The “Biggest Trout Farm in Africa” and the Failed R5,000 Community Fund

The Katse Dam in the Lesotho Highlands, is where SanLei Trout has its farm.

• A company which claims to be the biggest trout farm in Africa contributed only R5,000 to the community fund in the Katse Dam catchment area in the Lesotho Highlands.
• In order to apply for a licence from the Lesotho Highlands Development Authority, SanLei Premium Trout had to show how local communities would benefit.
• But the Catchment Resilience Fund initiative seems to have crumbled after less than a year.
• Local farmers say the dam has changed conditions for the worse.

SanLei Premium Trout, which farms trout on Katse Dam in the Lesotho mountains, claims to have invested in projects to help the communities near the dam, whose livelihood is affected by overgrazing, soil erosion and changing weather. But the company, which describes itself as “the biggest trout farming operation in Africa”, only contributed 5,000 Maloti (R5,000) to the Catchment Resilience Fund (CaRe Fund) in 2018 and the money was never used for environmental projects.

SanLei is owned by South Africa-based Mergence Asset Managers, through its Lesotho Private Equity Fund. The main investor in the Lesotho Private Equity Fund is Lesotho’s Public Officers’ Defined Contribution Pension Fund.

SanLei CEO Dewald Fourie was quoted in November last year as saying that the firm’s current trout production was 1,000 tons a year and this was expected to double by 2030.

The construction of the dams, built to supply water to South Africa, has had major effects on local populations. Some farmers have been compensated for the loss of their land as a result of the dams. But others are battling soil erosion, overgrazing, the loss of plants, sand and firewood.

In its 2023 impact report, Mergence says the CaRe fund was set up to incentivise Khokhoba farmers to improve the management of the rangeland in the dam catchment area, which had been degraded.

“The partnership committee provides annual workplans, activity targets, and quarterly reports to SanLei, reflecting its financial, management, and monitoring records. The CaRe Fund money is used by the Khokhoba community to implement projects benefiting the community as a whole and supporting individual households. These benefits serve as meaningful incentives for the community to actively contribute to the catchment management activities under the CaRe Fund.”

Part of the project was to restrict grazing in parts of the catchment area to prevent further soil erosion. Villagers were to be trained on how to preserve the grasslands, and rocks were to be painted white to indicate “no-go” areas for grazing.

But according to ‘Malieketso Ramokoatsi, a member of the Khokhoba village committee, the CaRe funds were instead used to provide small loans to community members and build an office for the village chief. He said that the fund had collapsed despite its potential to benefit the village.

“Even the equipment for rangeland and wetland management was vandalised, and members were discouraged from continuing,” she said.

SanLei compliance and environmental officer Relebohile Ntoi told GroundUp that the company had contributed M60,000 (R60,000) to the project. “The consultant got M50,000 for the training sessions, and the community got M10,000.” She said the rangeland management project was mainly a USAID initiative.

“They only needed somebody to partner with who knows about these communities and could put up an incentive for the communities to do the project,” she said.

Ntoi later acknowledged that only M5,000, not M10,000, had been paid to the community.

Ramokoatsi said what work had been done on climate change mitigation had been financed by USAID, not SanLei.

USAID funded the Lesotho Climate Change Adaptation Project, using Pietermaritzburg-based Institute of Natural Resources as consultants. But USAID withdrew in 2018 and the project came to an end.

“The Americans just disappeared, and the project collapsed,” said village chief Molapo Khethisa.

Ntoi told GroundUp that the Lesotho Highlands Development Authority had proposed that SanLei “go back and revive the fund”. “But for now we haven’t really made plans to do it,” she said.

The Lesotho Highlands Development Authority (LHDA) regulates activities in the dam catchment area. In terms of the law, applicants for a fishing licence on the dam have to “specify in detail how local communities surrounding the proposed aquaculture operations will stand to benefit”.

GroundUp sent questions to the LHDA on 26 February asking whether SanLei’’s contribution to the Khokhoba CaRe fund was part of its obligations as a requirement for the licence, and the role of the LHDA in holding the company accountable. Spokesperson Mpho Brown has yet to respond to these questions.

We also sent questions to Fourie, on 21 February, asking about SanLei’s contribution to the CaRe fund and the role played by USAID. He promised to respond but did not. On 12 March he said he had forwarded our questions to SanLei’s board.

Khokhoba resident ‘Mamolapo Khethisa said the dam had changed conditions in the area. She said more frequent hailstorms swept away nutrient-rich soil into the dam and left behind stones and depleted particles. “These storms have become more frequent since the construction of the dam, resulting in the loss of crops and soil,” she told GroundUp.

She also noted that frost now arrives as early as March instead of mid-April, destroying crops such as maize, sorghum and beans before they ripen or preventing them from bearing fruit, aggravating hunger in the community.

‘Mamolapo Khethisa says the dam has changed farming conditions in the area.

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