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Infrastructure and engineering in Lesotho

Infrastructure and Engineering Projects in Lesotho

Lesotho runs one of the largest water infrastructure programmes in Southern Africa, and construction is the single largest registered business sector in the country. The opportunity is real, and so is the competition.

Anchor programme
Lesotho Highlands Water Project Phase II
Implementing authority
Lesotho Highlands Development Authority
Environmental trigger
Buildings of 500 m2 or more, roads, dams, pipelines
Procurement
Public Procurement Act 2023, preference margins apply
Largest registered sector
Construction, 9 946 companies (OBFC, March 2018)

Infrastructure is where Lesotho's economy and its geography meet. The country exports water to South Africa through the Highlands scheme, generates its own hydropower from it, and is in the middle of a second phase of construction that will run for years.

For a contractor, consultant or developer, that means two things at once. There is a genuine and sustained pipeline of work. And construction is the largest registered business sector in Lesotho, at 9 946 companies on the OBFC register as of March 2018, so the competition for it is real.

Insika supports infrastructure and development projects through project advisory, regulatory coordination and specialist appointment, and prepares businesses to compete for the work.

The Highlands programme, and what it means commercially

The Lesotho Highlands Water Project Phase II is the anchor. Main works contracts were awarded in November 2022, with construction starting in early 2023.

Phase II comprises the Polihali dam, a 38 kilometre water transfer tunnel carrying water to Katse, the Oxbow hydropower scheme, three major bridges, and associated advanced infrastructure in the Mokhotlong highlands.

On reported progress, and dating these figures because a percentage complete without a date is meaningless: the Polihali dam reached 50 percent completion as reported in July 2026, with rockfill and upstream concrete curb reaching elevation 2 020 metres in mid-May and 2 024 metres by the end of June, slightly ahead of schedule. Reservoir impoundment is targeted for the 2027/2028 rainy season, dam construction completion is expected in 2029, water delivery by financial year 2028/2029, and the hydropower component approximately a year after water supply begins.

The commercial reading: this is a programme with years left to run, a hydropower component still ahead of it, and a long tail of associated works, services, supply and professional appointments. It is also the reason construction and engineering capability in Lesotho has somewhere to go.

Programme dates on a project of this scale move. These figures are as reported to mid-2026 and are given with their dates so you can judge how current they are. Confirm the present position before making a commitment that depends on a milestone.

The sectors, and the authority behind each

Infrastructure in Lesotho is not one market. Each sector has its own counterparty, and knowing which one you are dealing with is half of getting a project moving.

  • Water infrastructure. Supply, treatment, storage and distribution. The Lesotho Highlands Development Authority runs the Highlands programme; WASCO holds the composite water and sewerage services licence and is regulated by LEWA.
  • Energy infrastructure. Generation, transmission, substations and storage, licensed by LEWA. See energy and green economy.
  • Roads and transport. Roads, bridges, transport and logistics infrastructure, including the three major bridges within Phase II.
  • Buildings. Commercial, industrial and institutional development. Note the environmental threshold below.
  • Municipal infrastructure. Water, wastewater, roads, stormwater and electricity at local authority level.

Most substantial infrastructure work is procured publicly, which means the public procurement regime and its preference margins determine who can realistically win it. A foreign engineering or construction business that has not structured for those margins is bidding at a disadvantage of up to 15 percent.

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The environmental threshold that catches building projects

This is the requirement that surprises developers most often, and it is worth stating precisely.

The First Schedule to the Environment Act 2008 lists, among the projects requiring an environmental impact assessment, buildings with a total floor space of 500 square metres or more. It also lists major roads, all roads in scenic, wooded or mountainous areas, bridges, pipelines, railways, airports, reservoirs, storage dams, weirs, flood control schemes, canals, river diversions, water transfers and water reticulation systems.

In a mountainous country, the phrase all roads in scenic, wooded or mountainous areas covers a great deal of ground.

And because section 25(4) of the same Act prevents any other licensing authority from issuing a licence unless the application carries an environmental licence or the Director's written certificate that none is required, the environmental process sits before the rest of the approval chain, not alongside it. Our environmental compliance page sets out how that works.

A 500 square metre commercial building is not a large development, and its developer is often not expecting an environmental assessment process. Establishing this at concept stage rather than at approval stage is the difference between a short delay and a stalled project.

How an infrastructure project gets delivered

Whether you are developing, contracting or consulting, the sequence is broadly the same and the approvals are the constraint.

  1. Concept and feasibility

    What is being built, for whom, at what cost, and whether it works commercially and technically.

  2. Land and site

    Tenure, access and services. In the highlands, access is a genuine cost driver rather than an assumption.

  3. Regulatory screening

    Which approvals apply: environmental, sector licensing, local authority, and any sector regulator such as LEWA.

  4. Environmental process

    Started early because section 25(4) makes it a gate on everything downstream.

  5. Design and specialist appointment

    Engineers and specialists appointed against the actual scope, with their deliverables sequenced to the approvals.

  6. Procurement or funding

    Public tender under the Public Procurement Act 2023, or funding through the routes on our funding and investment page.

  7. Construction and contract administration

    Programme, cost and quality managed against the contract rather than against optimism.

  8. Commissioning and handover

    Including compliance with any environmental licence conditions attached to the approval.

