According to the Central Bank of Lesotho (CBL) in its 2016 Annual Report, the building and construction subsector was estimated to have grown significantly by 6.3 percent during the year compared with an increase of 4.5 percent in 2015. As construction work has wound down on the Metolong Dam and Water Supply Project, the main contributors to the observed growth were plant expansion works at Liqhobong Diamond mine as well as the ongoing construction of rural and urban roads.

Construction activities are nonetheless expected to dip in 2017, following the completion of the Liqhobong expansion project, before recovering in 2018 to around 9.8 percent as advanced infrastructure development associated with the second phase of the LHWP begins, namely access roads, accommodation facilities, power supply and telecommunications. Furthermore, Government construction activities and other major private projects, including those related to residential property, will continue to boost the subsector, as well the anticipated construction works at the Mothae Mining Project.


Lesotho’s National Construction Industry Development Policy is presently being developed by the Ministry of Public Works and Transport in order to establish an institutional and legal framework for growth in the sector. Despite its weak policy and legislative framework, the construction sector has demonstrated significant potential for world-class performance, considering the nature and scale of works it is able to undertake. Given the appropriate support, it should be able to build sufficient capacity not only to meet domestic demand, but also to compete for, and undertake, work outside Lesotho’s borders. In terms of the Southern African Development Community (SADC) Protocol on Trade in Services, construction services that can be exported include architecture, engineering, and building infrastructure, among others.

The construction sector has the potential to contribute significantly to economic development and compete internationally if given the necessary support, according to the Principal Secretary of the Ministry of Trade and Industry,
Thebe Mokoatle.

The Local Construction Industry Development Study, which was part of Lesotho’s Integrated Transport Project (ITP), aimed to develop a supportive environment in terms of policy and strategy for the establishment of a sustainable local construction industry and body of built environment professionals. The study recommended the adoption of a National Construction Industry Development Policy, to be supported by a Construction Industry Development Act, Built Environment Professions Act, and recommendations for regulations specific to the procurement of construction works for inclusion in the new Financial Regulations.

The establishment of two independent bodies would also help to develop the local industry. The mandate of the proposed Lesotho Construction Industry Council (LCIC) comprises setting up a reliable contractor registration system and monitoring the performance of contractors while promoting best practice and seeking international recognition and accreditation for local engineers, architects, technologists and technicians. The Council for Built Environment Professions (CBEP) would be responsible for the registration, training, accreditation and conduct of key built environment professionals, setting standards for best practice, promoting appropriate standards of education and training, accrediting that training, and helping to design suitable courses for Lesotho’s vocational and tertiary education system.


The construction of water supply, sanitation and energy infrastructure is prioritised with the goal of connecting more households to basic utilities as well as meeting the needs of local industry. Furthermore, the second phase of the Lesotho Highlands Water Project is expected, like its predecessor, to have many positive spin-offs over and above the dams and water transfer schemes themselves in the form of a hydropower plant, power lines, roads, bridges, housing, clinics and telecommunications systems.

Lesotho Highlands Water Project

The Lesotho Highlands Water Project (LHWP) is a multi-phase, bi-national initiative established through a 1986 treaty between Lesotho and South Africa and implemented by the Lesotho Highlands Development Authority (LHDA) and the Trans-Caledon Tunnel Authority (TCTA). In its entirety, it involves the construction of five large dams, implemented over four phases and ultimately transferring 70 cubic metres of water per second to South Africa. The water transfer aspect sees dams and tunnels being built in Lesotho to store, regulate, divert and transfer water from the Senqu (Orange) River and its tributaries to South Africa. This delivery system is utilised to generate hydroelectric power in Lesotho.

The first phase of the LHWP was the biggest water transfer scheme that had ever been undertaken on the African continent. Completed in 1998, Phase IA encompassed construction of the 185-metre-high concrete double curvature Katse Dam (the highest in Africa) on the Malibamatso River and associated infrastructure and transfer tunnels from the Katse Reservoir to the ‘Muela Hydropower Station and on to the Ash River in South Africa. Phase IB, which was inaugurated in 2004, consisted of the 145-metre-high concrete-faced rockfill Mohale Dam on the Senqunyane River, a tunnel to the Katse Reservoir, and a diversion weir on the Matsoku River.

Launched during 2014 at Tlokoeng in Mokhotlong district where the Polihali Dam is to be built, Phase II of the LHWP (LHWP II) consists of both water transfer components and a proposed pump-storage scheme for electricity generation. In developing Phase II, approximately 5 000 hectares will be flooded by the dam and reservoir in the valleys and tributary catchments of the Senqu and Khubelu rivers.

