MASERU – The government of Lesotho on Wednesday killed two birds with one stone, after securing a whopping M1.89 billion loan agreement for two projects in agriculture and water supply.
The loan is payable within 25 years.
Thanks to the World Bank, the government received a financing agreement for the Lesotho Lowlands Water Project Phase II to the tune of US$78 million (about M1.092 billion) while another US$50 million was signed for the financing of the second phase of the Smallholder Agriculture Development Project phase II (SADP-II).
In addition to the US$50 million signed for the SADP project, a US$2 million grant from the Japanese Policy and Human Resource Development (PHRD) was also signed.
Minister of Finance Dr Moeketsi Majoro expressed gratitude over the two projects that will stir economic growth and promote job creation by improving productivity in the two sectors.
“I am very happy with this signing, the overall money involved here is approximately M1.89 billion for the two projects. For the water project, the US$78 million that we are signing today is in addition to the amount which we signed here last month for the same project,” Majoro said during the signing ceremony in Maseru on Wednesday this week.
The Lowlands Water Development Project – Phase II aims to finance activities to increase water availability and access to improved water supply services in Maputsoe, Hlotse and surrounding settlements.
The SADP-II, on the other hand, aims to support increased adaptation of climate smart agricultural technologies in the country’s agricultural sector, enhance commercialisation and improve dietary diversity.
It will provide matching grants to farmers and agro-processors to finance investments for increasing on-farm productivity and post-harvest infrastructure and management.
World Bank’s Country Representative, Janet Entwistle, described the two sectors of water and agriculture as major contributors to the country’s economy.
“We are all aware that water is the main driver of economic development in Lesotho and in promoting sustained and inclusive growth, economic diversification and job creation.
“The water project therefore will finance activities to increase water availability and access to improved water supply services in selected areas,” Entwistle said.
Another objective of the Lowlands Water Development Project is to improve living standards, address water security challenges and improve reliable water supply for domestic, institutional and industrial use in the selected areas.
It will include civil and ancillary works for the provision of water supply facilities. A raw water intake will be constructed on Hlotse river, as well as a water treatment plant with the capacity of 25 mega litres per day.
Approximately 115,000 inhabitants and the industrial sector are expected to benefit from the developments.
On his part, minister of water Samonyane Ntsekele expressed his gratitude for the financing agreement, noting that the process signals continuation in the implementation of the Lowlands water supply programmes.
He added the implementation will end the long-standing challenge of networking water for either industrial or home use.
“We have got much of a challenge for networking water for either industrial or home use but we are hoping to address some of these challenges through this project,” Ntsekele said.
The project will also support the enhancement of WASCO’s performance by incentivising the delivery of measurable operational improvements facilitated by change management support.
Welcoming the developments, Minister of Agriculture Mahala Molapo expressed gratitude to the World Bank and other partners, citing that since the adoption of the SADP project in 2012, the seven districts of Botha-Bothe, Leribe, Berea, Maseru, Mafeteng, Mohale’s Hoek and Quthing have been covered.
“The objective of the project is to increase marketed output among project beneficiaries through the smallholder agricultural sector. So far, the thematic areas covered by awarded grants includes, the protected agriculture through safe nets, sidling production, piggery production, fruit and vegetables processing, bee keeping and honey extraction.
“Going forward the project will cover all the 10 districts of Lesotho and its duration is seven years,” Molapo said during the signing ceremony on Wednesday.
Through the new funding, the SADP-II project will be able to provide training and offer advisory services in climate smart agricultural practices to strengthen the adoptive capacity of smallholder farmers to adjust and modify their production systems to minimise potential future impacts from climate and variability.
To date, a total of 757 groups benefited. He went on to reveal that with the phase II of the project all districts will now be covered.