The German solar company is pursuing the assets of the small kingdom of Lesotho

A German solar company is intensifying its efforts to drive assets out of Lesotho while pursuing the small mountain kingdom for damages after it renounced its contract to build a power plant.

Frazer Solar has begun seizing Lesotho’s assets abroad to raise 50 million euros in contract damages.

He has already taken control of the rights that Lesotho gains for water and energy supply in South Africa, after a U.S. court gave him access last month to employ tactics similar to those used by creditors to hunt down countries that have defaulted on their debts.

International seizures of property have become increasingly part of contract enforcement against governments, even in Africa. Earlier this year a construction company seized an international bank account of the State Oil Group of the Republic of Congo for a contractual dispute with the government.

Lesotho, one of the poorest countries in southern Africa, has given up an “exceptional opportunity” to acquire renewable energy assets, including a 20-megawatt solar plant, when it abandoned an agreement to fund the project in 2018, said Frazer Solar. It was despite the signing by the then prime minister’s office, he added. A South African arbitrator this year said the company should have about half of the € 100 million damages he claimed.

Moeketsi Majoro, the prime minister of Lesotho, said he would not know about Frazer Solar’s ​​claim until it was reported in South African newspapers. “Lesotho’s properties both in Lesotho and abroad are protected and we don’t think the action they are proposing will succeed,” Majoro said last month.

But Frazer Solar said it had notified the government more than two dozen times about its cause and seizures. The group has also moved to cut Lesotho’s stake in the Mauritius-based West Indian Ocean Company, one of the largest providers of Internet infrastructure in Africa.

For Lesotho, which has a few large industries and a small tax base, seizures represent a major blow. Public spending makes up half of the country’s gross domestic product. More than half of the 2 m population are subsistence farmers and many people are forced to find work across the border in South Africa. Remittances are equivalent to about one-fifth of GDP.

The collapse of the Frazer Solar project is also linked to the legacy of political instability in Lesotho, where institutions have been weakened by a history of grafts and fragile coalition governments.

The arbitration concluded that the agreement had been dropped because Majoro, then Lesotho’s finance minister, favored a renewable rival project backed by Chinese investors.

The case “was left unanswered by the Lesotho government,” which did not attend the proceedings, he added. The prime minister did not respond to a request for comment.

Majoro took power last year after octogenarian Tom Thabane abandoned a police investigation into the murder of his ex-wife. Thabane refuses to hurt. Thabane’s prime minister has been marked by scandals over the alleged looting of public contracts. Thabane has always denied corruption.

Frazer Solar “has skipped a lot of steps – they’ve even had a role to play in this,” said Kanono Thabane, managing director of Arbitrage, a Lesotho renewable energy company.

The German company said it had complied with the Lesotho government’s guidelines regarding the approval of the business “at any stage prior to the signing of the contract” and “it was assured by the office. of the Prime Minister that the project had received all the necessary approvals ”.

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