The Lesotho Electricity and Water Authority and the African Development Bank convened stakeholders in Maseru from 26 to 27 August 2026 to discuss reforms to Lesotho's electricity tariffs, aiming to make the sector more financially sustainable while protecting consumers.
The workshop marked a further step towards evidence-based, transparent and inclusive energy reform in Lesotho. It brought together Government representatives, energy sector institutions, technical experts, consumer representatives, and academics to review findings from the Cost-of-Service Study (CoSS) and weigh its recommendations for the reform.
The study highlights a growing electricity market. The Lesotho Electricity Company's customers are projected to increase from approximately 320,575 in 2025 to nearly 391,544 by 2030--an increase of about 71,000 customers, or nearly 22%.
The study also finds that current tariffs do not fully cover the cost of supplying electricity. For the Financial Year 2026/27, existing tariffs are expected to recover about M74.00 (approximately $4.48) for every M100.00 (approximately $6.06) required to provide the service. While full cost recovery would require an estimated 35.6% average tariff increase, the recommendations propose a more gradual approach: a 12.8% annual average increase over three years, designed to reduce the immediate impact on consumers.
The proposed reform would improve the electricity pricing system. For businesses and industries, electricity prices could vary by time of use, encouraging more efficient energy consumption and helping improve sector revenues. For households, a progressive tariff system would be introduced, where customers who use more electricity pay more. This measure would be a first step toward reforming the social tariff designed for low-consumption households.
"A sustainable electricity sector requires tariffs that reflect the cost of providing reliable service while protecting consumers. We welcome the African Development Bank's support and the evidence generated through these studies, which will help guide informed decisions and strengthen the financial sustainability, efficiency and reliability of electricity services in Lesotho", said Lejone Mpotjoane, the Minister of Energy and Mining, Kingdom of Lesotho.
Participants emphasised the importance of continued consultation to ensure that consumer concerns and stakeholder perspectives inform the next regulatory decisions.
"This reform must strike a balance between the financial sustainability of the electricity sector and consumer protection," said African Development Bank's Chief Energy Regulatory Expert, Ms Rhoda Mshana. "The Bank remains committed to supporting Lesotho in finding solutions that contribute to more reliable and accessible electricity for people and businesses."
The initiative is part of the African Development Bank's Africa Energy Sector Technical Assistance Program, and contributes to Mission 300, the joint African Development Bank-World Bank initiative to connect 300 million more Africans to electricity by 2030.
