Private Solutions for Infrastructure in Lesotho

Infrastructure in Lesotho is relatively undeveloped with poor coverage and low-quality services common to many African countries that have low per capita incomes and government fiscal limitations that constrain infrastructure investment. This report finds that private participation in infrastructure could offer Lesotho three key advantages: augmenting budget resources in cases where the private sector undertakes to finance projects or services that would not otherwise be funded; improving the quality and efficiency of service delivery; and accelerating investments in infrastructure. By the same token, the report makes clear that private participation in infrastructure carries significant down-side risks that, despite the best of intentions, could lead to negative fiscal impacts, lower than expected service quality, disruptions to service, or more dire consequences. Accordingly, the need to establish private participation in infrastructure implementation and post-transaction oversight capacity is deemed to be of paramount importance if the Lesotho Government is to embrace an overall strategy for private participation in infrastructure.