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 will 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). Funding for rural electrification projects will be the responsibility of the National Rural Electrification Fund. 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 intends implementing a regulatory framework which provides certainty to suppliers while at the same time protecting the interests of electricity customers.