New Development Bank pumps R3.2bn into dam project

New Development Bank pumps R3.2bn into dam project

September 1, 2023

The New Development Bank (NDB) and Trans-Caledon Tunnel Authority (TCTA) have signed a R3.2-billion loan agreement for the implementation of Phase II of the Lesotho Highlands Water Project (LHWP).

The NDB will provide a project loan of R3.2bn to TCTA under the sovereign guarantee of South Africa.

NDB vice president and chief operating officer Vladimir Kazbekov, and TCTA chief executive Percy Sechemane, signed the agreement on the sidelines of the Brics Summit in Johannesburg.

TCTA, a state-owned entity in South Africa charged with financing and implementing bulk raw water infrastructure projects, will use the funds to construct the Polihali Dam and reservoir, a 38-kilometre-long water transfer tunnel, roads and bridges, telecommunications infrastructure, and will extend electricity and other development infrastructure to Lesotho.

By increasing the yield of the Vaal River Basin by almost 15% in the long run, the project will support economic growth and foster sustainable livelihoods of 15 million people in Gauteng (25% of the total population of the country), which is responsible for 36% of the country’s GDP. North-West, Mpumalanga and Free State provinces will also benefit directly from the project’s increased water supply.

The project will be co-financed by NDB, the African Development Bank and other financiers.

Kazbekov said the agreement was a milestone for its implementation.

“This is the first project financed by the NDB outside of Brics countries and it supports South Africa’s commitment to ensure the availability and sustainable management of water, as promoted by Sustainable Development Goal 6.  This project exemplifies NDB’s dedication to supporting projects that promote access to clean water while prioritising sustainable management of water resources.”

TCTA executive manager for project finance and treasury, Nhlanhla Nkabinde, said the partnership between the organisation and NDB was pivotal.

“It is an emblem of our shared commitment to sustainable progress and the empowerment of our communities. The Lesotho Highlands Water Project Phase II is not merely an infrastructure development; it’s a testament to what can be achieved when nations unite with a vision for a brighter and more sustainable future,” Nkabinde said.

“The very essence of this project is to breathe life into our economy, and most importantly, ensure that every citizen who is impacted by the Vaal River System, which the project augments, has access to life’s most vital resource. As we embark on this transformative journey, we remain ever grateful to our partners and stakeholders for their unwavering support and trust,” he said

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