A German solar company is stepping up efforts to seize assets from Lesotho as it pursues the tiny mountain kingdom for damages after it reneged on its contract to build a power station.<\/p>\n
Frazer Solar has begun seizing Lesotho\u2019s assets abroad in order to enforce \u20ac50m in contractual damages.<\/p>\n
It has already taken control of royalties that Lesotho earns on water and power supplies to South Africa, after a US court gave it the go-ahead last month to employ tactics similar to those used by creditors to chase countries that have defaulted on their debts.<\/p>\n
International asset seizures have increasingly become part of enforcing contracts against governments, including in Africa. Earlier this year a construction company sequestrated an international bank account of the Republic of Congo\u2019s state oil group over a contractual dispute with the government.<\/p>\n
Lesotho, one of the poorest countries in southern Africa, reneged on an \u201coutstanding opportunity\u201d to acquire renewable energy assets, including a 20-megawatt solar plant, when it abandoned a deal to finance the project in 2018, Frazer Solar said. This was despite sign-off by the office of the then-prime minister, it added. A South African arbitrator this year said the company should have about half of the \u20ac100m in damages it sought.<\/p>\n
Moeketsi Majoro, Lesotho\u2019s prime minister, said he did not know about Frazer Solar\u2019s damages claim until it was reported in South African newspapers. \u201cLesotho\u2019s properties both in Lesotho and overseas are protected and we don\u2019t think the action that they are proposing will succeed,\u201d Majoro said last month.<\/p>\n
But Frazer Solar said that it had notified the government more than two dozen times about its lawsuit and the seizures. The group has also moved to seize Lesotho\u2019s shares in the Mauritius-based West Indian Ocean Cable Company, one of Africa\u2019s biggest internet infrastructure providers.<\/p>\n
For Lesotho, which has few major industries and a small tax base, the seizures represent a big blow. Public spending makes up half of the country\u2019s gross domestic product. More than half of the 2m population are subsistence farmers and many people are forced to find work across the border in South Africa. Remittances are equivalent to about a fifth of GDP.<\/p>\n
The collapse of the Frazer Solar project is also bound up in the legacy of political instability in Lesotho, where institutions have been weakened by a history of graft and fragile coalition governments.<\/p>\n
The arbitration concluded that the deal collapsed because Majoro, then Lesotho\u2019s finance minister, favoured a rival renewable project backed by Chinese investors.<\/p>\n
The case \u201chas been left unanswered by the government of Lesotho\u201d, which failed to attend proceedings, it added. The prime minister did not respond to a request for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"
A German solar company is stepping up efforts to seize assets from Lesotho as it pursues the tiny mountain kingdom for damages after it reneged on its contract to build a power station. Frazer Solar has begun seizing Lesotho\u2019s assets abroad in order to enforce \u20ac50m in contractual damages. It has already taken control of […]<\/p>\n","protected":false},"author":87,"featured_media":933,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,7,8],"tags":[],"class_list":["post-932","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-head-lines","category-homepage-english"],"yoast_head":"\n