The loan encompasses the Metolong Dam itself, along with related infrastructure, conveyance system, water treatment works, environmental and social management and institutional support. The EIB’s support closes the funding needed to complete the EUR 282M project in its entirety using a local currency and long-term loan which is well suited to the project’s long economic life.

“The European Investment Bank is pleased to support the Government of Lesotho in providing a secure source of water for urban and peri-urban centres in the country. The project will have a significant contribution both to the Millennium Development Goals and for the continued socio-economic development of the country” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for lending operations in sub-Saharan Africa.

“The Metolong Dam is currently on schedule to provide an additional 75,000m3 of clean water for 385,000 people by 2013. Close attention is being paid to ensure that all aspects of the ambitious scheme are carried out in an environmentally and socially responsible and sustainable manner, with plans already underway to enhance livelihoods of communities affected by the scheme,” added Paul Collins, Acting Chief Executive of the Metolong Authority.

The main objective of the Program is to supply treated bulk water to the capital Maseru and other urban centres by September 2013. As a mountainous country Lesotho disposed of abundant water resources, however in the dry season water can be scarce and demand has increased over the last decade due to economic growth and urbanisation.

The detailed design of the conveyance system was made from European Development Funds managed by the European Commission. The Metolong Dam and Water Supply Program provides the bulk of water supply for households and industry in the densely populated Lowlands of Lesotho.

“We are glad to see the EIB supporting water supply investment which is an important priority in our cooperation with Lesotho. The EU is also engaged in reinforcing water management, so as to ensure the sustainability of the considerable EU support and funding. Investments of this scale are needed if we want to fulfil the people’s access to water and sanitation,” commented the Head of the European Union’s Delegation to Lesotho, Mr. Hans Duynhouwer.

The European Union is the lead donor in the Lesotho water sector. The EIB is also currently financing the Maseru wastewater project with a EUR 14.3M loan in conjunction with European Union grants and technical assistance.

Other investors in the multi-donor project include the World Bank, Millennium Challenge Corporation, The African Renaissance and International Cooperation Fund of the Republic of South Africa, Saudi Development Fund, OPEC Fund, Kuwait Fund and Arab Bank for Economic Development in Africa.

The Program fulfils the main objectives of the EIB’s water sector lending policy – sound justification, adaptation to climate change through increased supply and provision of water services to new customers. Since 2005 the EIB has funded clean water and sewage projects worth EUR 432M in 12 sub-Saharan countries.