STRATEGIC PLAN 2014/15 - 2018/19 JANUARY 2014

LEWA Strategic Plan 2014/15 – 2018/19 Page 1

LESOTHO ELECTRICITY AND WATER AUTHORITY

STRATEGIC PLAN

2014/15 - 2018/19

JANUARY 2014


Contents

EXECUTIVE SUMMARY - STRATEGIC PLAN DASHBOARD ........................................................................ 4

1.0 INTRODUCTION ........................................................................................................................... 5

2.0 IDENTITY AND MANDATE ............................................................................................................ 5

3.0 METHODOLOGY AND APPROACH ............................................................................................... 8

4.0 THE VISION, MISSION AND VALUE STATEMENTS ........................................................................ 8

5.0 ANALYSIS OF THE OPERATING ENVIRONMENT ......................................................................... 10

6.0 ANALYSIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT) ................. 17

7.0 STRATEGIC OBJECTIVES FOR 2014/15 – 2018/19...................................................................... 18

8.0 QUICK WINS ............................................................................................................................... 19

9.0 GOVERNANCE STRUCTURE ........................................................................................................ 20

10.0 LOGICAL FRAMEWORK MATRIX ................................................................................................ 27

11.0 BALANCED SCORE CARD……………………………………………………………………………………………………...43

12.0 REPORTING………………………………………………………………………………………………………………………….44


List of Acronyms

AfDB African Development Bank

CGHB Corporate Governance Hand Book

COW Commissioner of Water

DOE Department of Energy

DRWS Department of Rural Water Supply

IFRS International Financial Reporting Standards

LCA Lesotho Communications Authority

LEC Lesotho Electricity Company

LEWA Lesotho Electricity and Water Authority

LRA Lesotho Revenue Authority

MDGs Millennium Development Goals

MEMWA Ministry of Energy, Meteorology and Water Affairs

NGOs Non-Governmental Organizations

NSDP National Strategic Development Plan

PPAP Planet, Profit and People (Integrated Reporting)

PRS Poverty Reduction Strategy

PS Principal Secretary

QOSSS Quality of Service and Supply Standards

RERA Regional Energy Regulators Association of Southern Africa

UNDP United Nations Development Programme

VAT Value Added Tax

WASCO Water and Sewerage Company

WB World Bank


EXECUTIVE SUMMARY - STRATEGIC PLAN DASHBOARD VISION

TO BE A WORLD CLASS UTILITIES REGULATOR THAT FACILITATES DELIVERY OF AFFORDABLE, SUSTAINABLE AND

QUALITY SERVICES.

MISSION

TO REGULATE THE ELECTRICITY, URBAN WATER AND SEWERAGE SERVICES IN THE INTERESTS OF ALL STAKEHOLDERS

THROUGH TRANSPARENCY, CONSISTENCY, PROFESSIONALISM AND TEAMWORK.

STRATEGIC OBJECTIVES

To determine Tariffs and Charges

To ensure Security of Supply To develop and Implement

Regulatory Frameworks

To monitor Licensees

Performance and

Compliance

To build and Operate a Sustainable

Organization

To promote Stakeholder Awareness, Empowerment and Protection

To increase access to electricity and water and sewerage services

STRATEGIES

Determine Electricity Tariffs and

Charges

Determine and implement

Security of Supply Options for

Electricity

Review the LEWA Act Monitor Licensees

Performance and

Compliance

Review and Implement: Board Governance

processes and Administrative policies,

processes and procedures

Develop and implement

stakeholder communications

programme

Manage Universal Access Fund

for electricity

Determine Tariffs and Charges

for WASCO

Determine and implement

Security of Supply Options for

Water

Develop and review

Subsidiary Legislation and

Regulatory Tools for Water

and Electricity

Resolve Customers

and Licensees

complaints

Develop and Implement: Integrated and Statutory Reporting, and Integrated Information Management system

Determine stakeholders’

awareness about LEWA and

stakeholders’ information

requirements

Establish UAF for Water and

sewerage services

Develop and implement: Pro poor mechanism in electricity, Principles for Generation tariffs determination, Power Procurement guidelines and Electricity Resale Guidelines

Implement Regulatory

Frameworks

Sustain a participatory Peer Review exercise Collaborate with other

Regulatory Bodies locally and in

the region

Determine options for

increasing access to sewerage

services

Review organizational structure and Recruit staff

Ministerial Consultations and

Anniversary celebrations

Construct LEWA House, Acquire Testing

facilities and equipment

Publish and disseminate LEWA

information

<<<<<<<<<< OUR CORE VALUES >>>>>>>>>>

Integrity Efficiency Excellence Professionalism Teamwork


1.0 INTRODUCTION

1.1 The Strategic Plan has defined LEWA’s vision, mission, strategic objectives and a

comprehensive action programme, and has sought to grasp and understand in a

deeper and more meaningful way an operational mechanism that will enable the

Authority to effectively and efficiently deliver on its mandate for the period 2014/15 –

2018/19.

1.2 As an organization established to formulate a reformist regulatory regime,

considering that regulation is a relatively new phenomenon in our part of the world, it

becomes imperative therefore, in drawing up and creating suitable regulatory

instruments, that the driving forces behind this process are fully appreciated and

managed, in which case the Strategic Plan becomes a perfect tool to permit all these

intentions to be actualized.

1.3 The Strategic Planning exercise that LEWA undertook in developing the Strategic

Plan, can best be described as a process of devising a framework that will enable

the Authority to pursue a disciplined effort to produce fundamental decisions and

actions that will shape and guide what the organization is, what it does, and the

underlying reasons for its actions.

2.0 IDENTITY AND MANDATE

2.1 Genesis and brief history

Prior to its current form and structure, the Lesotho Electricity and Water Authority (LEWA) was established and known since coming into operation under the Lesotho Electricity Authority Act of 2002, as the Lesotho Electricity Authority, for the reason that its primary mandate was limited to regulating the electricity industry only.

