Lesotho
With a cumulative score of 0.96, Lesotho ranks number 91 among emerging markets and number 120 in the global ranking.
- Emerging markets
- Middle East & Africa
1.08 / 5
Power score
0.67 / 5
Transport score
Buildings score
Only 56 markets (28 emerging markets) are scored on the Buildings sector. See the full list on the methodology page.
Low-carbon strategy
Net-zero goal and strategy
Lesotho has not set a net-zero emissions goal.
Nationally Determined Contributions (NDC)
The country has yet to update the Nationally Determined Contribution (NDC) it submitted to the United Nations Framework Convention on Climate Change (UNFCCC) back in 2017. That NDC – which is Lesotho’s plan to help achieve the goals set out in the Paris Agreement – laid out an ambition to lower greenhouse gas emissions by 10% by 2030 versus anticipated levels in a business-as-usual scenario. It said this could increase to a 35% reduction with international financial and technological support.
Fossil fuel phase-out policy
There is no fossil fuel phase-out policy in Lesotho.
Power
Power policy
While Lesotho’s 2015-2025 Energy Policy document provides a strategy for the country’s energy sector, it has not been formally adopted. A draft renewable energy framework policy has also been developed, including mechanisms for procuring both off-grid and on-grid renewable energy, but this has not been adopted either.
Power policies
Power prices and costs
Power prices are extremely high in Lesotho, exacerbated by a reliance on electricity imports from South Africa. Prices increased by 4.8% to 5.6% for all types of consumers in 2021. A larger domestic power fleet with low marginal-cost electricity would help reduce the country’s power prices.
Power market
Lesotho imported 30% of its power from neighboring South Africa in 2018. While Lesotho’s domestic fleet is composed entirely of hydropower, South Africa's grid is overwhelmingly reliant on coal.
Expansion of the Lesotho's domestic generation fleet with renewables capacity would reduce electricity import volumes and lower the carbon footprint of its power sector. The country has a strong financial incentive to do so, as imported electricity costs 10 times more than domestically produced power.
Some 90 megawatts of renewables are under development, with power offtake agreements in place. This comprises the 20-megawatt NEO1 solar project financed by the African Development Bank and World Bank, and the 70-megawatt NEO2 solar project financed and developed by China’s Exim bank. When completed, they will more than double the size of the country’s renewables fleet
Installed Capacity (in MW)
Electricity Generation (in GWh)
Utility privatisation
Which segments of the power sector are open to private participation?
Wholesale power market
Does the country have a wholesale power market?
Doing business and barriers
Lesotho's electrification reached 40% in 2020 and it is aiming to reach 50% by 2022 and 80% by 2030. This would provide a substantial opportunity for investment in the country’s power sector.
Lesotho has limited availability of suitable land for renewable energy development. The terrain is mountainous, and access is usually difficult. Even when land is accessible, it is often already being used for agriculture or residential purposes.
On top of this, the overlap of official energy-sector entities, including the Department of Energy, Lesotho Electricity Co., Lesotho Energy and Water Authority, and Rural Electrification Unit, has resulted in an underdeveloped regulatory framework, a lack of technical standards for equipment, and slow implementation of projects.
Currency of PPAs
Are PPAs (eg. corporate PPAs and all other types) signed in or indexed to U.S. Dollars or Euro?
Bilateral power contracts
Can a C&I (Commercial and Industrial) customer sign a long-term contract (PPA) for clean energy?
Fossil fuel price distortions - Subsidies
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) down through subsidies?
Fossil fuel price distortions - Taxes
Does the government influence the wholesale price of fossil fuel (used by thermal power plants) up through taxes or carbon prices?
Transport
EV market
The government has yet to implement any substantive policy support in this sector and the electric vehicle market in Lesotho remains at an early stage.
EV policy
The government has yet to implement any substantive policy support in this sector.
Transport policies
Fuel economy standards
Does the country have a fuel economy standard in place?
Buildings
Buildings market
While the government of Lesotho aims to improve the energy efficiency of households and industry, substantive policy support is lacking. The low-carbon heat market remains at an early stage.
Energy efficiency policy
Does the country have a national energy efficiency plan?
Energy efficiency policy
Are there minimum energy performance standards for buildings?
Energy efficiency incentives
Is there access to loans or grants for energy efficiency measures (i.e. Wall or loft insulation or double glazing)?
Buildings policy
There are no specific laws.
Buildings policies
Additional insights
from BNEF
Explore more detailed information on global commodity markets and the disruptive technologies driving the transition to a low-carbon economy.
Powered by