The Lesotho Highlands Water Commission has an oversight function, and represents and advises the two governments as well as monitoring the activities of the LHDA and the TCTA.

Water delivery capacity under LHWP II is set to rise from 780 million cubic metres per annum up to 1.27 billion cubic metres per annum. South Africa’s TCTA is responsible for funding the water transfer component – estimated at M22.9 billion on completion – while Lesotho is to fund the hydroelectric component.

Together, these projects will provide around 11 000 jobs annually, approximately half of which will be in construction with the rest in indirect activities such as agriculture, transport and services. The challenge will be to transfer skills and leverage income for sustainable employment once major civil works are completed.

Water transfer and related infrastructure comprise the following components:

  • Polihali Dam, a concrete-faced rockfill embankment dam 165 metres high, will be built downstream of the confluence of the Khubelu and Senqu rivers, and have a capacity of 2.322 billion cubic metres, a crest length of 915 metres, and a full supply level of 2 075 metres above sea level. The dam’s embankment will comprise over 12 million cubic metres of compacted rock, which will be quarried locally within the dam basin.
  • Other associated infrastructure will include a 50-metre-high saddle dam, concrete side-channel spillway, 70-metre-high Polihali Intake Tower, and a conveyance tunnel 38.2 kilometres long and 5 metres in diameter that will transfer water from the Polihali reservoir to the Katse reservoir.
  • A 60-kilometre west-east access road linking the A8 near Matsoku to the A1 near Tlokoeng.
  • High tension power and fibre optic telecommunications extensions along the abovementioned access road.
  • Ten new bridges, with three being higher than 100 metres and longer than 0.5 kilometres, linked to some 100 kilometres of rural feeder roads.
  • A permanent housing development, which will consist of project offices, and residential and community facilities, will be established near the Polihali Dam and transfer tunnel.

Work associated with the water transfer tunnel includes the intake works and gate shaft at the Polihali reservoir, the transfer tunnel itself, ventilation and dewatering shafts, outlet works and a gate shaft at the existing Katse reservoir. The contractors will tunnel through basalt rock, meaning that excavation will most likely be done using both the drill-and-blast method and a tunnel-boring machine, and the tunnels will be fully concrete-lined. Hydraulic control will be effected by the valves in the intake structures. The Polihali intake gate shaft will be used only for maintenance and water quality control functions.

During the construction of Phase II, significant additional works contracts will be awarded for the construction of all-weather access roads, a bulk power supply network, telecommunications systems and project housing as well as
labour camps.

In July 2017 the LHDA awarded the contract on the design and construction supervision of the Polihali Dam to Matla a Metsi Joint Venture, comprising South African companies GIBB (Pty) Ltd and Mott MacDonald Africa (Pty) Ltd, French company Tractebel Engineering SA/Coyne et Bllier, and Basotho-owned LYMA Consulting Engineers. This is the largest award on Phase II consultancy and amounts to a sum of M445 million.

It is anticipated that design work for the construction of the Polihali Dam will take 18 months, while the actual construction of the dam should kick-off towards the end of 2019 or the beginning of 2020. Collection of water into the dam is expected to start in 2023 and transfer of water to South Africa should commence towards the end of 2025.

The majority of the advance infrastructure components need to be completed before the construction of the main Phase II works (the Polihali dam and transfer tunnel) can begin. To date, several consultancy contracts have already been awarded for various elements of the advance infrastructure works, including access roads, bridges, construction villages/camps, geotechnical studies, bulk power and telecommunications, environmental and social impact assessments and resettlement action plans. Furthermore, 20 advance infrastructure construction contracts across a variety of disciplines – including roads, bridges, housing, power and water supply, and waste management, with values ranging from M1 million to over M1 billion each – began to go out to tender from the last quarter of 2017.

Water and sewerage

Lesotho’s Water and Sewerage Company (WASCO), overseen by the Lesotho Electricity and Water Authority (LEWA), is in charge of construction projects related to domestic and commercial water supply and sewerage systems in urban centres.

Achievements for 2016/17 include the installation of 5 413 urban water supply connections serving 21 652 people, and 76 rural water supply project systems serving 32 560 people. In addition, 359 urban sewer connections have been completed, serving 1 436 people, and 7 076 rural VIP systems supplying 7 076 households.