The founding legislation makes provision for all matters pertaining to the governance and internal administration of the Authority, including a proper delineation of its functions with particular reference to ensuring the security of electricity supply under economic and cost-effective conditions in Lesotho.

Creation of the Lesotho Electricity Authority arose as a direct product of the Lesotho Utilities Sector Reform Project which was implemented under a funding arrangement by the Government of Lesotho with the International Financing Institutions that included the World Bank (WB) and the African Development Bank (AfDB).

2.2 Structure of LEWA

LEWA is headed by a Chief Executive who reports to the Board of Directors and directs the work through six Departments:


2.2.1 Technical Regulation Electricity 2.2.2 Technical Regulation Water 2.2.3 Legal Services 2.2.4 Economic Regulation 2.2.5 Customer Affairs 2.2.6 Human Resources, Finance and Administration

2.3 Revision of Mandate

The Lesotho Electricity Authority Amendment Act of 2011 was passed to broaden the mandate and scope of the former LEA to also cover and provide regulatory services for the urban water and sewerage services sub-sector.

As part of the Amendment Act under reference, a Statement of Objects and Reasons underlying the Amendment Act were circulated by the authority of the Minister responsible for Natural Resources, and thus effectively changed the name of the organization to the “Lesotho Electricity and Water Authority”, or LEWA in its short form.

2.4 The rationale for a new Strategic Plan All the regulatory instruments developed by the Authority were focusing primarily

on the electricity sub-sector, until the point when the Act was amended to make provision for the regulation of the water sub-sector, which development occasioned the development of additional instruments to enable the Authority to adequately handle its expanded mandate.

The impact of this development touched on the core of the functions of the Authority, and thus necessitated fundamental structural adjustments to be made to handle the additional responsibilities. Apart from developing new regulatory instruments, some of the essential requirements revolved around amendment of the organizational structure and recruitment of additional personnel.

It is the change of the core business of the Authority that has made it necessary for a new Strategic Plan to be developed to ensure that, as processes get cascaded down from the changed mandate, there is a clear harmonization in the development and roll-out of strategies. Furthermore, the previous strategic plan, ending in March 2014, has necessitated the development of the new one for continuity.

2.5 Review of the previous Strategic Plan

In order to craft a clear road map for the next 5 years, It was deemed prudent to assess the Authority’s performance on the previous Strategic Plan. The resulting outcomes have served as a useful input into the strategic planning exercise.

Strategic Focus 2009-2013

Assessment per

rating scheme

below

Underlying reasons

Internal process (operations management

processes, regulatory and social processes and

business processes)

3 Inability to meet some

statutory timeframes

Public Awareness, Education and Branding 2 LEWA is partially known


This is the rating scale used to evaluate the performance of the previous Strategic Plan:

1 = Did not meet requirements

2 = Partially met requirements

3 = Met requirements

4 = Partially exceeded requirements

5 = Exceeded requirements

2.6 Parameters for the new Strategic Plan The Strategic Plan takes into account the broadened scope of services of the

Lesotho Electricity and Water Authority as derived from the portfolio of functions as outlined in Section 7 of the LEA Amendment Act of 2011.

Some of the key developments that have occurred as a consequence of the

expanded mandate include the revision of the organizational structure, as well as the design and publication of new regulatory instruments. The Strategic Plan therefore recognizes that the business of the Authority has changed from what it was 5 years ago, and that a set of incremental activities and projects forms part of the planned strategic initiatives.

(sustainable public empowerment on electricity and regulation issues)

to the public

Advocacy (networking and collaboration with key stakeholders)

4 Government support

Regional integration

Facilitating Universal Access

(accessible and affordable electricity and water

for all)

4 Collection,

disbursement of funds

on approved projects

Ensuring Security of Supply (water and electricity

supply efficiency and sufficiency)

4 Active participation and

implementation of

electricity Bulk Pass

through costs principle

Human resource management and development

(improved employee productivity and

performance at the work place)

4 Training of staff and

continuous

professional

development.


3.0 METHODOLOGY AND APPROACH

3.1 Literature Review

A number of documents which provided guidance on the mandate and nature of operations of the Authority can generally be classified into the following broad categories:

i. Founding Legislation, Governance and Administrative Policies ii. Regulatory Instruments (Rules and Regulations) iii. Regulatory Guidelines and Reports

3.2 Staff consultations

All inclusive staff consultations were carried out and that provided assurance that the strategic plan has the necessary employees’ buy-in.

3.3 Strategic Planning Workshop

An interactive strategic planning workshop was held to create a forum for the Management Team to review the Authority’s performance under the previous Strategic Plan, and to set new strategic objectives for the 5 year planning period commencing in April 2014 through to March 2019. The Strategic Plan was subjected to a validation process by a combined group of internal and external stakeholders, as a way of ensuring that the latter group’s perspectives are taken on board within the process of formulating the new strategic objectives.

3.4 Board of Directors

In fulfillment of its responsibilities as the custodian of the Strategic Plan, the Board of Directors actively participated in the development of the Strategic Plan.

4.0 THE VISION, MISSION AND VALUE STATEMENTS

VISION

To be a world class utilities regulator that facilitates delivery of affordable, sustainable and

quality services


MISSION STATEMENT

To regulate the electricity, urban water and sewerage services in the interests of all

stakeholders through transparency, consistency, professionalism and teamwork.

Our motto

A partner to all for sustainable services

Re selekaneng sa moshoelella

Value Statements

The value statements reflect what the Authority stands for and how it is going to conduct

itself. In its quest to comply with the LEA Act 2002 as amended, legislation relevant to

regulation, and good corporate governance practices, the Authority has adopted the

following values:

Professionalism

The Authority shall undertake, at all times, a competent and committed approach in line with

professional ethics and standards.

Teamwork

The Authority shall at all times, embrace team work, mutual cooperation, extensive consultation

and appreciation of diverse perspectives in the discharge of its duties and functions.

Efficiency

The Authority shall make regulatory decisions without undue delay using minimum resources

available.

