The Lesotho Highlands Water Project involved the construction of five dams and over 200 km (124 miles) of tunnels. These dams supplied power for Lesotho and water to the Republic of South Africa. The project was supported by the World Bank in partnership with Impregilo, an Italian company accused of corruption in 2004. At the start of the project, 3,000 hectares of arable land and 1,000 hectares of pasture land were flooded. Local communities did not receive economic compensation and the project worsened their already precarious living conditions.
The World Bank has declared Lahmeyer International, a German company, ineligible to be awarded Bank-financed contracts for a period of seven years, because of corrupt activities in connection with the Lesotho Highlands Water Project (LHWP). The World Banks Sanctions Committee found Lahmeyer engaged in corrupt activities by bribing the Lesotho Highlands Development Authoritys Chief Executive, Mr. Masupha Sole, the government official responsible for contract award and implementation. In 2015, Khabang Lejone Multipurpose Cooperative sued Lesotho Highlands Development Authority (LHDA) in order to force the authority to pay compensation to the affected and displaced populations from the phase I of the project.