MASERU – Prime Minister Dr Moeketsi Majoro has established a commission of inquiry into events that led to the signing of the “purported agreement of supply” between government and a German solar company Frazer Solar.
The contentious agreement, which the government is accused of breaching, has put Lesotho’s international assets worth over M800 at stake.
The commission of inquiry, according to a legal notice, will consist of High Court Judge, Justice Molefi Makara, as chairperson, former Minister of Foreign Affairs and International Relations Mohlabi Tsekoa and Advocate Sekake Malebanye.
“Pursuant to Section 3(1) of the Public Inquiries Act, 1994, I, Moeketsi Majoro Prime Minister of Lesotho, appoint a commission of inquiry into events that led to the signing of the purported agreement of supply between the Government of Lesotho and services of notices in respect of the matter before arbitration and subsequent arbitration award,” reads part of the Legal Notice No 66 of 2021.
Frazer Solar claims it signed an agreement in 2018 with Lesotho to provide as many as 40 000 solar water-heating systems, 20MW of solar photovoltaic capacity, one million LED lights and 350 000 solar lanterns.
It began legal action against Lesotho in 2019 after what it said were a series of contractual breaches. The German firm won arbitration proceeding in South Africa, in which it was awarded the damages, it said last month.
It said while the German government agreed to finance the programme, Lesotho’s ministry of finance failed to execute the project’s financial arrangement and the Lesotho government had not engaged the legal process.
The company said that while an assessment of the damages it incurred amounted to €102m it was awarded €50m (about M856 million).
Frazer Solar has begun seizing Lesotho’s assets abroad in order to enforce payment of €50m in contractual damages.
It has reportedly already taken control of royalties that Lesotho earns on water and power supplies to South Africa, after a United States of America court gave it the go-ahead last month to employ tactics similar to those used by creditors to chase countries that have defaulted on their debts.
International asset seizures have increasingly become part of enforcing contracts against governments, including in Africa.
The commission established by Majoro, who was finance minister from 2017 to May 2020, will inquire into and investigate how Frazer Solar was introduced to the government of Lesotho including the persons in the country who were involved in the events that led to the signing, and enabled the company to lodge claims against the government of Lesotho.
It will also investigate the events which led to the signing of the purported agreement, whether the person or official who concluded the agreement on behalf of Lesotho had the legal authority or approval from authorized authority to do so and if not, “was there any undue interest or influence received by any person”.
In a statement last month Frazer Solar said in August 2018, it met with then Prime Minister Tom Thabane and then Minister in the Prime Minister’s Office Temeki Tšolo to discuss a detailed presentation of the project and setting out the benefits, energy and cost savings it would bring about.
In September 2018, according to the company, following negotiations, a written supply agreement was concluded, signed by Robert Frazer on behalf of Frazer Solar, and Minister Tšolo on behalf of Lesotho.
“The financing agreement with KFW would be finalised by the Minister of Finance,” it said.
It further indicated that in October 2018, it wrote to the Ministry of Finance to establish the reasons for the delay in finalising the finance agreements.
It was told by the ministry that the project required cabinet support and leadership from the Ministry of Energy.
“However, this support had already been confirmed by the office of the Prime Minister, which could not explain the ministry’s refusal to execute the financial agreement,” Frazer Solar said.
Following Dr Majoro’s alleged refusal to approve the project, Frazer Solar said it was left with no choice but to commence arbitration proceedings in South Africa.
Prime Minister’s press attaché, Buta Moseme, told Public Eye yesterday that the commission is fully gazetted and “will resume its work once all the logistics have been sorted”.
The commission will also inquire into whether there was compliance with relevant legal or administrative procedures and established practices of the laws of Lesotho by all key parties or any other person to the purported agreement when it was drawn or entered into.
Further, it will investigate the effectiveness of the Office of the Prime Minister in handling and responding to summons submitted to it and why there was no response to the summons.
The commission will also find out who were the public officials within the relevant government departments who knew about the matter but failed to take necessary steps to inform and defend the government in the arbitration proceedings instituted by Frazer Solar in South Africa.
The inquiries and investigations of the commission shall be held in public subject to the power of the commission to decide otherwise pursuant to relevant section of the Public Inquiries Act of 1994.