Place peppers on greased grill over medium-high heat; frill, turning frequently, for about 20 minutes or until charred on all sided. Let cool enough to handle; peel, core and seed.
3.
In food processor, puree peppers until smooth. Add basil, oil and cheese; puree until well blended. Stir in garlic, and salt and pepper to taste. (Pesto can be refrigerated for up to 2 days; thin with more olive oil if necessary.)
4.
Place lamb on greased grill over medium-high heat; grill for 5 to 7 minutes per side for medium-rare or until desired doneness. Serve with red pepper pesto.