Integrity

The Authority’s decisions and practices shall be honest, reliable, ethical and unbiased.

Excellence

The Authority shall be a high quality, continuously improving and self-aware institution.


Regulatory Principles

The Authority’s adherence to sound regulatory principles as a Regulator is key to delivering

on its mandate and achieving its objectives. In this regard, the Authority within its legal

mandate, has adopted the following internationally accepted regulatory principles

Consistency and Predictability

The Regulator should endeavor to act in a consistent manner and its decisions should have a

reasonable degree of predictability based on previous rulings in similar matters in line with best

practices obtaining in similar regulatory settings.

Transparency

The Regulator should ensure, at all times that the entire regulation process is transparent and

open to public scrutiny and stakeholders’ participation.

Accountability

The Regulator should recognize its responsibility to stakeholders and the public and ensure

accountability at all levels

Neutrality

The Regulator should be neutral, fair and non-discriminatory to all.

5.0 ANALYSIS OF THE OPERATING ENVIRONMENT

The operating environment, as depicted in the schematic presentation below, is

characterized by the following:

Identity, Roles and Interests of the Direct Stakeholders. Direct Stakeholders are critical

for the realization of the strategic objectives of the Authority

Identity, Roles and Interests of the Indirect Stakeholders. Indirect Stakeholders, if not

adequately dealt with in terms of their interests and requirements may present

impediments, but not an absolute cessation, to the operations or realization of the

strategic objectives

Practices and Prejudices which may hinder fruitful engagement within institutions

identified in the operating environment.

Legal and Regulatory Framework – Pieces of Legislation, Regulations, Guidelines which

the Authority has to operate within.

Shaping Forces or Forces that compel change (often induced externally) – these include

human rights awareness, political landscape, economic factors and ICT.


5.1 Direct Stakeholders

Identity

Our Interest from

them

Their Interests from us

LEC, WASCO and LHDA

Cost effective (economic and financial viability)

Affordable, reliable, efficient, sustainable, and high quality services

Compliance

Tariffs that will ensure cost recovery and good returns

Information asymmetry

Indirect Stakeholders

Indirect Stakeholders

Direct

Stakeholders

Direct

Stakeholders

Practices and

Attitudes

Legal Framework LEWA

ICT

Human

rights

awarene

ss

Political

landscape Economic

factors


Identity

Our Interest from

them


MEMWA (DoE and COW)

Clear segregation and implementation of responsibilities

Environmental Protection

Formulate clear policy, regulatory legislative framework

Budget support

Timely approval of budget

Identification of UAF Projects

Increase in access to quality services

Universal access to quality services

Private Public Partnership

Policy implementation

Parliament Timely Approval of amendments and subsidiary legislation

Raising awareness about LEWA

Increase in access to quality services

Universal access to quality services

Private Public Partnership

Policy implementation

Competent Authorities

Collaboration and cooperation

Fair, transparent regulatory processes

Consumers

Efficient use of electricity and water services

Timely payments of customer bills

No illegal connections and vandalism

Affordable, reliable, efficient, sustainable and quality services

Timely resolution of complaints

DRWS Quality services

Compliance

Guidance on Best practice

Public Support of the regulatory systems

No vandalism

Information

Fair processes and practices

Employees High performing and ethical staff

Competitive remuneration package and benefits

Suppliers of goods and services

Compliance to tendering procedure

Competitive services

Timely provision of quality goods and services

Transparent and fair procurement processes

Timely payment


Note: The Board is recognized as an integral part of the Authority, which can also assume

a status of an external stakeholder in terms of their expectations from the

Management, such as reports and service standards.

5.2 Indirect Stakeholders

Identity

Our Interest from them


Media Good/accurate publicity

Access to Information (Regulatory)

Adverts

NGOs Buy-in and commitment

Transparent Regulatory processes

Development and Cooperating partners

Financial and technical support

Clear objectives and strategies

Publicity/ mileage

Political parties Understanding of the role of LEWA

Buy-in

Publicity / mileage

Meeting political agendas

Potential licensees

Application for License to conform with regulatory instruments

Participation in the provision of electricity, water and sewerage services

Clear, fair and transparent regulatory processes for licensing, tariff setting and compliance monitoring and enforcement

Regulatory Associations

Collaboration, cooperation and harmonization of the regulatory instruments

Collaboration, cooperation and harmonization of the regulatory instruments

Business Sector Support the licensees in complying with the set standards and regulations

Fair regulation and affordable tariffs.

Academic and Research institutions

Carrying out of research, learning and teaching in regulation of electricity, water supply and sewerage services

Support in research, learning and teaching of electricity, water supply and sewerage services


5.3 Legal and Regulatory Environment

The documents below provided guidance on the development of the Strategic Plan

as it relates to the Authority’s mandate.

5.3.1 Water and Energy Policies, Vision 2020, Millennium Development Goals

(MDGs), Poverty Reduction Strategy (PRS), National Goals/Targets under the

National Strategic Development Plan (NSDP).

5.3.2 LEA Act of 2006 as amended, Water Act, Environment Act, Public Health

Order, Interpretation Act (as amended), Land Act, Companies Act of 2011,

Local Government Act, Public Finance and Management Act, Income Tax Act,

Value Added Tax, LRA Act, WASCO and LEC (Establishing and Vesting) Acts

5.3.3 Relevant Subsidiary Legislations (include regulations and other by-laws)

5.3.4 Corporate Governance Hand Book, LEWA Operational Policy Framework

5.3.5 Regulatory Instruments such as QoSSS, License and Standards

5.3.6 International Financial Reporting Standards (IFRS)

5.4 Situational Analysis – key considerations

5.4.1 Governance

In terms of the assessment carried out, the Authority has attained a

reasonable level of maturity and made satisfactory strides in setting up the

governance structures and processes that are contemplated under the King III

Code of Governance and similar documents. The Board and Committee

Charters have been developed to guide the established bodies on how to

conduct their routine functions.