Company registration and trading licence
Tax clearance from Revenue Services Lesotho
Proof of land tenure or lease
Concept design and technical drawings
Environmental licence, or the Director's certificate that none is required
Local authority and building approvals
Professional appointments and specialist reports
Financial capacity evidence and funding commitments
Capability statement and project references, for tendered work
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Competing for infrastructure work in Lesotho

With construction the largest registered sector on the company register, standing out is a structural problem rather than a marketing one.

  • Structure for the preference margins. Up to 15 percent for majority Basotho ownership, 10 percent for subcontracting at least half locally, 10 percent for performing at least half the contract locally with Basotho staff. On public work this is decisive.
  • Build a genuine local delivery capability. It attracts preference, and it is what makes the second contract easier than the first.
  • Be ready before the tender. Registration, licences, tax clearance and supplier database entry take longer than tender windows allow.
  • Specialise. In a market with 9 946 registered construction companies, a general contractor competes on price. A specialist competes on capability.

What Insika does on infrastructure

  • Project advisory. Feasibility, scope, cost and programme, before commitment.
  • Regulatory coordination. Mapping the approvals and sequencing them so the environmental gate does not stall the project.
  • Specialist coordination. Appointing and managing engineers, environmental practitioners and technical specialists as one programme.
  • Procurement support. Tender readiness and preference structuring for public work.
  • Funding preparation. For developers and for public-private structures.
  • Project monitoring. Milestones, outstanding requirements and progress tracked and reported.

Insika coordinates appropriately qualified engineering and technical specialists according to the requirements of each project. We are a consulting and project development firm, and the professional engineering sign-off comes from the registered professionals we appoint.

Official sources

This guide is based on the current rules published by the relevant Lesotho authorities. Always confirm the latest fees and requirements with the office that applies to you.

FAQ

Frequently asked questions

What is the Lesotho Highlands Water Project Phase II?

A major water and hydropower programme comprising the Polihali dam, a 38 kilometre water transfer tunnel to Katse, the Oxbow hydropower scheme, three major bridges and associated infrastructure in the Mokhotlong highlands. Main works contracts were awarded in November 2022 and construction started in early 2023.

How far along is Phase II?

As reported in July 2026, the Polihali dam had reached 50 percent completion, with rockfill and upstream concrete curb at elevation 2 024 metres by the end of June, slightly ahead of schedule. Reservoir impoundment is targeted for the 2027/2028 rainy season, dam completion is expected in 2029, water delivery by financial year 2028/2029, and hydropower roughly a year after water supply begins. Programme dates on projects of this scale move, so confirm the current position.

Do I need environmental approval for a building project?

If the building has a total floor space of 500 square metres or more, it is expressly listed in the First Schedule to the Environment Act 2008. Major roads, all roads in scenic, wooded or mountainous areas, bridges, pipelines, dams and water reticulation are also listed. And no other licensing authority may issue you a licence unless the application carries an environmental licence or a written certificate from the Director that none is required.

Who runs water infrastructure in Lesotho?

The Lesotho Highlands Development Authority implements the Highlands programme and holds a LEWA generation licence for the 'Muela Hydropower Station. WASCO holds a composite water and sewerage services licence and is regulated by LEWA, which took on the urban water and sewerage mandate in 2011.

How competitive is construction in Lesotho?

Very. Construction is the largest registered sector on the company register, with 9 946 companies as of March 2018, the most recent OBFC published figures. That means a general contractor is competing largely on price, and specialisation or a genuine technical capability is what changes the position.

How does public procurement affect infrastructure bids?

Substantially. Under the Public Procurement Act 2023, preference margins of up to 15 percent apply for majority Basotho ownership, with 10 percent margins for local subcontracting, local performance with Basotho staff, and Lesotho-origin goods. On publicly procured infrastructure those margins frequently decide the award.

Does Insika provide engineering services?

We coordinate appropriately qualified engineering and technical specialists according to the requirements of each project, and we manage the project around them. The professional engineering work and sign-off is done by the registered professionals appointed to the project.

Can you support projects outside Maseru?

Yes. We can assess and support projects throughout Lesotho, including Leribe, Berea, Mafeteng, Mohale's Hoek, Quthing, Qacha's Nek, Mokhotlong, Butha-Buthe and Thaba-Tseka, subject to project requirements and the availability of appropriate specialists. Highlands projects carry access and logistics costs that should be assessed early.

What funding is available for infrastructure?

Public infrastructure is largely procured and budget-funded. For private and public-private projects, LNDC development finance instruments, commercial bank lending supported by partial credit guarantees, and development and climate finance for larger schemes are the main routes. See our funding and investment page.

What is the first thing to do on a new project?

Screen the approvals. Establishing whether the environmental regime applies, and to what, determines the programme more than any other single factor, because section 25(4) of the Environment Act 2008 puts it ahead of every other licence.

IC
The Insika Consulting team
Compliance, licensing and registration specialists

Insika Consulting Engineers works on business registration, licensing, energy, mining, environmental and infrastructure projects in Lesotho. Every guide on this site is written from the Act itself or the authority's own published requirements, with the section cited on the page, and the same team can take an application through end to end.

Work spans company registration and trading licences through the OBFC, petroleum under the Department of Energy and the Petroleum Fund, mining under the Mines and Minerals Act 2005, environmental licensing under the Environment Act 2008, public tenders and funding readiness.

Reviewed and maintained by the Insika team. Last updated 2026-08-23.

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