The recently completed Metolong Dam is 83 metres high with a crest width of 270 metres and a reservoir of 63.7 million cubic metres. The water treatment works have a capacity of 75 000 cubic metres per day on average (peaking at 93 400 cubic metres). The downstream conveyance system comprises transmission pipelines, storage reservoirs and associated pumping stations. Pipelines include a 34.3-kilometre line to Maseru; 33.0-kilometre line to Roma and Mazenod; 30.5-kilometre line to Morija; and a 25.0-kilometre line to Teyateyaneng.

The feasibility study for the Greater Maseru Water Supply Project has been completed and is presently awaiting financing for detailed design and construction supervision. The project covers the water distribution network and associated infrastructure in the villages of Mazenod, Ha Luka, Ha ‘Masana, Ha Tsiame, Ha Makhoathi, Ha Lenono, Ha Bosofo, Ha ‘Nelese, Ha Foso, Marabeng, Berea and Maqhaka.

Drawing on EU funding, the Maseru Waste Water Project is helping to improve the treatment and disposal of wastewater for around 100 000 residents in the urban and peri-urban areas of Maseru through connections to sewer networks as well building low-cost on-site sanitation services. It involves transporting reticulated sewage from villages such as Masowe I, II and IV, Thetsane, Khubetsoana, Mabote, Naleli, Makoanyane, NHTC and the filter clinics of Mabote Qoaling and Likotsi.

Current works under the project include the construction of sewer mains and a pumping station in Khubetsoana (Lot 1) and construction of sewer networks in Thetsane East and Masowe IV (Lot 2), due for completion by December 2018. Furthermore, baseline assessment and construction is underway to provide on-site sanitation facilities in urban Maseru, and is set to conclude in September 2018.

The Five Towns Water Supply Project encompasses provision of water in the five districts of Botha-Bothe, Hlotse, Mafeteng, Mohale’s Hoek and Qacha’s Nek. It entails construction of river intake works, water treatment works, pumping stations, transmission mains, distribution mains, and reservoirs in all the five towns.

The Lowlands Rural Water Supply and Sanitation Project, which has been implemented as part of the Metolong Dam initiative, provides basic rural water and sanitation infrastructure as well as environmental health support to the districts of Berea and Maseru. Benefitting some 65 000 inhabitants with access to safe and reliable water, and 7 800 households with access to improved sanitation facilities, the focus is those communities located in the vicinity of the project’s primary and secondary water supply pipelines.

Projects being undertaken during the 2017/18 fiscal year include Tsikoane Water Supply and Sanitation Scheme and Katse-Matsoku-Lejone Water Supply and Sanitation project. The High North/Sehlabeng/Foso Water Project entails transfer of potable water from the High North Reservoir at Sehlabeng to the villages of Ha Foso and Marabeng in Berea.

Other current projects include the reconstruction of Maputsoe Sewer Line to connect three firms; rehabilitation of Qacha’s Nek intake works; and water network extensions at Lekhobanyane, Mpesi, Ha Jimisi, Foso, Marabeng and Thaba-Tseka. In addition, the replacement of asbestos pipes with high density polyethylene (HDPE) pipes is ongoing at Mohale’s Hoek, Maseru East, Qoaling and Mafeteng, and Sekantsing pipeline in Quthing is being rehabilitated through the replacement of uPVC pipes with galvanised iron pipes.

Electrification and power generation projects

The hydropower component of Phase II of the LHWP is still to be agreed upon by the governments of South Africa and Lesotho. Following ongoing feasibility studies, a report on bankable hydropower options is expected in the first quarter of 2018. This may include either a pumped storage scheme, conventional hydropower such as the expansion of ‘Muela Hydropwer infrastructure, or new greenfield sites. To date, the preferred option has been the 1 200-megawatt Kobong Pump Storage Scheme, which would comprise the existing Katse Reservoir and a new upper reservoir in the Kobong valley, allowing for the export of  1 000 megawatts of peak power while leaving 200 megawatts available for domestic use.

The optimal installed capacity as well as the operation mode of the power station still need to be determined as part of the generation system in the Southern African Power Pool. The scheme would need energy to pump water to the reservoir during off-peak hours to ensure availability during peak hours. Further, it would require significant strengthening of the existing transmission lines between the two countries.

A M151.76 million loan from the African Development Bank (AfDB) is helping to fund the Urban Distribution Rehabilitation and Transmission Expansion Project, which aims to rehabilitate and refurbish electricity power distribution networks across the country. The project encompasses the rehabilitation of 188 kilometres of distribution lines and switching stations, expansion of the transmission network through the upgrading of a substation, and construction of 8 kilometres of transmission lines, and is expected to create 140 jobs during construction.

