Govt revises controversial Ha Ramarothole deal

Solar project’s Phase II budget slashed amid controversy

TEBOHO KHATEBE MOLEFI and

MOTSAMAI MOKOTJO

MASERU – Government has announced a significant revision to the budget for Phase 2 of the contentious Ha Ramarothole Solar Energy Project, slashing the initial $350 million to $58 million for Beijing Jinhyuntong Technology (BJT), the Chinese firm contracted for the initiative.

The abrupt reduction follows months of public scrutiny and debates over the project’s cost-effectiveness and transparency.

Officials in the Ministry of Energy say that though government and BJT have not yet agreed on the sums of money there have been adjustments.

Critics, however, argue that the move raises questions about the project’s feasibility and prior financial planning.

The solar energy initiative, aimed at bolstering renewable energy infrastructure in the country, has faced backlash from several quarters for lack of transparency surrounding the deal and concerns over land use and environmental impact. 

After Public Eye established the latest visit to China by state officials that included finance minister, Dr Retšelisitsoe Matlanyane and officials from the Ministry of Energy, the ministry’s public relations office confirmed that a closed two-week visit to Beijing by the officials took place.

“It’s clear that this is a new deal. I don’t know which one you are referring to,” Molisenyane Tau told this paper, indicating, though, that BJT and government BJT “have not yet agreed on the sums of money and the new amounts.”

“The aim of the visit was to sign a memorandum of agreement regarding the implementation of the solar project after the financing agreement had been signed,” Tau revealed.

This paper has previously reported on the initial agreement between BJT and government, which puts the figure at a whopping USD $350 million – described as ‘satanic’ by sources who spoke to this publication.

The startling 13-paged ‘Build-Operate-Transfer Agreement for the 35 MW solar farm and 20 MW energy storage’ includes a clause that exempts BJT from paying tax in the country.

Section 8 of the agreement, titled Tax and Duty Exemptions, notes: “During the construction phase, the Government of Lesotho agrees to waive all customs, duties, and value-added taxes (VAT) in respect of the importation of goods and materials necessary for the construction of the project. However, income tax is not exempt during the construction phase and shall be payable in accordance with applicable tax laws.”

Glaringly, when it comes to pricing, Section 7 read with 7.1, 7.2, and 7.3 provided that “the price of electricity generated by the project in the first year of operation will be set at 2.2 rand/KWh, with a five percent annual increase.

Payments for electricity will be settled in US (United States of America) Dollars at the agreed exchange rate.”

Payments would be made every 60 days.

According to the document, the operational timeline for the company would be 15 years, of which “all revenues generated from the sale of electricity belong to BJT (Beijing Jingyuntong Technology.)”

“Unless otherwise agreed in writing by both parties, any such negotiation or arbitration shall be held in Johannesburg (South Africa), and the language to be used in the arbitration proceedings shall be in English.

“Conference telephone or other similar electronic or communication facilities may be used at such negotiation and arbitration, provided always that all representatives of the parties and the arbitrators are able to fully participate in the negotiation or arbitration concerned and are capable of hearing and being heard by all other parties and arbitrators participating at the relevant negotiation or arbitration,” Section 9.7 notes.

Of critical amazement is Clause 13, which bars the government and BJT from disclosing the contents of the deal “leading to this Agreement and the information handed over to such Party during the course of negotiations, as well as the details of all the transactions or agreements contemplated in this Agreement and any matters incidental thereto.”

This publication’s sources indicated that former energy minister, Professor Nqosa Mahao, had been apprehensive about a deal that would “bankrupt the Lesotho Electricity Company.”  

“Mahao was resolute in insisting that the project should be spearheaded by his ministry but was astonished that (finance minister) Matlanyane was the lead. One of the reasons he was axed was because he refused to be part of a group of people hell-bent on making this country insolvent,” the source revealed.

When contacted for comment, a furious Minister of Finance, Dr Retšelisitsoe Matlanyane, refused to answer this paper’s questions about her role and the reasons that led to the subsequent signing of the BJT deal.

“Let’s respect each other. If you are truly a genuine journalist, you will not ask me frivolous questions since you will not even reveal your sources of information,” she said, adding “I am not interested.”

Soon after dropping the call, she wrote a seething text saying “Evening. . . the day you would like us to talk and respect each other at our respective workplaces, you will request a meeting in an appropriate manner.”

“Rephrase your questions, and then we’ll address each other appropriately about the issues you are enquiring about.”

Matlanyane has since blocked these reporters from contacting her on her mobile phone.