LESOTHO · WATER AND COURTS
Key Facts
- The country A mountain kingdom inside South Africa that sells dam water to South Africa’s Gauteng region.
- Why now The 1986 water treaty turned 40 on 24 October 2026, with large compensation arrears still on record.
- What happened Phase I compensation arrears were 142.2 million maloti (US$8.5 million) at 31 December 2025.
- What it means for you Gauteng, home to Johannesburg and Pretoria, draws this water; the agency’s own figures show steady deliveries.
- Still open Whether a US$5.4 million court settlement claimed on 29 October is confirmed by the court or the agency.
In Plain English
The Lesotho Highlands Development Authority (LHDA) is the state agency that builds and runs the dams of the Lesotho Highlands Water Project. The project is a 1986 treaty scheme that sends water to South Africa’s Gauteng region and generates hydropower for Lesotho.
The loti, Lesotho’s currency, is tied one-to-one to the South African rand, and its plural is maloti. A cubic metre is 1,000 litres, so 65 million cubic metres is 65 billion litres.
The Lesotho Highlands Development Authority (LHDA), the state agency that built the dams sending water to South Africa, had compensation arrears of US$8.5 million (142.2 million maloti) on its books under the first phase of the scheme on 31 December 2025, the Ombudsman found. The Ombudsman is the state office that investigates complaints against public bodies, and a further US$0.4 million (6.8 million maloti) was outstanding under the second phase.
For scale, the LHDA’s own water-sales ledger shows revenue of US$196 million (3.26 billion maloti) for January to August 2026, so the Phase I arrears equal about 4.4% of that revenue. Conversions use 16.64 maloti per US$, from the European Central Bank reference rates of 29 October 2026, because the loti is tied one-to-one to the South African rand.
For US readers the story is about water security and accountability, since the dams supply Gauteng, the province that includes Johannesburg and Pretoria. No US tariff or sanction is involved, and the dispute tests how a large infrastructure scheme treats the people it displaced.
What the Ombudsman Found
The Ombudsman, Advocate Tlotliso Polaki, put the Phase I arrears at 142.2 million maloti (US$8.5 million) in an inquiry report dated 31 March 2026, down 4.02% from the opening balance. The report also found that consultation with communities around the Phase II Polihali dam was treated as a procedural exercise held after project decisions were final.
The policy at the centre of the claims compensates communities for river resources lost to the Katse and Mohale dams, including firewood, construction timber, fish, medicinal plants and grazing. The first payment was made in 2003 and 2004, and the second fell due after a ten-year review in 2013.
The LHDA stopped the second payment, citing a consultant’s finding of no evidence for further compensation, and the Court of Appeal dismissed its appeal in a case brought by villagers of Bobete in Thaba-Tseka district in November 2025. The LHDA told the Ombudsman that it paid the Bobete community, 543 households, on 23 February 2026.
A Reported Court Settlement
Twenty community associations, drawn largely from Thaba-Tseka district with one from Leribe district, went to the High Court in June 2026 to demand the second and final payment under the policy, with costs on the attorney-and-client scale. A report published on 29 October 2026 says a settlement of 89.9 million maloti (US$5.4 million) was made a High Court order on 20 October.
No judgment, court listing or LHDA statement seen on 30 October confirms that order, so it is not treated as established here. A 90-day period counted from Tuesday, 20 October would end on Monday, 18 January 2027.
What the Agency’s Own Data Show
The LHDA’s website shows Mohale Dam at 100.32% of capacity and Katse Dam at 86.57% on 25 October 2026, with the Phase II Polihali Dam at 56% construction progress on 1 October 2026. Mohale can hold 950 million cubic metres at full supply, the authority says.
The ledger shows a demand volume of 65 million cubic metres a month, which over twelve months matches the 780 million cubic metres a year that the LHDA gives as the current supply rate to Gauteng. Every month from January to August 2026 ran above that volume, and the eight-month total was 661.4 million cubic metres.
The Treaty Duty Behind the Claims
The treaty was signed in Maseru on 24 October 1986, 40 years ago last Saturday, and Article 7 paragraph 18 requires the LHDA to enable affected people to keep a standard of living not inferior to that at the first disturbance. It also requires the LHDA to compensate any loss not adequately met by those measures.
The Ombudsman recommends that the LHDA pay financial redress to affected households within six months of the report, including claims dating back to 2012. It also says that the interest-bearing account approved by the LHDA Board on 30 January 2026 for communal arrears should be operationalised immediately.
What It Means for You
Investors and lenders with exposure to southern African infrastructure can treat the LHDA’s published ledger and the Ombudsman’s arrears figures as a gauge of how promises to displaced people are met. Visitors and businesses in Gauteng draw on the same system.
Lesotho’s best-known US trade link is duty-free clothing access under the African Growth and Opportunity Act, explained in the guide to doing business in Lesotho. The water project is a separate part of the kingdom’s relationship with South Africa, covered in earlier coverage of the Polihali Dam.
What Is Not Known
No court record or LHDA statement seen on 30 October confirms the reported 20 October order, because the public judgments database did not list it and the LHDA news page showed nothing after June. Whether any settlement covers all second-payment claims of the 20 associations is not stated.
How the LHDA will fund any payment, and how it relates to the Phase I arrears recorded by the Ombudsman, is not public. The six-month period in the Ombudsman’s recommendation ended on Wednesday, 30 September 2026, and the LHDA has not published an account of whether it was met.
Frequently Asked Questions
What is the Lesotho Highlands Water Project?
It is a Lesotho and South Africa treaty project, signed on 24 October 1986, that sends highland water to Gauteng and generates power for Lesotho. Phase II will lift deliveries from 780 million to 1,270 million cubic metres a year.
How much compensation arrears does Lesotho’s dam agency owe?
The Ombudsman found Phase I arrears of 142.2 million maloti (US$8.5 million) and Phase II arrears of 6.8 million maloti (US$0.4 million) on 31 December 2025. No court or agency record confirms a reported 20 October settlement order of US$5.4 million.
Why do the villagers say they are owed compensation?
They say a second payment for lost river resources, firewood, medicinal plants and grazing fell due in 2013 and was never made. The Court of Appeal ordered payment in November 2025 in a related case.
Does the Lesotho dam dispute affect US travellers?
Not directly, because no US tariff or sanction is involved. The dams supply water to Gauteng, the province that includes Johannesburg and Pretoria.
Sources: Lesotho Highlands Development Authority, home page with dam levels of 25 October 2026 and Phase II progress of 1 October 2026; LHDA water sales ledger, updated 1 October 2026; LHDA, Phase II project page; LHDA, Phase I page on compensation and Treaty Article 7; LHDA, Our Story (treaty signed 24 October 1986); European Central Bank, euro reference rates for the rand and the dollar, 29 October 2026; LesothoLII public judgments database, checked 30 October 2026; Office of the Ombudsman of Lesotho, Polihali Phase II investigation report, inquiry no. 2 of 2025/2026, 31 March 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error