The Rural Electrification Project kicked-off in October 2017 for the three villages of Ha Sofonea, Ha Majara and Ha Tonki in Maseru’s Thaba-Bosiu constituency. The project will cost in excess of M6 million and benefit 545 households in these villages. This is the initial phase of a project which will be rolled out to rural villages across the country.

Major works recently completed by the Lesotho Electricity Company (LEC) include connecting the second 132kV line between Mabote and Mazenod substations and adding the third 40MVA transformer at Mazenod substation. LEC has also upgraded two 33/11kV Maputsoe transformers from 10MVA to 20MVA each in order to address gradual load growth around Maputsoe Industries and the surrounding villages. Furthermore, a 33kV line has been built between Metolong to St Agnes, while the Litšoeneng substation in Mohale’s Hoek is being re-commissioned and a feasibility study for the 132kV line from Mazenod to Qacha’s Nek via Semonkong has been completed.


A department under the Ministry of Public Works and Transport, Lesotho’s Roads Directorate was formed by the amalgamation and restructuring of the former Roads Branch and Department of Rural Roads, and established under the Roads Directorate Act of 2010. It is responsible for planning, designing and implementing the construction, upgrading, rehabilitation and maintenance of primary, secondary, tertiary and other roads and bridges throughout Lesotho, as well as supporting the development of the road construction industry.

The role of transport infrastructure in improving a country’s competitiveness cannot be overemphasised. In recent years, Lesotho’s central and local governments have made considerable investments in improving the quality of roads to bitumen or hard gravel standards and expanding the network of urban and rural roads. The introduction of the Lesotho Road Management System (LRMS), which enables the collection and systematic monitoring of data on national roads, will facilitate timely maintenance interventions before roads start to deteriorate.

Temporary employment was provided to 14 839 unskilled labourers during construction, rehabilitation and maintenance of roads, government buildings, bridges and airstrips during the 2016/17 fiscal year.

The 2017/18 budget proposed a sum of  M916 million for the construction of roads and bridges through the ministries of Public Works and Transport and of Local Government and Chieftainship. This comprises 330 kilometres of rural roads and 20.3 kilometres of urban roads in Maputsoe and Mohalalitoe. In addition, the construction of footbridges continues across Lesotho, and the Leshoele–Mathokoane road and the Likalaneng–Thaba-Tseka road are being upgraded.

Reconstruction and rehabilitation of 37 kilometres of the Nyenye-Mapoteng-Makhoroana road by EXR Construction has recently been completed. There are also a number of ongoing projects, including:

  • Upgrading to bitumen standard of 40 kilometres of the Leshoele-Mathokoane-Setene-Bene road by China GEO
  • Upgrading from gravel to bitumen of 10 kilometres of the Alywal’s Kop-Tele road by Matekane Construction
  • Reconstruction of 70 kilometres of the Oxbow-Mapholaneng road by CMC Di Ravenna
  • Construction of the new Bethel Bridge by Stefanutti Stocks

The rehabilitation of Moshoeshoe I International Airport was scheduled to begin in the 2017/18 fiscal year. Work being undertaken includes extending the existing runway and the construction of a new VIP terminal building and renovation of the existing terminal buildings, and the installation of navigation aids and apron lighting. The objective is to increase the handling capacity of the airport to meet existing and forecast demands for passenger and cargo facilities.

Government has received funding totalling US $63.2 million from several development partners, led by the Kuwait Fund. The budget for 2017/18 amounted to M350 million (Kuwait Fund) and M11 million from the Lesotho Government.

The rehabilitated main runway at Mejametalana Airbase was commissioned in 2017. The runway, which measures 1 300 metres long and 30 metres wide, was built by EXR Construction (Pty) Ltd.


A significant proportion of housing is owner-constructed and owner-financed, with around 23 percent of households living in dwellings they have built themselves and 19.7 percent having inherited their home. In towns and villages, and to some extent also in rural areas, owners typically collect materials over time and eventually build their own homes.

According to the draft National Housing Strategy, formal housing supply in Lesotho falls short of demand. It is estimated that an additional 5 200 houses (or some 9 000 rooms) will be needed every year to meet the urban housing demand, amounting to an estimated 60 000 houses by 2025. Housing finance is channelled mainly through mortgages, and the criteria used to qualify for a loan poses a challenge to most citizens, particularly those without formal employment.

