Lesotho Water Transfer scheme feasibility study commences
Business
The much anticipated Lesotho Water Transfer scheme in which three countries, Botswana, Namibia and South Africa collaborate under the Orange –Senqu River Commission (ORASECOM) to draw water from the abundant Lesotho supply to feed their demands is finally taking shape.
Lesotho has surplus water owing to the mountains that easily trap terra cubic meters of water from the Senqu River, Vaal and Orange rivers amongst other water streams. The four countries represented by the ministers responsible for water supply recently met in Kasane to approve the commencement of a feasibility study that will guide the design, engineering and construction of one of Africa’s largest dams in Lesotho and a Pipeline running from the Kingdom of Lesotho through South Africa into Botswana.
Minister of Land Management, Water and Sanitation Services Prince Maele briefed members of the press this week that the four countries involved reached an agreement to source funds from the African Development Bank for the study. According to Maele the feasibility study will inform the size of the dam to be constructed considering the environmental assessment and the quantity of water to supply to countries in demand hence also informing the budget of the actual dam construction and the transfer pipeline.
“For now we can only say it will be a very large dam considering the demand of water we want to meet in both Namibia and Botswana” he said. The feasibility study is expected to cost around US$2.3 million (P23million) and is targeted to be complete within a period of 24 months. The detailed objective of the study is also to determine the viability of water resource development options for the entire water transfer by gathering and assessing engineering, costing, social, legal, environmental, economic and financial information.
The study findings will provide an important input in support of the broader assessment and analysis of potential impacts associated with climate change in the Orange-Senqu River basin. It links to the ongoing analytical work addressing the Climate Vulnerability of Africa’s Infrastructure’ that is focused on river basins across Africa using a climate lense to build on the Africa Infrastructure Country Diagnostic. “This will ensure that we develop a sustainable project with global standards taking into consideration all environmental and socio-economic aspects,” Maele further explained
He said that Botswana wanted to source water that would not be expensive for the country. According to Maele, the implementation of the entire project will benefit inhabitants of the villages and settlements that the pipeline traversed. “The residents will benefit in terms of the water supply and employment creation during pipeline construction as well as maintenance and services of the mini monitoring facilities throughout the pipeline. The pipeline drawing water into Botswana will be just over 600 kilometres and will stream water into the greater Gaborone area and villages in the southern part of Botswana.
Once complete the entire water transfer undertaking which is expected to commence immediately after the feasibility study is also expected to alleviate shortage of water supply in Botswana. Minister Maele added that government would construct the North-South pipeline in the near future because the aging infrastructure was responsible for water shortages because of the leaks that consume about 40% of the water that is distributed in the country.
Government has been pumping money into developing an infrastructure and facilities to ensure efficient national water supply. The Masama East and Masama West wells are reported to be complete and would be pumping water into the North-South Water Carrier to supply the Greater Gaborone by next year. The Chobe-Zambezi Stampriet Aquifer which will supply the Kgalagadi North is expected to be complete by 2020.
The rational of the Lesotho water transfer scheme also goes beyond the need to augment local water supply, Minister Maele explained that Botswana had run out of space for construction of new large dams also because of exhausted water streams saying financial institutions now also prefer to provide funding for cross border projects instead of those carried out by individual countries. WeekendPost also established that the provision of engineering, procurement and construction as well as management will be awarded on the basis of benefiting companies from all the four countries.
Lesotho has abundant water and currently supplies South Africa with water under the The Lesotho Highlands Water Project (LHWP). The LHWP is an ongoing water supply project with a hydropower component, developed in partnership between the governments of Lesotho and South Africa.
It comprises a system of several large dams and tunnels throughout Lesotho and delivers water to the Vaal River System in South Africa. In Lesotho, it involves the rivers Malibamatso, Matsoki, Sequnyane and Senqu. It is Africa's largest water transfer scheme. The Botswana Transfer Scheme will also be amongst the largest water tunnels in the continent.
Business
Grit divests from Letlole La Rona
Grit Services Limited, a member of the pan African real estate group, London Stock Exchange listed Grit Real Estate Income Group is divesting from Letlole La Rona Limited (LLR), a local real estate company established by government investment arm Botswana Development Corporation over a decade ago.
The Board of Directors of Letlole La Rona Limited this week announced in a statement to Unitholders that Grit Services Limited (‘Grit’) has informed them of its intention to exit its investment in the company.
Grit has been a material shareholder in LLR since 2019. On 07 March 2023, Grit sold 6 421 000 linked units, representing 2.29% of the Company’s total securities in issue, at a market value of BWP 22 537 710.
This trade follows previous sales of 6.79% in December 2022, as communicated to Unitholders on 10 January 2023, as well as a further sale of 4.78% (representing 13 347 068 linked units) on 24 February 2023 to various shareholders.
In aggregate, Grit has sold 13.9% shareholding in the Letlole La Rona between December 2022 and March 2023, resulting in current shareholding of 11.25% in the Company.
Letlole La Rona said in the statement that the exit process will take place in an orderly manner so as to maintain stability of the Company’s share price.
The statement explained that Grit’s sale of its entire shareholding in LLR is in line with its decision to exit investments where it does not have majority control, or where it has significant exposure to currencies other than US dollar, Euro or hard-currency-pegged revenue streams.
“Grit has announced similar decisions pertaining to certain of its hospitality assets in Mauritius recently. The Company would like to advise Unitholders that it remains focused on long-term value delivery to all stakeholders” LLR said
In July last year as part of their Go-to-Africa strategy Letlole La Rona acquired an initial 30% equity stake in Orbit Africa Logistics, with an option to increase this investment to 50%. OAL is a special purpose vehicle incorporated in Mauritius, owning an industrial asset in a prime industrial node in Nairobi, Kenya.