5.4.2 Administrative Policy Framework

Financial Management

The internal control systems are generally embedded and will need to be

continually monitored to strengthen the already existing financial discipline.

Financial Reporting systems are adequately developed, but will constantly

need to be reviewed to respond to the stakeholder information

requirements.

Human Resources Management and Development

In the endeavor for the Authority to be served by a productive and

motivated workforce, a review of the Human Resources Policies and

Procedures will need to be undertaken. The exercise will be informed in

this instance by the need to align such policies to the best industry


practices, as well as the desires and aspirations that came to light during

the staff interviews and workshop sessions.

A Human Resources Development Plan has featured as a crucial initiative

that will continue to be pursued to ensure that a comprehensive set of

skills is developed to effectively undertake the specialized regulatory

functions of the Authority. This will be coupled with internal information

sharing sessions through staff presentations and reports, and

enhancement of reading culture through establishment of the library.

Procurement

To strengthen the Authority’s procurement policy for purposes of

transparency and fairness, policies and procedures shall be reviewed to

ensure that the Authority derives value for money (VFM) in all its

procurement transactions.

Communications Strategy

The Authority will intensify the awareness campaigns within the respective

communities that it interfaces with through implementation of a well

structured and responsive communications strategy.

5.4.3 Operational Challenges

Adequacy of the Regulation Instruments and National Policy

The Authority has developed a number of regulatory instruments.

However, there is still a need to develop and/ review some regulatory

instruments due to the expanded mandate to regulate the urban water and

sewerage services in addition to the evolving nature of the regulation of

service provision. Notwithstanding the above, the critical issue is the lack

of a national energy policy on which some of these new instruments would

be anchored.

Performance Monitoring of the Licensees

Another area of strategic focus in the planning period relates to monitoring

of Licensees performance to ensure compliance with the regulatory

prescripts and service targets. A suite of strategies are contemplated in

this Strategic Plan to facilitate delivery on this important mandate of the

Authority.


Universal Access Fund (UAF)

At the point of preparing the Strategic Plan, the Universal Access Fund

had about M30m as funds earmarked for projects that would facilitate

access to electricity supply, especially in the remote areas of the country.

In liaison with the appropriate stakeholders, the Authority will explore

mechanisms that will facilitate utilization of the UAF for the purposes that it

was created.

Consolidation of Regulatory Training

The Regulator (LEWA) is faced with the challenge of developing

appropriate regulatory skills across the broad spectrum of the regulated

industries, and may in this instance rely heavily on external consultancy

interventions. This situation alone calls for a huge investment in the skills

development of the Authority’s staff to ensure that the competency levels

are raised to a point where they can match those obtaining within the

ranks of the Licensees or service providers.

Occasions have arisen and will continue to arise where the Licensees may

find difficulty embracing the new ethos of regulation, and may involve

themselves in acts which at times may appear to be hostile and

uncooperative. When such signs are picked up, it is often an indication of

the lack of understanding and appreciation of the expected role to be

played by the regulator, more especially when regulation itself is a new

phenomenon in the local environment.


6.0 ANALYSIS OF STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS

(SWOT)

This process has been undertaken through a range of techniques, among which was the

use of the conventional SWOT Analysis, the results of which are presented in Figure 1 and

matrix below in Table 1.

Figure 1

Table 1 SWOT ANALYSIS RESULTS

STRENGTHS

WEAKNESSES

Financial Independence

Skilled Employees

Independence in decision making

Low staff turnover (stability)

Small and Manageable organization

Professionalism

Offer market related remuneration

Poor teamwork

Failure to meet statutory obligations (eg reporting targets)

Partial implementation of PMS

Lack of dedicated IT personnel

Experience or knowledge gap

Inadequate understanding of governing legislation

OPPORTUNITIES AND THREATS

Represent conditions out there (surrounding the Authority)

which are critical for its SUSTAINABILITY, RE-POSITIONING

OR GROWTH

STRATEGY: Maximize Opportunities

Minimize Threats (Risk)

Strategy: > Seize OPPORTUNITIES and >MANAGE

THREATS (RISK)

STRENGTHS

WEAKNESSES

{Largely within the control

of the Organization}


Clear governance framework and structure

Performance Management System

Drive to do work

Substantial experience in regulation

Regional integration

Lack of own office building

Not well branded

OPPORTUNITIES

THREATS

Change in stakeholders needs and preferences

Change in policy

Collaboration with other regulatory bodies and competent authorities

Possible donor support

Reforms and extended Authority’s mandate

Dependency on licensee for funding

Licensees’ non-compliance

Change in policy

Change in stakeholder needs and preferences

Inadequate security of supply

Dependency on imported supply- Tariffs

The concept of water as a human right.

7.0 STRATEGIC OBJECTIVES FOR 2014/15 – 2018/19

7.1 Strategic Goals

Strategic Goals, by definition, represent the primary purpose(s) for which an organization

has been established.

LEWA’s Strategic Goals:

7.2 Strategic Objectives

Strategic Objectives flow from the Strategic Goals to define the key initiatives that

will be pursued to attain the organizational mandate.

LEWA’s Strategic Objectives for the Planning Period 2014/15 – 2018/19:

Strategic Objective 1

To determine Tariffs and Charges


To ensure Security of Supply

i) Regulation of the electricity sector

ii) Regulation of the urban water and sewerage services



To develop and implement Regulatory Frameworks


To monitor Licensees Performance and Compliance


To build sustainable organization


To promote Stakeholder Awareness, Empowerment and Protection


To increase access to electricity, water and sewerage services.

8.0 QUICK WINS

To facilitate a smooth roll-out of the Strategic Plan, a set of initial actions is outlined in this

section in a manner that clearly establishes the strategic poise and preparedness by the

LEWA to pursue the proposed Strategic Objectives and undertake the related planned

activities.

