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April 24, 2024
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SA HIGH COURT THROWS OUT LESOTHO’S CASE

Maseru, Jan. 13 — The South African High Court has on Friday dealt a major blow to the Government of Lesotho (GOL) by throwing out its case to overturn Frazer Solar’s arbitration award. 

The government of Lesotho has lost to Frazer Solar and the South African Ministry of Justice thus the former has failed on every argument raised. 

The Judge has dismissed the case and ordered the government of Lesotho to pay costs to Frazer Solar and the South African Ministry of Justice.  The value of Frazer Solar’s claim including interest and costs is estimated to be €58 million (US $64 million, M1.2 billion).

In September 2018, Frazer Solar GmbH (FSG) of Germany signed an agreement with the Government of Lesotho (GOL) to develop a major solar and energy efficiency project with financing from the German government via development bank KFW.

Despite the project being approved by the then Prime Minister Dr. Thomas Thabane, the then Finance Minister Dr. Moeketsi Majoro refused to co-operate and participate in the project.

This led to a legal dispute between Frazer Solar and the Government of Lesotho which eventually went to arbitration in December 2019. Frazer Solar prevailed in the arbitration and was awarded €50 million plus costs and interest in January 2020.  The government of Lesotho neither participated in the legal process nor did they honour the award.  In May 2021 FSG began seizing GOL’s assets.

Moreover the Frazer Solar deal was ostensibly meant to reduce electricity imports. It involved the installation of solar water heaters, solar PV, and LED lights with the provision to incorporate large-scale batteries in off-grid and grid-tied applications.

According to Frazer Solar, it developed the entire project including a finance package for the government through European and African development banks.

In addition, all 350 000 non-electrified households in the country were earmarked to receive a solar lantern with an inbuilt mobile phone charger, thereby permanently eliminating the use of candles and paraffin as a lighting source.

The company’s managing director Robert Frazer, who was based in the country for the development, participated in weekly aid distributions which over the course of 2017 and 2018 saw food, clothing, and blankets delivered to thousands of families across the country.

However, the epic saga involving the botched deal saw the High Court of Lesotho in November 2022 ruling that the mammoth contract Frazer Solar signed with former Minister Temeki Tšolo in 2018 violated Lesotho’s constitution and procurement regulations.

The court had said this means the contract Frazer Solar accuses the government of breaching is null and void, dealing a blow to the company’s aggressive bid to confiscate Lesotho’s assets around the globe.

The High Court judgment had revealed how Tšolo and Frazer aggressively pushed for the contract despite being aware that the Cabinet had not approved it and procurement procedures had not been followed.

Tšolo signed the initial Memorandum of Understanding (MOU) with Frazer four days after former Prime Minister Dr. Majoro, who was then the Minister of Finance, refused to sign it.

Dr. Majoro was said to have told Tšolo that he could not sign the MOU before it had passed through the relevant officials. But Tšolo allegedly went ahead and signed the MOU on the government’s behalf.

The court said Tšolo lied to the cabinet that he had consulted the Ministers of Finance, Public Service, Local Government, Energy, and Development Planning.

Despite Dr. Majoro’s refusal to endorse it, Tšolo told Frazer, in a letter,that the government agreed and committed to the project.

Tšolo and Frazer went ahead to sign the Supply Agreement in September 2018 without cabinet approval although Tšolo did not have the authority to sign the agreement on the government’s behalf.

Meanwhile legal action to enforce the award is underway in multiple jurisdictions including but not exclusively limited to South Africa, Lesotho, UK, USA, Belgium and Mauritius.

Efforts to speak to the Government’s Secretary and other relevant Ministers were futile.

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