The co-investment was done alongside a wholly owned subsidiary of London listed Grit. The Orbit facility is situated on a prime industrial site on Mombasa Road, the principal route south of Nairobi center, serving the main industrial node, the port of Mombasa and the industrial town of Athi River and is strategically located 11 kilometers south of the international airport and 9.6 kilometers from the Inland Container Depot.
Grit shareholding in Letlole La Rona was seen as strategic for LLR, for the company to leverage on Grit’s already existing continental presence and expand its wings beyond Botswana borders as already delivered by Kenya transaction.
Media reports have however suggested that LLR and Grit have since late last year had fundamental disagreements on how to go about the Go-to-Africa strategy amongst other things, fuelled by alleged Botswana government interference on the affairs of LLR.
Government through LLR founding shareholder – Botswana Development Corporation has a controlling stake of around 40 percent in the company. Government is the sole shareholder of Botswana Development Corporation.
Letlole La Rona recently released their financial results for the six months ended December 2022, revenue increased by 4% to P50.2 million from P48.4 million in the prior comparative six months, whilst operating profit was up 8% to P36.5 million. Profit before tax of P49.7 million was reported, an increase of 8% on the prior comparative six months.
“We are encouraged by the strong results, notwithstanding a challenging economic environment. Our performance was mainly underpinned by annual lease escalations, our quality tenant base and below average market vacancy levels, especially in our warehouse portfolio,” Kamogelo Mowaneng, Letlole La Rona Chief Executive Officer commented.
LLR reported a weighted average lease expiry period of 3.3 years and escalation rates averaging 6.8% per annum for the period ended 31 December 2022.Its investment portfolio value increased by 14% year-on-year to close the period at P1.4 billion, mainly driven by the acquisition of a 30% stake in OAL in July 2022.
The Company also recorded a significant increase in other income, predominantly due to foreign exchange gains on the OAL shareholder loan. “We continue to explore pipeline opportunities locally, and regionally in line with our Go-to-Africa strategy and our interest remains on value-accretive investments,” Mowaneng said.
An interim distribution of 9.11 thebe per linked unit was declared on the 6th of February 2023 for the half-year period to 31 December 2022, comprising of a dividend of 0.05 thebe and debenture interest of 9.06 thebe per linked unit which will be paid to linked unit holders registered in the books of the Company at the close of business on 24 February 2023.
Business
Stargems Group establishes Training Center in BW
Internationally-acclaimed diamond manufacturing company StarGems Group has established the Stargems Diamond Training Center which will be providing specialized training in diamond manufacturing and evaluation.
The Stargems Diamond Training Institute is located at the Stargems Group Botswana Unit in Gaborone.
“In accordance with the National Human Resource Development Strategy (NHRDS) which holds the principle that through education and skills development as well as the strategic alignment between national ambitions and individual capabilities, Botswana will become a prosperous, productive and innovative nation due to the quality and efficacy of its citizenry. The Training Centre will provide a range of modules in theory and in practice; from rough diamond evaluation to diamond grading and polishing for Batswana, at no cost for eight weeks. The internationally- recognized certificate offered in partnership with Harry Oppenheimer Diamond Training School presents invaluable opportunities for Batswana to access in the diamond industry locally and internationally. The initiative is an extension of our Corporate Social Investment to the community in which we operate,” said Vishal Shah, Stargems Group Managing Director, during the launch of the Stargems Diamond Training Center.
In order to participate in this rare opportunity, interested candidates are invited to submit a police clearance certificate and a BGCSE certificate only to the Stargems offices. Students who excel in these programs will have the chance to be onboarded by the Stargems Group. This serves as motivation for them to go through this training with a high level of seriousness.
“Community empowerment is one of our CSR principles. We believe that businesses can only thrive when their communities are well taken of. We are hoping that our presence will be impactful to various communities and economies. In the six countries that we are operating in, we have contributed through dedicating 10% of our revenues during COVID-19 to facilitate education, donating to hospitals and also to NGOs committed to supporting women and children living with HIV. One key issue that we are targeting in Botswana is the rate of unemployment amongst the youth. We are looking forward to working closely with the government and other relevant authorities to curb unemployment,” said Shah.
Currently, Stargems Group has employed 117 Batswana and they are looking forward to growing the numbers to 500 as the company grows. Majority of the employees will be graduates from the Stargems Diamond Training Center. This initiation has been received with open arms by the general public and stakeholders. During the launch, the Minister of Minerals and Energy, Honorable Lefoko Moagi, stated that the ministry fully endorses Stargems Diamond Training and will work closely with the Group to support and grow the initiative.
“As a ministry, we see this as an game changer that is aligned with one of the United Nations’ Six Priority Sustainable Development Goals, which is to Advance Opportunity and Impact for Diversity, Equity, and Inclusion (DEI). What Stargems Group is launching today will have a huge impact on the creation of employment in Botswana. An economy’s productivity rises as the number of educated workers increases as its skilled workmanship increases. It is not a secret that low skills perpetuate poverty and widen the inequality gap, therefore the development of skills has the potential to contribute significantly to structural transformation and economic growth by enhancing employability and helping the country become more competitive. We are grateful to see the emergence of industry players such as Stargems Group who have strived to create such opportunities that mitigate the negative effects of COVID-19 on the economy,” said the Minister of Minerals and Energy.
Business
Food import bill slightly declines
The latest figures released by Statistics Botswana this week shows that food import bill for Botswana slightly declined from around P1.1 billion in November 2022 to around P981 million in December during the same year.
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