8.1 Review and Update the Policy Framework

The strategic planning process has provided a good opportunity for the Authority to

undertake introspection and reflect on areas where gaps exist in the Policy

Framework and in the general manner of doing business. The results of the

consultation process should serve as a crucial input into the review and update of

the various policies and procedures. Teamwork as reflected on the development of

the Strategic Plan must be entrenched within all the sections of the Authority going

forward. The development of the action plans to implement the plan are critical.

8.2 Stakeholders’ Awareness and Engagement

Given its previous endeavors, the Authority has been set out to communicate with the

Authority’s stakeholders and has been partially successful. Howeve,r there is a need

to continue refining current engagement activities with stakeholders to engender the

latter’s buy-in increased awareness and education that are critical for the successful

regulatory system.

8.3 Advocacy with the Ministry for Projects identification


The Authority has recorded considerable achievements in the mobilization of funds

for the Universal Access Fund. In view of the purpose for which the UAF was

established, a considerable amount of work needs to be done to ensure that the

collected funds are applied to the deserving projects, and this will call for an effective

process of mobilizing the key players to roll-out the utilization of the Fund.

Specifically sustained advocacy for the identification of the UAF projects by the

Ministry is a priority.

8.4 Review of Job Descriptions

The job descriptions shall be reviewed in line with the new organizational structure

and major activities to be undertaken by the Authority.

9.0 GOVERNANCE STRUCTURE

The Board is responsible for the Authority’s corporate governance and provides effective

leadership based on ethical foundation. In this regard the Board is responsible for providing

the strategic direction of the Authority for the executive management. The Authority’s board

is also responsible for considering the legitimate interests and expectations of the

Authority’s stakeholders in its deliberations, decisions and actions.

9.1 Board Committees

The Board has further established four Committees that are charged with specific

responsibility which they discharge under the direction and on behalf of the Board.

For each Committee a clear set of Terms of Reference has been developed and

approved by the Board as a way of providing a framework within which each

Committee can and should conduct its business. The Board Committees are

presented here below as follows:

9.1.1 The Audit and Risk Committee

Risk management process involves the planning, arranging and controlling of

activities and resources in order to minimize the impact on the business or

organization. For effective risk management in LEWA, it is prudent that the

Committee responsible for risk should also deal with audit function of the

organization. This is premised on the interrelation between internal controls and

inherent risk management. The role of the Audit and Risk Committee is to assist the

Board with discharging its responsibilities with regard to risk management and audit.

With respect to risk, the Committee shall:

Consider the risk strategy and policy;


Monitor the process at operational level and report to the Board thereon;

and

Consider the results of risk management and internal control processes.

With respect to the audit function, the Committee shall

Assist the Board with developing and maintaining effective systems of

internal control;

Review the work of the Internal and External auditors; and

Review the Annual Financial Statements and the Audit Report.

The Audit Committee is therefore renamed Audit and Risk Committee to fully reflect

the functions of the Committee in relation to both audit and risk management

functions.

9.1.2 The Human Resources, Finance and Administration Committee

The role of the Human Resources, Finance and Administration Committee is

to assist the Board with discharging its responsibilities as an employer and

ensuring that the LEWA is managed in a financially sustainable manner.

9.1.3 Customer Services Committee

The role of the Customer Services Committee is to assist the Board in the

discharge of its responsibilities to ensure that proper quality standards are

adhered to in the provision of services.

9.1.4 Pricing and Tariffs Committee

The Pricing and Tariff Committee has been established for the purposes of

evaluating and reviewing tariff adjustment submissions from the service

providers and approving appropriate pricing and tariff regimes.

The terms of reference of one of the committees must be amended or a new

committee be formed to deal with the Board and the Authority in relation to ethics.

9.2 Organizational Structure

The organizational structure presented here below has been considered to be both

suitable and adequate to facilitate the discharge by LEWA of its mandate during the

period 2014/15 – 2018/19 including improvement of the Authority on its public

awareness activities and on both compliance monitoring and risk management.

Compliance Monitoring and Risk Management

Following an assessment of the previous Strategic Plan, it has become necessary to

focus more on compliance and risk management. Over the years, the main source of

concern has always been non-compliance by the licensed utilities. Related thereto is

the need to ensure that LEWA is adhering to its own internal policies, procedures,


manuals and standards. To this end, the compliance function has been identified as

one of the key functions that will drive the current strategy. The function shall include

both the internal and external compliance matters of the organization and the

monitoring of licensees’ compliance to the regulatory requirements.

Having recently developed a comprehensive risk management strategy and plan, its

implementation under the proposed Strategic Plan becomes critical. Cognizant of the

costs related with monitoring the implementation of the risk policy, it is considered

practical that compliance and risk functions should reside in the Legal Services

Department with a creation of a position of Compliance and Risk Officer during the

2014/15 financial year.

The Authority’s stakeholders’ communication

In line with the assessment of the implementation of the past strategic plan, the

Authority has to improve on its public awareness and stakeholders’ empowerment.

The understanding is that all functions of the organisation that deal with

stakeholders’ communication must be coordinated and integrated under one

Department. This will be helpful in ensuring effective monitoring, coordination and

control. From a knowledge centric perspective this will help in designing programs

that are designed to assist the organisation manage both internal and external

communication efforts.

Hence both Consumer Affairs and Public Relations activities must be under one

Department, namely, Consumer Affairs and Communications Department (CACD) in

place of Customer Affairs department. The Department shall be responsible for all

the consumer affairs and public relations activities of the Authority. Its staff

compliment should be made up of: Manager, Consumer Affairs officer and Public

Relations Officer. This development means the public relations function is moved

from the CE’s office to the newly constituted CACD.

Secretarial functions within the Authority

The Authority currently has two different grades for Executive Secretary – Grade 3

and the Administrative Secretary Legal services (ADSL) – Grade 4. In assessing the

Authority’s progress on the previous Strategic Plan, it became evident that there is a

need to align the terms of reference of each position with the workload and expertise

required thereto. All positions, save that of Administrative Secretary – Legal

Services, have been found to be appropriately matched with the job requirements.