Residential property development

A state-owned developer, the Lesotho Housing and Land Development Corporation (LHLDC) was established following the merger of the Lower Income Housing Company and Lesotho Housing Corporation in 1988. The mission of the LHLDC is to assist in meeting the shelter needs of all Basotho by providing a variety of housing sites as well as home ownership and rental accommodation options to cater for a wide spectrum of income levels in the most cost effective manner available.

The corporation finances and engages construction companies to build and maintain the housing stock as well as having an in-house capacity for construction. Although the LHLDC has improved on its delivery record in recent years, addressing the needs of low income groups remains a challenge. For this category, the primary approach involves building ‘malaene’ – comprising rows of single or double interconnecting rooms for rental accommodation.


In addition to its other duties, the Ministry of Local Government and Chieftainship is tasked with facilitating the delivery of affordable quality houses to Basotho within properly planned settlements. The Ministry has helped to develop the Lesotho Housing Profile (LHP), which was launched in 2016 and is supported by the United Nations Development Programme and UN-Habitat in Lesotho. The aim of the LHP is to develop a holistic interpretation of the factors influencing housing provision in the country, including areas such as housing finance, land and construction, and institutional, regulatory and cultural issues. Furthermore, the development of the LHP has been instrumental in the creation of the draft National Housing Policy (2016-2020).

The Maseru Municipal Council (MMC) is responsible for planning and allocating land within the designated city boundaries and developing plots for residential housing.

The 2017 Africa Housing Finance Yearbook, produced by the Centre for Affordable Housing Finance in Africa, reports that in the past two years the LHLDC built 20 three-bedroom houses in the Katlehong area and developed 996 plots in Masowe (Maseru South West) III. The Masowe IV housing project comprises 448 residential plots. The LHLDC is also responsible for the Linakotseng housing project, which was initially overseen by the Ministry of Local Government and Chieftainship as a low income housing project.

Private housing developers produce housing stock mainly for middle to high income groups. The Matekane Group of Companies (MGC) is involved in property development and to date has built 20 three-bedroom luxury houses at Mpilo Estate. Another private company engaged in developing housing estates is Sigma Construction and Property Development, which has developed low, middle and high income residential houses (both detached and attached) in Mabote, Masowe II and III, and Khubetsoana. Green City Property Developers plan to build close to 800 gated housing units over a five-year period in Pena-Pena at Ha Abia just outside Maseru for the middle to high income group. Habitat Lesotho works in partnership with vulnerable groups to build donor-subsidised houses between one and three rooms in size.

Industrial and commercial property

The Lesotho National Development Corporation (LNDC) constructs factory shells and provides services (roads, water and electricity) as an incentive to investors. Development of the 80-hectare Tikoe Industrial Estate has seen new factory spaces becoming available for occupation in line with improvements in output by the manufacturing subsector. A sum of M50.0 million was allocated in the 2017/18 budget for Tikoe Industrial Infrastructure Phase III and an additional M50 million for developing infrastructure at the 121-hectare Special Economic Zone development in Ha Belo, Botha-Bothe. Other sites that have been identified by the LNDC for industrial development include the 31-hectare Nyenye industrial area, 80 kilometres north of Maseru, and a 7-hectare site in Berea.

Phase II of Tikoe Industrial Infrastructure was completed in 2016/17 and saw the development of 27 hectares of land into a fully-serviced estate with roads, water, electricity and 11 factory shells with sizes ranging from 2 000 to 4 000 square metres. The project was financed by Government and its development partners, the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID), in an amount of US $28.4 million.

Further opportunities exist in the development of the commercial property: three prime sites totalling 18 150 square metres in Maseru City Centre; 5 700 square metres in Mafeteng; and 140 hectares near the northern border crossing of Caledonspoort, where there is an opportunity to develop an eco-lodge with conference facilities and outdoor entertainment.

Social infrastructure

Construction programmes under the Millennium Challenge Corporation (MCC) have focused on building and renovating clinics and bringing health facilities closer to rural areas. Government is presently considering building a Cancer Treatment Centre, as the cost of cancer referrals to neighbouring South Africa for radiotherapy is skyrocketing.

An increasing number of public sector projects are undertaken with input from the private sector. Local contractors are used where feasible in an effort to boost citizen economic empowerment.

One such example is the Queen ‘Mamohato Memorial Hospital, which was built in Maseru at a cost of around M1 billion in a Public-Private Partnership (PPP) agreement between the Government of Lesotho and Netcare.

In the area of education, work is ongoing to rehabilitate classrooms and construct new science laboratories, with M15 million set aside for the construction of Secondary Schools in the 2017/18 national budget.