A Test for Accountable Climate Finance: Why the Lesotho Highlands Water Project Complaint Matters

In September 2025, communities affected by Phase II of the Lesotho Highlands Water Project (LHWP) submitted a formal complaint to the African Development Bank’s Independent Recourse Mechanism (IRM), detailing a range of environmental and social harms stemming from the project’s implementation. The IRM has since registered the complaint, formally kickstarting an accountability process.

This milestone marks a pivotal moment not just for the affected communities, but also for the AfDB’s broader commitment to accountability and the future of development finance across the continent. For years, these communities have pursued other avenues to hold the project accountable, with little to no success.  The complaint now places responsibility squarely on the Bank and its co-financiers to demonstrate whether accountability will lead to timely and meaningful remedy.

As African nations pursue increasingly ambitious infrastructure projects tied to climate resilience, water security, and the broader green transition, this case provides a timely and important test: can development be both impactful and rights-respecting?

This case is not only about one dam in Lesotho. It is about whether climate-aligned infrastructure across Africa will be delivered with transparency, participation, and enforceable safeguards or whether affected communities will be left to absorb the costs of “green” development.

It is a legacy case at a turning point.

The LHWP is one of Africa’s most ambitious and high-profile infrastructure undertakings, dating back to the 1980s. While Phase I brought undeniable infrastructure and economic gains, it also left behind a legacy of unresolved harm particularly in the form of displacement, loss of livelihoods, and long-term environmental degradation. For many affected communities, justice and redress for those impacts remain elusive even decades later.

Phase II offers a chance to shift that narrative. Affected communities have already raised critical concerns including inadequate consultation, delayed and opaque compensation, incomplete and unsafe relocation, loss of communal land and biodiversity, health and safety risks from blasting, gender-based impacts, ineffective grievance redress, and intimidation of community members. These harms are ongoing and preventable through timely mitigation and genuine dialogue.

While this complaint may not undo the injustices of Phase I, the AfDB now has an opportunity and responsibility to address the current harms and to prevent further violations in future phases of the project. Failure to act decisively risks repeating patterns of exclusion and harm that accountability mechanisms were designed to prevent.

Importantly, communities have expressed a clear preference for an IRM-facilitated problem-solving dialogue. Yet AfDB Management has not yet clearly indicated whether it will engage in mediation. That uncertainty matters. While decisions remain pending, blasting continues, relocation remains incomplete, and trust continues to erode. Delay in this context is not neutral; it has real consequences on the ground.

It's cross-country and cross-institutional.

Unlike many internationally financed projects, the LHWP isn’t just a domestic project. It is a bi-national initiative between the governments of Lesotho and South Africa, and is co-financed by multiple institutions, including the African Development Bank (AfDB), the Development Bank of Southern Africa (DBSA), the New Development Bank (NDB), and South Africa’s Trans-Caledon Tunnel Authority (TCTA).

This multi-jurisdictional setup makes the case especially important. It tests how accountability mechanisms and development banks can respond when harm occurs in projects that span borders, mandates, and legal regimes.

Can they coordinate effectively and avoid fragmenting accountability processes? Or will communities be left navigating parallel, slow-moving systems? The answers could shape how future transboundary climate infrastructure projects are governed across the continent.

Co-financing brings shared responsibility. Institutions cannot benefit from the legitimacy and climate credentials of a project while distancing themselves from its social and environmental impacts.

It sets a precedent for other megaprojects.

LHWP II is not unique in scope or ambition. Africa’s infrastructure pipeline is full of similarly complex, large-scale, and high-impact projects. What makes this case pivotal is that it may set a standard for how grievances are handled in projects that displace thousands, impact ecosystems, and alter the social fabric of entire regions.

A well-managed, transparent, and participatory resolution process could become a model. A delayed or fragmented one risks undermining confidence in climate finance itself, particularly when projects framed as green transition solutions are experienced locally as sources of displacement and insecurity.

The green transition depends on public trust. That trust requires more than environmental ambition; it requires enforceable safeguards and timely remedy.

It's an opportunity and a test for co-financiers.

The LHWP is not solely funded by the African Development Bank. Other key co-financiers include the Development Bank of Southern Africa (DBSA) and the New Development Bank (NDB). While the AfDB’s Independent Recourse Mechanism (IRM) is relatively well-established, the same cannot yet be said for its co-financing counterparts.

The DBSA has recently set up its Independent Grievance Redress Mechanism (IGRM), and affected communities have already filed a complaint. However, no substantive response has yet been received. This case will serve as the first major test of DBSA’s new mechanism and its accessibility, responsiveness, and independence.

The NDB has yet to establish an independent accountability mechanism. Despite repeated outreach by community representatives and their advisors, the NDB has not responded to requests for engagement. This silence underscores the urgent need for the Bank to both establish a credible accountability mechanism and participate meaningfully in coordinated remedy efforts.

Communities affected by co-financed projects must have consistent and equitable access to remedy, regardless of which financier is involved.

Importantly, the IRM, being the most experienced among the three, has a unique opportunity to lead by example. Through transparency, responsiveness, and inclusive engagement, the IRM can help shape a culture of accountability among its peers. 

A coordinated and collaborative process among co-financiers would reduce duplication, ease the burden on complainants, and increase the likelihood of comprehensive remedy.

Conclusion

With the registration of this complaint, the focus turns to how the process unfolds and whether it will centre the voices and needs of the affected communities, uphold principles of transparency and fairness, and ultimately lead to meaningful remedy.

The AfDB’s Management and Board, along with its co-financiers, now face a defining moment. Will they move swiftly and collaboratively to resolve ongoing harms? Or will communities continue to wait while project activities advance?

This case is not only about compliance. It is about whether climate and infrastructure finance in Africa will be grounded in participation, fairness, and enforceable accountability.

We look forward to working with Seinoli Legal Centre to support the affected communities throughout the IRM process.