With respect to the Administrative Secretary, the workload in the position has

increased significantly and it is anticipated that it will continue doing in the

foreseeable future. The functions and responsibilities of the position and that of the

Executive Secretary have been found to be similar in all material respects in relation

to the required skills, responsibilities, abilities and knowledge.


In order to address this anomaly, the grade 4 of the Authority is abolished and the

ADSL is moved to grade 3. This effectively means that the LEWA now has 6 grades

and must be renumbered accordingly following the abolition of the current grade 4.


Lesotho Electricity and Water Authority (LEWA) Organogram

Chief Executive

Manager

Technical Regulation Water

Performance

Analyst Water

Inspector water

Water Quality Officer

Manager

Technical Regulation

Electricity

Performance

Analyst Electricity

Inspector Electricity

Manager

Finance,HR&Admin

Accountant

Assistant

Accountant&Admin

Driver

Office

Assistant

Receptionist

Human Resources Officer

Manager

Economic Regulation

Economic Analyst

Manager

Consumer Affairs and Communications

cunsumer Affairs

Officer

Public Relations

Officer

Manager

Legal Services

Compliance and Risk Officer

Legal Officer

Admin. Secretary Legal Services

Executive Secreatry

Driver CE


9.3 LEWA Departments

9.3.1 Technical Regulation – Electricity The Department takes a lead role in technical regulation of the

electricity sector, with particular emphasis on safety, security and

quality of supply, as well as development and implementation of

technical rules, codes and standards.

9.3.2 Technical Regulation – Water

The Department takes a lead role in technical regulation of the

urban water and sewerage services sub-sector, with particular

emphasis on safety, security and quality of supply, and

development and implementation of technical rules, codes and

standards.

9.3.3 Economic Regulation

The Department’s primary responsibility is to regulate electricity,

urban water and sewerage services tariffs and charges. The

Department also plays a key role in developing pricing and

regulatory instruments that are essential in determining how

prices are set in these sectors.

9.3.4 Legal Services

The Department is charged with the responsibility of ensuring

that there exists a fully developed and adequate Regulatory

Framework as constituted by a suite of rules, regulations and

procedures, which the service providers have to be compliant

with at all times. The Department also provides secretarial

services to the Board and legal advice to the Authority.

Compliance and risk functions are coordinated by the

Department.

9.3.5 Consumer Affairs and Communications

The Department acts an interface between the consumers and

the service providers, with emphasis on resolution of complaints,

or other related issues that must be adequately attended to.

Furthermore it deals with stakeholders’ awareness, outreach and

education programmes with the ultimate goal of attaining their

sustained empowerment. Another key area is that of discharging

public relation functions of the Authority paying special attention

to the promotion of the LEWA brand.


9.3.6 Human Resources, Finance and Administration The Department is responsible for financial management of the Authority including the preparation and presentation of financial statements. It also takes lead role in the development of the Authority’s human resources and administration policies and ensures their efficient and effective implementation.


10.0 LOGICAL FRAMEWORK MATRIX

LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 1 To determine Tariffs and Charges

Strategies

Activities

Performance Indicators

Risks and Assumptions

Time Profile

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

1- Determine Electricity Tariffs and charges

Review submission by Licensees

Electricity end-user Tariffs and charges approved by the Board and publicized

Thorough consultations will yield fair price/tariff structure

Adequate and credible data

submission by the licensee

yes yes yes yes yes

2- Determine Tariffs and charges for WASCO

Review submission by WASCO

Water end- user Tariffs and charges approved by the Board and publicized

Thorough consultations will yield fair price/tariff structure

Adequate and credible data submission by the licensee

yes

yes

yes

yes

yes

3- Formulate pro-poor pricing mechanism in electricity

Prepare consultation document in line with Government Policy

Carry out stakeholder consultation

Construct a tariff re-balancing model

Implementation of the mechanism

Record of consultations

Board Approval Pro-poor tariffs

Government Policy will provide guidance

Cooperation and support will be obtained from the Licensees

Acceptability by customers

yes

yes

yes

yes

yes

4- Develop and implement: Procurement and engagement Consultants Secured funding confirmed yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 1 To determine Tariffs and Charges

Strategies

Activities



Time Profile

Principles for Generation tariffs determination and Related Economic and Financial Model

of consultants Stakeholders’ consultations Complete the principles and

the Model Capacity Building of LEWA on

the Model

Implementation

procured Record of

consultations Board Approval

and adequate

yes

yes

yes

yes

5- Develop and implement Procurement of Power Guidelines.

Procurement and engagement of consultants

Stakeholders’ consultations Complete the guidelines Implementation

Record of consultations

Board Approval

Secured funding confirmed and adequate

yes

yes

yes

yes

yes

6. Develop and implement: Guidelines for the Sale of electricity by Landlords to tenants

Finalise resale consultation paper

Prepare TOR for the engagement of a consultant

Procure the services of the consultant

Monitor project implementation

Electricity Resale Guidelines

Data collection in ten districts.

yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 2 To ensure Security of Supply

Strategies

Activities



Time Profile


1- Determine Security of Supply options for electricity

Acquire and review generation master plan study report from DoE/LEC

Report acquired and reviewed

Final report available

yes

Continue participation in MEMWA’s efforts for determining supply options – e.g. Kobong pumped storage

Participation in meetings and comments on documents

MEMWA invitations yes yes yes yes yes

2- Implement security of supply options for electricity

Request transmission Licensee (LEC) to prepare system capacity statements

Transmission system capacity statements approved by the Authority

LEC cooperation yes yes yes yes yes

Request Transmission Licensee (LEC) to prepare interconnector capacity statement

Interconnector capacity statements approved by the Authority


Require LEC to meet Operating Security standard

Operating Security standard met


Implement Bulk Supply Costs Pass -Through Principle

Bulk Supply Costs Pass -Through Principle implemented

LEC report yes yes yes yes yes

3- Determine Security of Supply options for water

Participate in Ministerial meetings to establish and review long term water and sanitation strategies

Minutes of Meetings Consensus reached on recommended supply options

yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 2 To ensure Security of Supply

