Frazer Solar saga: SA government enters the fray

STAFF REPORTER

MASERU – The much-awaited hearing of the case between Lesotho government and German company, Frazer Solar GmbH, initially set for November 10 in South Africa has been postponed to a date yet to be announced.  This comes after the South African government and its ministry of water filed an application to intervene in the case, the office of Prime Minister Dr Moeketsi Majoro said in a statement this week.

On the other hand, Frazer Solar also released a statement continuing to beat legal war drums claiming Dr Majoro is capitulating.  “To avoid losing, the Government of Lesotho has offered to delay proceedings in the South African High Court – suspending its demands to restore water royalties after their legal seizure by Frazer Solar (FSG),” reads the media statement.

“We have no difficulties with GOL’s demand that the hearing be delayed and royalties remain frozen. In one fell swoop, they have undermined their own case for urgency and their allegedly dire need for the financial royalties,” adds FSG in the statement. The statement ominously ends by asserting FSG will win the legal battle and that, “each day that goes by, the final amount payable by the Lesotho government keeps increasing.”

Frazer Solar claims they 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 then 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 while an assessment of the damages it incurred amounted to €102 million it was awarded €50 million (about M856 million).

Frazer Solar then attempted to seize Lesotho’s assets abroad in order to enforce payment of €50m in contractual damages. It was reported at the time that they had already taken control of royalties that Lesotho earns on water and power supplies to South Africa, after a US 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. In a statement at this time 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.