Ha Makebe, Lesotho
Lesotho’s first ever private mini-grid development has taken a major step forward after securing a 7m Lesotho loti convertible loan from REPP.*
REPP’s investment follows a pioneering effort to secure Lesotho’s inaugural mini-grid concession by Sotho Minigrid Portfolio, which is a special purpose vehicle owned by OnePower Lesotho (Pty) Ltd.
Construction of the pilot installation in Ha Makebe just north of the capital, Maseru, is underway and expected to be completed in December 2020.
The funds will be made available in local currency, which is a notable first for REPP and would provide the developer with welcomed protection against fluctuating exchange rates.
The successful completion of the mini-grid will pave the way for the development of a larger portfolio of up to 10 additional mini-grids. REPP has expressed interest in supporting the construction of this portfolio.
The pilot mini-grid and those of the planned larger portfolio are solar PV hybrids with battery storage and limited LPG backup generation. The hybrid nature of the design is to ensure 24-hour, year-round electricity supply, even during Lesotho’s harsh winters.
When fully operational, the mini-grids will provide low-cost, consistent, and very often first-time electricity access for up to an estimated 5,000 households, as well as small enterprises, schools, and health clinics. Approximately 185 part-time jobs are expected to be created during the project’s construction phase and a further 15 full-time jobs during operation.
The project is closely aligned with the country’s off-grid electrification plans as well as its NDC targets to increase energy access to 80% by 2030, while ramping up generating capacity from renewable resources by 200MW as early as 2020.
Completion of the mini-grids will demonstrate the technical and commercial viability of the project at scale, and will help to develop a viable business model that can be replicated in other rural, off-grid villages. In the process, the project will secure local funding, assist in building local capacity, develop local skills and contribute to socio-economic development.
* Disbursement of loan subject to conditions precedent being met.
Funding structure (pilot mini-grid)
Signed: 2 October 2018
Type: Convertible loan
REPP funding: LSL 7m
OnePower is proud to partner with REPP to build the first mini-grid in Lesotho. REPP has provided invaluable support to this project and we look forward to our continued cooperation to bring clean and affordable electricity services to communities in sub-Saharan Africa.- Matt Orosz, CEO, OnePower Lesotho Ltd