accelerating
the electrification programme in Lesotho is
a key policy tenet of Government. LEC is supposed
to be responsible for electrification within
its service territory. Outside the LEC service
territory, rural electrification efforts are
currently managed by the Rural Electrification
Unit (REU) of the Department of Energy (DoE).
The LEA has set up a Universal Access Fund whose
operations are expected to start once all requirements
have been fulfilled. The Fund will disburse
monies for purposes of subsidizing the capital
costs of electrification in the country especially
in rural areas. At the moment the source of
the money to the fund is the electrification
levy from the Lesotho Electricity Company (LEC).
The Fund will receive and disburse funds for
the purpose of subsidising the capital cost
of electrification in areas outside of the service
territory of LEC, with the goal of facilitating
the development and expansion of electricity
service infrastructure in areas where there
are no services and to provide access to the
greatest number of users.
All these
have significance for the LEA’s regulatory
role and responsibilities. The LEA has a significant
role to ensure that electrification is accelerated.
The LEA is currently implementing a regulatory
framework which provides certainty to suppliers
while at the same time protecting the interests
of electricity customers.
