News / Local
Zimbabwe-Zambia scramble to revive US$5bn power project
29 May 2025 at 13:22hrs | Views
More than three decades after it was first proposed, the Batoka Gorge Hydropower Project is back in the spotlight as Zimbabwe and Zambia renew efforts to revive the long-stalled US$5 billion energy venture. The project, which dates back to 1992, promises to reshape the power landscape of southern Africa, but only if it can overcome persistent financial, environmental, and governance challenges.
The governments of Zimbabwe and Zambia, through their joint entity - the Zambezi River Authority (ZRA) - are now aggressively courting new investors to bring the long-delayed 2,400-megawatt facility to life. ZRA CEO Munyaradzi Munodawafa confirmed that a dedicated project team has been assembled to lead a resource mobilization drive, expected to run for the next 12 to 18 months depending on market appetite and political support.
"The ZRA has formed a team that will court investors in the proposed 2,400-megawatt facility. This facility will be located near the World Heritage Site, Victoria Falls," Munodawafa said, emphasizing that the project remains a key priority for both nations.
Originally identified as a prime location for hydroelectric development in the early 1990s, the Batoka Gorge site lies 54 kilometers downstream of Victoria Falls. Initial feasibility studies were conducted by the World Bank, which gave the project a positive technical and economic outlook. However, the momentum quickly faded due to diplomatic tensions, economic instability, and growing environmental concerns.
Despite a memorandum of understanding signed in 2014 and renewed support from the African Development Bank, the project stalled again in 2020 when the COVID-19 pandemic disrupted global financing. Additional complications arose that same year over transparency issues in the procurement process. By 2023, Zambia formally exited a contract with a consortium led by General Electric and Power Construction Corporation of China, citing irregularities in the bidding.
Now, with a renewed sense of urgency, Zimbabwe and Zambia have set a deadline of September 2025 to select new bidders under stricter governance guidelines. The hope is to prevent the mistakes of the past and restore investor confidence.
Still, the path forward is uncertain. Both Zimbabwe and Zambia are facing high levels of sovereign debt, complicating their ability to offer financial guarantees or meet co-financing terms required by development finance institutions. Zimbabwe's external debt stands at an estimated US$21 billion, while Zambia is still emerging from a debt restructuring process following its 2020 Eurobond default.
"These debt burdens complicate the ability of both governments to provide sovereign guarantees or meet co-financing requirements," said an energy sector analyst who requested anonymity. "Financiers are understandably cautious."
Environmental concerns continue to cast a shadow over the Batoka project. Conservation groups argue that damming the Zambezi River could inflict irreversible damage on its ecosystem and threaten the tourism economy built around Victoria Falls. The site, a UNESCO World Heritage treasure, draws thousands of visitors each year and is a vital revenue stream for both countries. Critics warn that flooding parts of the gorge could affect biodiversity, alter river flows, and diminish the visual and natural integrity of the Falls.
Amid these concerns, Zimbabwe and Zambia are also reconsidering a controversial proposal to divert water from the Congo River to stabilize water levels in Lake Kariba, where low inflows have severely impacted hydroelectric output. While such a diversion could support regional energy stability, it faces enormous logistical hurdles, including the technical complexity of pumping water uphill, massive energy costs, and the need for regional diplomatic consensus.
Alternative solutions such as gravity-fed canals and tunnels are currently being explored, with detailed feasibility studies underway.
Supporters of Batoka argue that the potential rewards outweigh the risks. If realized, the project could significantly reduce electricity shortages that have long hampered economic growth in both countries. It could also lower the region's carbon footprint by displacing diesel-powered generators and provide a stable electricity source for the Southern African Power Pool.
"The region desperately needs this project," said a senior official from the Power Pool. "It's a strategic energy investment that, if executed responsibly, could deliver long-term sustainability."
