Harnessing Southern Africa’s Next Strategic Asset

Insights by Mr. Samuel Seboka

Water: The Asset Class We have Been Ignoring

Water is not a soft issue, it is a hard asset. Across the African continent, water insecurity has become a top-line economic risk. In Botswana, urban demand is already outpacing supply. In Lesotho, hydrological volatility threatens both energy generation and livelihoods. In South Africa, water availability directly impacts sectors that account for more than a third of national GDP. According to the Southern African Development Community (SADC), the region loses 6–10% of GDP annually due to water-related shocks. Yet capital markets still undervalue water as an investable asset class.

This is the paradox we must correct. As Standard Lesotho Bank, we believe that natural capital is bankable capital, and we are putting that belief to support one of the continent’s most ambitious water infrastructure initiatives: the Lesotho–Botswana Water Transfer Project .

Strategic Investment in the Future of Water

With a projected cost of USD 3 billion (M 54.6 billion), the project will transfer 150 million cubic metres of water annually to Botswana, while supplying an additional 158 million cubic metres to Lesotho and South Africa. Originating from a new dam on Lesotho’s Makhaleng River, this 700 km conveyance system represents a regional hedge against climate risk, one that delivers long-term utility, agricultural productivity, hydropower, and economic stability.

Valuing Natural Capital with a Banker’s Precision

At Standard Lesotho Bank, we see this project not just as a climate resilience measure, but as a multi-dimensional asset class, one that delivers yield across water security, energy access, trade facilitation, and regional integration. It exemplifies how natural infrastructure, when underwritten with rigour and foresight, can be structured into bankable, de-risked, and scalable investments.

According to the World Bank, green and sustainable infrastructure attracted over USD 133 billion (M 2.4 trillion) in investment in 2023. Natural capital funds are gaining traction as investors seek resilient, ESG-compliant long-term returns. The Taskforce on Nature-related Financial Disclosures and the African Natural Capital Alliance are also laying the policy groundwork to turn ecological assets into recognised economic units.

In that context, the Lesotho–Botswana Water Transfer Project offers more than water, it offers a new template for infrastructure investment in Africa.

The Case for Bank-Led Leadership

We have a responsibility to price risk accurately and capitalise sustainability intentionally. The  Lesotho–Botswana Water Transfer Project addresses both imperatives. It mitigates drought exposure in Botswana and parts of the North West and the Free State provinces of South Africa,  it enables agricultural expansion and empowers hydropower potential and strategic revenue in Lesotho  . For Botswana and South Africa, it means secure supply. For Lesotho, it is sovereign leverage. For investors, it is a long-duration infrastructure asset backed by state actors and multilateral governance.

More importantly, it reaffirms water not as a cost centre, but as a strategic commodity.

Standard Lesotho Bank is positioned at the nexus of infrastructure banking, climate finance, and sovereign strategy. We are not waiting for nature to be legislated into financial models. We are actively structuring deals that recognise water as the backbone of growth, and climate adaptation as the currency of regional development.

Conclusion: Water Finance is Economic Sovereignty

The Lesotho–Botswana Water Transfer Project is more than just a water project, it is a model through which Lesotho demonstrates intention on how we future-proof Southern Africa’s economies, elevate regional cooperation, and build infrastructure that does not just extract value from the environment but creates value by preserving it. By partnering with Orasecom in hosting the Climate Resilience Investment Conference, we are opening possibilities for dialogue on water, our nation's treasure chest to growth. We also affirm our purpose that says ‘Lesotho is our home, we drive her growth’.