StanChart Explores Helping Lesotho Raise Energy Transition Fund
Standard Chartered Plc and Standard Bank Group Ltd. are exploring working with Lesotho on raising a fund to help the country meet its energy needs and start exporting power.
The banks aim to work with the government to attract investment into the His Majesty King Letsie III Just Energy Transition Fund, according to a statement from the king’s office. Standard Chartered, which is based in London, has a presence across a number of African countries while Johannesburg-based Standard Bank is the continent’s biggest lender.
Standard Chartered will work “with the Kingdom of Lesotho to pursue a first-of-a-kind ‘country platform’ that can support the country’s ambitions,” Marisa Drew, Standard Chartered’s chief sustainability officer, said in comments sent to Bloomberg. “Leveraging programmatic blended finance of this kind is an innovative way to attract foreign private-sector investment to emerging-market economies.”
The mountainous kingdom, an enclave within South Africa, has abundant wind, solar and hydropower resources, yet imports much of its electricity. It earns foreign exchange by providing water to South Africa and from selling mohair from its Angora goat herds.
Domestic Needs
“It has historically been difficult to source private sector and international investment in Lesotho’s energy system,” the king’s office said in the statement. The fund “creates the exciting opportunity to demonstrate the potential for emerging economies to ‘leapfrog’ from energy poverty to clean energy abundance without passing through fossil fuels,” it said.
The first phase of the project will aim to meet Lesotho’s domestic power need of 200 megawatts. It will then start to build surplus power generation capacity and expand its transmission network to supply electricity to the region through the Southern Africa Power Pool.
A number of Southern African countries, including Zimbabwe and Zambia, are currently rationing power because of insufficient generation capacity.
