African Development Bank to Invest $331 Million in Lesotho

The African Development Bank (AfDB) has announced plans to invest $331 million in Lesotho over the next five years as part of its 2025-2030 Country Strategy Paper. The investment is focused on economic growth, enhancing industrial competitiveness, and improving key infrastructure in the southern African nation.

During a historic visit; the first-ever of AfDB President, Dr. Akinwumi Adesina met with His Majesty King Letsie III to discuss strengthening development partnerships and expanding the Bank’s support for Lesotho’s economic transformation.

King Letsie III welcomed Dr. Adesina’s visit in confidence that the AfDB’s initiatives would drive progress in critical sectors such as healthcare, agriculture, and manufacturing. He emphasized the need for policies and incentives to accommodate and attract private sector investment, particularly in these key areas.

Dr. Adesina praised the King’s leadership, particularly his role as the African Union Nutrition Champion since 2014 and his commitment to food security and youth development. He also commended His Majesty for spearheading the King Letsie III Just Energy Transition Fund, which aims to generate 200 megawatts of power through private sector investments.

The Bank’s new strategic investments in Lesotho will focus on several priority areas, including energy infrastructure to strengthen electricity transmission lines between Lesotho and South Africa, agricultural development to enhance food security and rural livelihoods, and climate resilience initiatives to address environmental challenges.

Digital transformation will also play a significant role, with investments in broadband expansion to promote financial inclusion and digital government services. Additionally, the Bank will support public financial management, trade competitiveness, and debt management reforms to strengthen Lesotho’s economic foundations.

A key focus of AfDB’s support will be the proposed $2.3 billion multi-partner water transfer project, which will channel 308 million cubic meters of water from Lesotho through South Africa to Botswana via a 700-kilometer pipeline.

The project is expected to generate up to 22 megawatts of hydropower, with the Bank mobilizing approximately $260 million in funding. Responding to King Letsie III’s request, Dr. Adesina pledged that the Bank would prioritize investments in primary healthcare facilities across Lesotho. He emphasized that an integrated approach combining energy, water transfer initiatives, agro-value chains, and trade facilitation would be key to Lesotho’s long-term economic sustainability.

Lesotho’s Minister of Finance and Development Planning, Retselisitsoe Matlanyane, revealed that by 2026, the country’s energy supply will exceed domestic demand, allowing for the export of surplus electricity to South Africa. She reaffirmed Lesotho’s commitment to creating a business-friendly environment that encourages private-sector-led growth. The minister also underscored the importance of investments in healthcare and nutrition, particularly in tackling extreme stunting in several regions of the country.

Since Lesotho joined the African Development Bank in 1973, the institution has implemented 87 projects totaling $429 million across various sectors. Currently, there are eight ongoing projects worth $60 million, with plans for further expansion. One of AfDB’s flagship initiatives, the Lesotho Rural Water Supply and Sanitation Project, has already delivered 190 kilometers of water pipelines connecting distribution networks, water storage tanks with a total capacity of 3.48 million liters, and 166 public water points, providing clean water access to approximately 28,266 people in the Maseru and Berea districts.

Dr. Adesina’s visit also included meetings with Prime Minister Samuel Ntsokoane Matekane and several key ministers overseeing foreign affairs, agriculture, health, technology, and education. The AfDB delegation to Lesotho included Dr. Nomfundo X. Ngwenya (Executive Director for Lesotho), Moono Mupotola (Deputy Director General for Southern Africa), and Dr. Victor Oladokun (Senior Advisor to the President for Communication and Stakeholder Engagement).