Strategies

Activities



Time Profile

Request and monitor the installations of the technological devices for WASCO’s operating efficiency

GIS Mapping and Hydraulic Models for all WASCO water supply networks

Professional staff and funds available in WASCO

yes yes yes

Acquire and approve WASCO leakage reduction program in all networks

WASCO leakage reduction program

Substantial reduction of leakage

Funds available for undertaking measures to reduce NRW

yes yes yes yes yes

Request and monitor production capacities and storages

Optimal Water storage Optimal production

capacity

Operational Manuals available

yes yes yes yes yes

Develop and publicize guidelines for efficient use of potable water

Guidelines

Customers’ buy-in yes yes yes yes

Acquire and approve the WASCO Master Plan for all water supply networks

WASCO Network Master Plans

Expertise and Funds available for production networks Master Plans.

yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 3 To develop and implement Regulatory Frameworks

Strategies

Activities



Time Profile


1.Review the Act Obtain submissions from relevant parties on areas that require amendment

Prepare a draft for consultation with Parliamentary Counsel

Submit draft to MEMWA for policy clearance

Submit final approved draft to Law Office for amendment by Parliament

Gap analysis report (year 1)

Concurrence from the Ministry on gaps to be addressed (year 1)

Draft amendments (year

2)

Process will move without hindrance through the legal and parliamentary system.

yes

yes

yes

2- Develop and review Subsidiary Legislation and Regulatory Tools for Water and Electricity

Procure consultants Undertake stakeholder

consultations

Develop Power producers

guidelines/rules/regulation

Consultant engaged

Stakeholders’

consultation reports

Power Producers

guidelines

Power Producers

Regulations/Rules

Implementation

secured funding adequate

yes

yes

yes yes

yes

yes

Procure consultants Undertake stakeholder

consultations

Develop licensing models for the power sector

Consultant engaged

Stakeholders’


Licensing Models

Secured funding adequate

yes

yes



Strategies

Activities



Time Profile


Procure consultants

Undertake stakeholder

consultations

Develop Power Purchase

Agreements

guidelines/rules/regulations

Consultant engage

Stakeholders’


PPA guidelines PPA – rules/regulations

Secured funding adequate

yes

yes

yes

Make an assessment of the existing Regulatory Framework and determine gaps

Inventory and assessment record of regulatory framework

Gaps will be identified and addressed

yes yes yes yes

Update and develop Regulatory instruments for Electricity

Proposed drafts of the revised or developed regulatory instruments

Revised or proposed instruments will facilitate the regulatory process

yes yes

Update and develop Regulatory instruments for Water

As above As above yes yes

Benchmark developed regulatory instruments against the best practice regulatory models

Refer to guidelines and prototype instruments and align accordingly

There will be enough body of evidence and instruments to benchmark against

yes yes yes yes yes

Consult and train the Licensees on the revised or proposed new regulatory instruments (Rules and Regulations) and guidelines

Record of consultative sessions and training of stakeholders

Stakeholders will give maximum support and participation

Yes yes yes yes yes



Strategies

Activities



Time Profile


Obtain Board approval and legislative clearance

Publishing

Board Approval Legal Notices Gazettes

Wide publicity will be given to the promulgation of new instruments

yes yes yes

3- Implement Regulatory Frameworks

Implementation Record of non-compliance

Licensees will cooperate

yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 4 To monitor Licensees Performance and Compliance

Strategies

Activities



Time Profile


1- Monitor Licensees Performance and Compliance

Carry out inspections Inspection Reports

Licensees’ cooperation

yes yes yes yes yes

Undertake compliance audit

Compliance Reports Licensees’ cooperation

yes yes yes yes yes

Carry out performance assessment Performance assessment reports

Licensees provides reports

yes yes yes yes yes

Identify key performance indicators (KPIs) for the electricity sector;

Develop Performance Assessment Tools (PATs) for electricity

Approved KPIs and PATs

Funding secured yes

Approve KPIs and PATs for water and sewerage services

Approved KPIs and PATs

Consultancy work completed on time

yes

Two Executive Management meetings annually with each Licensees

Meetings Compliance

Non-compliance issues

yes yes yes yes yes

One Board session with each Board of non-complaint licensees

Meetings Compliance

Non-compliance after management intervention

yes yes yes yes yes

2- Resolve Customer and Licensee complaints

Implement customer complaints rules and procedures

Number of complaints resolved within specified time-frames

Cooperation from affected parties

yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 5 To build and operate a sustainable organization

Strategies

Activities



Time Profile


1. Review and Implement: Board Governance processes Administrative policies, processes and procedures

Review Board Charter Review Terms of reference

for the Committees

Approved Board Charter

Approved Terms of reference for the Committees

The Board will facilitate the speedy conclusion of the process

yes yes

2. Review and Implement: Administrative policies, processes and procedures

Review, update and implement CGHB

Policy gap analysis report

Updated and approved CGHB

Develop new set of human resources and administration Policies and Procedures

Completion of review on time

yes

yes

yes

yes

yes

Review and update: HIV and AIDS Policy, and external communications strategy

Updated and approved

Funding and Consultancy secured to augment internal review

yes

Review and update Training and Development Policy


Funding and Consultancy secured to augment

yes



Strategies

Activities



Time Profile

internal review

Review and update: Performance Management system



yes

Review and update Remuneration Policy and Strategy



yes

Staff Costs to company survey

Survey and recommendations

Data received from Organizations to benchmark against

yes

yes

Formulate Team building sessions and activities (to move to review and implement policies)

Team building sessions programme and report

Staff will participate yes yes yes yes yes

Organize internal information sharing sessions to promote a culture of reading and learning.(same as above)

