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Lesotho may lose its assets and revenue after Frazer Solar GmbH claimed a contractual breach.
- Frazer commenced legal action against Lesotho in 2019.
- Government officials state that the contract hadn’t been approved by Cabinet.
Lesotho may lose its assets, including its share of an undersea communications cable and revenue from its water and energy sales to South Africa after it breached the terms of a contract with Frazer Solar GmbH. Frazer Solar was awarded 50 million euros ($61 million) in damages in an arbitration case in South Africa. The company stated that it had begun legal proceedings to seize the Lesotho government’s royalties from the Trans-Caledon Tunnel Authority SOC and energy payments from Eskom Holdings SOC Ltd. The company had also provisionally seized the country’s share in the Mauritius-based West Indian Ocean Cable Co.
Frazer commenced legal action against Lesotho in 2019 after “a series of contractual breaches” of a 2018 agreement with Lesotho. The contract was to provide 40,000 solar water-heating systems, 20MW of solar PV capacity, 1 million LED lights and 350,000 solar lanterns.
The German government agreed to finance the program. At the same time, Lesotho’s Finance Ministry failed to execute the project’s financial arrangement, and the government hasn’t engaged with the legal process, according to Frazer Solar.
According to a statement from the Prime Minister office, the country’s finance and energy ministries didn’t sign the contract because it hadn’t been approved by Cabinet, and the programme wasn’t a government initiative. The government states that an unauthorised individual signed the contract on behalf of the government. Although the government received court proceedings in June 2020, officials took no action.
Lesotho, an enclave within South Africa, earns much of its foreign exchange from water and power sales to its neighbour.