After more than 30 years of delays, the Batoka Gorge Hydropower Project remains a symbol of both promise and complexity. As global pressure mounts to transition to clean energy and demand in the region intensifies, Zimbabwe and Zambia are once again placing their bets on the Zambezi River. Whether those bets pay off depends on their ability to balance financial prudence, environmental stewardship, and regional diplomacy.
The governments of Zimbabwe and Zambia, through their joint entity - the Zambezi River Authority (ZRA) - are now aggressively courting new investors to bring the long-delayed 2,400-megawatt facility to life. ZRA CEO Munyaradzi Munodawafa confirmed that a dedicated project team has been assembled to lead a resource mobilization drive, expected to run for the next 12 to 18 months depending on market appetite and political support.
"The ZRA has formed a team that will court investors in the proposed 2,400-megawatt facility. This facility will be located near the World Heritage Site, Victoria Falls," Munodawafa said, emphasizing that the project remains a key priority for both nations.
Originally identified as a prime location for hydroelectric development in the early 1990s, the Batoka Gorge site lies 54 kilometers downstream of Victoria Falls. Initial feasibility studies were conducted by the World Bank, which gave the project a positive technical and economic outlook. However, the momentum quickly faded due to diplomatic tensions, economic instability, and growing environmental concerns.
Despite a memorandum of understanding signed in 2014 and renewed support from the African Development Bank, the project stalled again in 2020 when the COVID-19 pandemic disrupted global financing. Additional complications arose that same year over transparency issues in the procurement process. By 2023, Zambia formally exited a contract with a consortium led by General Electric and Power Construction Corporation of China, citing irregularities in the bidding.
Now, with a renewed sense of urgency, Zimbabwe and Zambia have set a deadline of September 2025 to select new bidders under stricter governance guidelines. The hope is to prevent the mistakes of the past and restore investor confidence.
Still, the path forward is uncertain. Both Zimbabwe and Zambia are facing high levels of sovereign debt, complicating their ability to offer financial guarantees or meet co-financing terms required by development finance institutions. Zimbabwe's external debt stands at an estimated US$21 billion, while Zambia is still emerging from a debt restructuring process following its 2020 Eurobond default.
"These debt burdens complicate the ability of both governments to provide sovereign guarantees or meet co-financing requirements," said an energy sector analyst who requested anonymity. "Financiers are understandably cautious."
Environmental concerns continue to cast a shadow over the Batoka project. Conservation groups argue that damming the Zambezi River could inflict irreversible damage on its ecosystem and threaten the tourism economy built around Victoria Falls. The site, a UNESCO World Heritage treasure, draws thousands of visitors each year and is a vital revenue stream for both countries. Critics warn that flooding parts of the gorge could affect biodiversity, alter river flows, and diminish the visual and natural integrity of the Falls.
Amid these concerns, Zimbabwe and Zambia are also reconsidering a controversial proposal to divert water from the Congo River to stabilize water levels in Lake Kariba, where low inflows have severely impacted hydroelectric output. While such a diversion could support regional energy stability, it faces enormous logistical hurdles, including the technical complexity of pumping water uphill, massive energy costs, and the need for regional diplomatic consensus.
Alternative solutions such as gravity-fed canals and tunnels are currently being explored, with detailed feasibility studies underway.
Supporters of Batoka argue that the potential rewards outweigh the risks. If realized, the project could significantly reduce electricity shortages that have long hampered economic growth in both countries. It could also lower the region's carbon footprint by displacing diesel-powered generators and provide a stable electricity source for the Southern African Power Pool.
"The region desperately needs this project," said a senior official from the Power Pool. "It's a strategic energy investment that, if executed responsibly, could deliver long-term sustainability."
After more than 30 years of delays, the Batoka Gorge Hydropower Project remains a symbol of both promise and complexity. As global pressure mounts to transition to clean energy and demand in the region intensifies, Zimbabwe and Zambia are once again placing their bets on the Zambezi River. Whether those bets pay off depends on their ability to balance financial prudence, environmental stewardship, and regional diplomacy.
Source - Business Times
