The government of Lesotho is envisaging to take legal action to challenge the Germany energy Solar Company, Solar Fraser GmbH contractual allegations that have been making rounds.
Yesterday, the Prime Ministers press attaché, Buta Moseme told this publication that the government is learning about the details of the contract and claiming not to know how its existence came about before they take legal measures to challenge the arbitral award.
As the situation stands, Lesotho is set to lose a lucrative €50million (over M850million) after the South African arbitration ruling that judged in favour of the Germany solar company was released.
The country got in a contract agreement with Solar Frasers in 2018 to wit the company had to provide over 40, 000 solar water-heating systems, 20 megawatts of solar photovoltaic capacity, 1 million LED lights and 350, 000 solar lanterns.
Under a global enforcement order, following the award of €50 million (about M884millon) in damages in an arbitration case in South Africa, Frazer said in a statement last week that it has taken legal action to seize royalties that would be paid to Lesotho’s government by the Trans-Caledon Tunnel Authority and payments for power from Eskom.
The enforcement order also indicated that Lesotho shares in the Mauritius-based West Indian Ocean Cable Co. are provisionally seized.
“On May 21, 2021, lawyers acting for FSG served notice to Eskom directing the transfer of electricity revenue owed to the government of Lesotho in connection to the Lesotho Water Highlands Water Project (LHWP). Revenues will be collected by FSG on an on-going basis until the outstanding judgement debt is collected,” the statement read.
“On May 19, 2021 lawyers acting for FSG received confirmation from the Supreme Court of Mauritius that FSG arbitral award had been recognised and was enforceable against assets held by the Kingdom of Lesotho in the jurisdiction of Mauritius.
“Enforcement activity is currently underway concerning the government of Lesotho’s shareholding in WIOCC via Lesotho Communications Authority. On May 25, 2021, service was made to WIOCC and the government’s shareholding has been provisionally seized,” the statement read.
“The government of Lesotho has been formally notified of these legal proceedings on 25 separate occasions over a period of 25 months since 2019,” Solar Frazer GmbH statement read.
Lesotho receives large revenues from the water royalties that amount to 70million.
Moseme said the then Minister of Energy Temeki Tšolo was not officially briefed about the projected, but was only told casually. He said the project’s proposals did not follow the right procedures as the relevant ministry has to the proposal to cabinet and Public Sector Investment Committee (PSIC) which authorises the state’s capital project.
“The government is learning about the contract and how it came about and taking the legal measures to challenge the arbitral award,” he said.
“The government’s spokesperson issued a statement on May 18, 2021 indicating that the government is trying to understand the whole issue, therefore pleads with the public to remain calm because they are looking into it,” he said.
“It appears that the contract did not follow legal procedures that ought to be for the government to commit itself. The relevant Ministry is supposed to take the project to the cabinet to discuss it and PSIC authorise the project after assessing it, but all the stages were not followed.
“The relevant Minister was not formally introduced to the project; he was only briefed about by random people, not the owners of the project. So it did not have ownership,” he said.
Asked who signed the contract, he said, “I am not in a position to disclose who signed the contract, but the contract was signed,” he said
“As per the statement, the government is reassuring the nation that the state property revenues are safe and protected from seizure,” he said.