Program of information sharing sessions with presentation and activities

Staff will participate yes yes yes yes yes

Review ICT policy ICT Policy Funding available yes

Implement the Administrative policies, processes and procedures

Implementation of policies, processes and procedures

yes yes yes yes yes



Strategies

Activities



Time Profile

3- Develop and implement Integrated and statutory Reporting

Prepare Management Accounts

Management Accounts

Status of Funds Reports

yes yes yes yes yes

Prepare Annual Financial Statements

Draft Annual Statements

Audited financial statements

Timely auditing of financial statements by Auditor General’s office

yes yes yes yes yes

Prepare annual reports Annual report Same as above yes yes yes yes yes

Prepare Annual Business Plan

Annual Business Plan Data received from Licensees

Prepare Annual Budget Budget Data received from Licensees

yes yes yes yes yes

Prepare Activity Plans Activity Plans yes yes yes yes yes

Conduct management and staff meetings

Minutes yes yes yes yes yes

4. Develop and implement integrated information management system

Prepare TORs for donor financing

Secure funding Secure services of ICT

consultant

Funding secured

Integrated Information Management System

Budget allocation

adequate

yes yes

5. Sustain participatory peer review exercise -

Water and Sewerage services regulatory systems peer review

Peer Review Report LEWA part of the Review network

yes yes yes yes yes



Strategies

Activities



Time Profile

Electricity regulatory system peer review

Peer Review Report LEWA part of the Review network

yes yes yes yes

6- Construct LEWA House, Conduct a Feasibility Study to assess the economic benefits of ownership vs rental options for the office complex

Feasibility Study Report

Option chosen will be most favourable

Funding available

yes

Site Acquisition and procurement of Design services

Site allocated by LAA Approved conceptual

design and drawings

Positive results from feasibility study

Suitable site identified Design services completed

on time Funding

yes

Commence construction processes of LEWA house

Signed construction contract

Contractor on site Supervising consultant

progress certificates

Building LEWA house a viable option

Funding Competent contractor

appointed Work completed within

allocated time

yes

7. Acquire Testing facilities and equipment

Secure external testing facilities

Procure equipment and tools for compliance testing

Memorandum of Agreement

Fixed Asset Register updated

Funding available yes

8- Recruit staff

Water Quality Officer Position filled Funding available yes

Review the need for the Position filled Funding available yes



Strategies

Activities



Time Profile

position Procurement officer

yes

Compliance and risk officer Position filled Funding available yes

Water Inspector Position filled Funding available yes

9. Review organizational Structure

Procure consultants Organizational Structure Review Report

Funding available yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 6 To promote Stakeholder Awareness, Empowerment and Protection

Strategies

Activities



Time Profile


1- Develop and implement a communications programme

Design a communications program in line with the Communications strategy

A well structured Communications Programme

Implementation of the programme

stakeholder responses/ interaction to inform strategy execution

yes yes yes yes

yes

2- Determine the public awareness about LEWA and stakeholder information requirements

Conduct public awareness

survey about LEWA

Conduct stakeholder information requirements survey

Survey results Stakeholders will indicate their information requirements

yes

3- Collaborate with other Regulatory Bodies locally and in the region

Undertake information sharing initiatives

Reports Counterpart organizations will cooperate

yes yes yes yes yes

4- Ministerial Consultations

Chairperson’s meetings with Minister

Quarterly Meetings Agenda discussed Minister’s timely

decisions

Frequency of meetings maintained

yes yes yes yes yes

Chief Executive ’s meetings with Minister and Principal Secretary

Bi-monthly Meetings Agenda discussed Minister and/or PS ’s

timely decisions

Frequency of meetings maintained

yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 6 To promote Stakeholder Awareness, Empowerment and Protection

Strategies

Activities



Time Profile

5- Arrange and host 10 year LEWA anniversary celebrations

Prepare for 10 years LEWA anniversary branding of events/activities

Branded LEWA activities/events: 10

years electricity regulation

Funding secured yes

6-Publish and disseminate LEWA information

Produce newsletters and brochures

Newsletters Brochures

No publishers delays yes yes yes yes yes


LESOTHO ELECTRICITY AND WATER AUTHORITY (LEWA) - LOGICAL FRAMEWORK PLANNING CYCLE 2014/15 TO 2018/19 Strategic Objective 7 To increase access to electricity, water and sewerage services

Strategies

Activities



Time Profile


1- Manage UAF for electricity Collect UAF funds from Licensees and other sources

Collected funds

Timely transfer of levies by licensees

yes yes yes yes yes

Disburse funds for approved projects

Record of approved projects

Disbursement Records

Projects identified yes yes yes yes yes

2- Establish UAF for Water and sewerage services

Propose a mechanism for the establishment of the UAF for Water

Proposed mechanism approved by the Board and MEMWA

Concurrence from the Ministry

yes yes

Collect funds collected funds Timely transfer of funds by financiers and Licensees

yes yes

3- Determine options for increasing access to sewerage services

Undertake a study Report Board Approval Implementation

yes

yes

yes

yes


11.0 BALANCED SCORE CARD

The purpose of this section is to make an assessment of the risks attached to

each of the Strategic Objectives, indicating the level of effort that must be

applied to each of the Objectives.

11.1 Risk Profile

A

Strategic Objective

B

Impact of

Failure

C

Probability

of

occurrence

D

Risk

Profile

To determine Tariffs and Charges 3 3 9

To determine Security of Supply

Options

3 3 9

To develop and implement

Regulatory Frameworks

3 3 9

To monitor Licensees Performance

Compliance

2 3 6

To build and operate a sustainable

organization

3 3 9

To promote Stakeholder

Awareness, Empowerment and

Protection

2 3 6

To increase access to electricity,

water and sewerage services

3 3

9

Legend

HIGH = 3

MEDIUM = 2

LOW = 1

Impact of Failure - Would failure to meet the objective have a high

impact?

Probability of occurrence

- How urgent is it for the Strategic Objective to be

met?

Risk Profile - Column B x Column C


12.0 REPORTING

The reporting of progress on the implementation of the Strategic Plan to the Board

shall be done through the progress reports on the implementation of the resulting

Annual Business Plan.

Documents

STRATEGIC PLAN 2014/15 - 2018/19 JANUARY 2014