The LHWP is a binational project established as the result of a treaty between Lesotho and South Africa, signed in October 1986, on a shared benefits basis. According to the Treaty, the purpose of the Project can be outlined as follows:
- To transfer high quality water from Lesotho to South Africa
- To generate hydropower for Lesotho
- To carry out ancillary development in Lesotho
Water from the Project is drawn from the headwaters of the Senqu (also known as the Orange River in South Africa) in Lesotho and delivered to the Vaal Dam. Rand Water then draws water for purification from the Vaal Dam and transports it via canals and pipelines to their two purification stations, where it is cleaned and treated to a standard suitable for humans to drink.
Rand Water sells water to local authorities and some mines and factories. Local authorities then supply households, schools and businesses in Gauteng and parts of Mpumalanga, North West, Free State and Limpopo Provinces with clean water purchased from Rand Water.