Invitation for Pre-Qualification to Purchase a Majority Interest in Lesotho Electricity Company (Pty) Ltd – Extension of Deadline

The Privatisation Unit of the Ministry of Finance of the Government of Lesotho (the “Government”) invites companies to pre-qualify to bid for the purchase of a majority of the issued ordinary share capital of the Lesotho Electricity Company (Pty) Ltd (“LEC (Pty)”), the successor company to be formed to the Lesotho Electricity Corporation (“LEC”).  LEC is the State-owned electricity transmission and distribution operator in Lesotho.  It also owns a number of small hydro generation plants.

The Government aims to increase the population’s access to reliable supplies of electricity and to improve the performance of LEC. 

The Government is in the process of reforming the electricity sector.  As part of this a regulator, the Lesotho Electricity Authority, i.e. being established.  LEC (Pty) will receive a permanent concession to build, maintain and operate electricity transmission and distribution networks and retail electricity to customers on a monopoly basis within a specified Service Territory.  Furthermore, the Government has adopted a Tariff Plan to enable LEC (Pty) to achieve economic tariffs within three years.  An initial average tariff increase of 18% was implemented on 1^st January 2004, with further increases scheduled for 2005 and 2006.

The Government will corporatise LEC by creating a private company (Lesotho Electricity Company (Pty) Ltd) and vesting all of LEC’s assets, and certain other state owned assets, in the new entity.  Once LEC is corporatised, 70% of its issued capital will be sold to the successful bidder.  The price to be paid by the successful bidder for the majority interest will be fixed and the final selection of the successful bidder will be based mainly on the number of new electricity connections over a 10-year period which are offered as part of the bid. 

The shortlist of bidders will be selected from the responses to this advertisement through an evaluation process based on the following information being provided by interested firms:

   (i)          experience in rural development of infrastructure;

(ii)         experience in managing an electricity utility

(iii)        experience in managing a supply utility (water, gas, electricity)

(iv)        experience in managing an infrastructure business (wires or pipes)

(v)         experience of working in the Africa region

(vi)        audited financial statements of the last three years

(vii)       full details of consortium members, if applicable, including statements from each that the lead member is authorised to act on their behalf

(viii)      a statement that there are no conflicts of interest.   

A summary prospectus will shortly be available by e-mail from the Sales Advisory Group at the address below and on the Government’s website at http://www.lesotho.gov.ls.  In order to give interested parties sufficient time to investigate the opportunity the submission date has been extended by three weeks.  Pre-qualification submissions including full contact details of the company or consortium’s project manager, must be submitted on or before 12:00 hours (Lesotho time) on Monday 24^th May 2004 to:  

  Submissions up to 0.5MB will be accepted by e-mail; firms should request an acknowledgement of receipt.

19 April 2004