Zimbabwe-Zambia scramble to revive US$5bn power project

SAMANTHA MADE

More than three decades after the Batoka Gorge Hydropower Project was first proposed, the governments of Zimbabwe and Zambia are once again scrambling to revive the long-delayed multi-billion-dollar energy venture.

Through the Zambezi River Authority (ZRA), a joint venture output  owned by the governments of Zimbabwe and Zambia, the two countries are urgently courting investors to breathe life into the proposed US$5bn megaproject, which promises to transform the southern African countries’ energy landscape—if it can overcome the many hurdles that have persistently dogged it since its inception in 1992.

The ZRA, established in 1987 as a successor to the Central African Power Corporation (CAPCO) , is tasked with the operational management of the Zambezi River’s shared water resources and the Kariba Dam infrastructure. Its responsibilities include maintaining dam safety, monitoring river inflows, and implementing projects that benefit both nations.

The Batoka Gorge Hydropower Project, envisioned as a 2,400-megawatt facility to be constructed downstream of the iconic Victoria Falls, remains one of ZRA’s most ambitious undertakings to date.

The origins of the Batoka Gorge Hydropower Project date back to 1992 when feasibility studies first identified the Batoka site, situated roughly 54 kilometers downstream of Victoria Falls, as a prime location for hydroelectric development. The proposed dam and power plant were conceived to harness the immense potential of the Zambezi River, which flows between Zimbabwe and Zambia.

Back then, the project was touted as a major regional infrastructure initiative under the Southern African Development Community (SADC), expected to boost power generation capacity and reduce the chronic electricity shortages that plagued the region. However, the project quickly became entangled in geopolitical tensions, shifting economic priorities, environmental concerns, and a persistent lack of funding.

Initial feasibility studies were conducted by the World Bank, which gave a positive technical and economic assessment of the project in the early 1990s.

Yet, the momentum stalled due to strained relations between Zimbabwe and international financial institutions, the rise of environmental activism, and fiscal instability in both countries.

The project remained dormant for nearly two decades until 2012, when Zimbabwe and Zambia revived discussions around Batoka.

By 2014, the two governments had signed a memorandum of understanding to move forward with the project.

The African Development Bank (AfDB) stepped in to support further feasibility studies and environmental impact assessments, marking a renewed commitment to seeing the project through.

In 2019, the governments announced that they had awarded the engineering, procurement, and construction contract to a consortium led by General Electric (GE) of the United States and Power Construction Corporation of China. The two companies were expected to develop the project under a build-operate-transfer (BOT) arrangement, with funding to be sourced from international financiers.

But the project was once again thrown into uncertainty when the COVID-19 pandemic struck in 2020, causing widespread disruption to global investment flows.

That same year, concerns began to emerge over the transparency of the procurement process.

By 2023, Zambia formally withdrew from the GE and PowerChina contract, citing irregularities in the bidding process, further delaying progress.

Fast forward to 2025, and the ZRA is now redoubling efforts to attract new investors.

ZRA Chief Executive Officer Munyaradzi Munodawafa confirmed that a special project team had been assembled to lead the resource mobilization drive.

“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.

He said the resource mobilization campaign will span the next 12 to 18 months, depending on investor appetite, market conditions, and continued political support from both Zimbabwean and Zambian authorities.

Zambia and Zimbabwe have also set a September 2025 deadline to select new bidders, replacing the terminated 2019 deal.

Munodawafa noted that the upcoming round of proposals will be evaluated under stricter governance guidelines to avoid the procurement irregularities that plagued the previous bid.

Despite the renewed push, securing funding for Batoka remains a formidable challenge.

Both Zimbabwe and Zambia are currently grappling with debt distress, a factor that makes international lenders cautious.

Zimbabwe’s external debt stands at a staggering US$21bn, while Zambia is still finalizing a debt restructuring deal after defaulting on its Eurobond payments in 2020.

“These debt burdens complicate the ability of both governments to provide sovereign guarantees or meet co-financing requirements that many development finance institutions demand,” said an energy sector analyst,who preferred anonymity.

Additionally, Zimbabwe’s limited access to concessional financing—due to arrears with the World Bank and other international creditors—further dims prospects for swift financial closure.

Environmental groups have long criticised the Batoka Gorge project, warning that it could cause irreversible ecological damage to the Zambezi River ecosystem and threaten the tourism economy centered around Victoria Falls.

The proposed dam would flood parts of the gorge, potentially altering river flows and affecting biodiversity.

The project has also faced resistance from conservationists who argue that it poses a threat to one of the most celebrated natural wonders of the world.

Victoria Falls, a UNESCO World Heritage Site, draws thousands of tourists annually and generates substantial revenue for both Zimbabwe and Zambia.

Adding to the controversy, Zimbabwe and Zambia are now reviving a proposal to divert water from the Congo River to stabilize water levels in Lake Kariba—home to the region’s largest hydropower station, which has been severely affected by recurring droughts and low inflows.

While such a diversion could potentially stabilize hydropower generation, the plan faces daunting logistical and environmental challenges.

Chief among them are the massive energy requirements for pumping water uphill, complex terrain, and the potential diplomatic implications of tapping into Congo’s water resources without a regional consensus.

Planners are now considering alternative designs, including gravity-fed canals and tunnels, to minimize energy consumption.

Detailed technical, environmental, and economic feasibility studies are underway to assess the viability of the project.

Supporters of the Batoka Gorge Hydropower Project argue that the benefits far outweigh the challenges.

With the ability to produce 2,400MW of electricity, the project could help alleviate chronic power shortages that continue to hobble industrial growth and domestic consumption in both countries.

It could also generate employment, reduce dependence on thermal power, and position Zimbabwe and Zambia as exporters of clean energy within the Southern African Power Pool (SAPP).

According to projections, the Batoka project could lower the average cost of electricity and contribute to emissions reductions by replacing diesel-based power generation in the region.

“The region desperately needs this project,” said a senior official at SAPP, who also preferred not to be named.

“We are talking about a strategic energy investment that can bring long-term sustainability, provided it is done right.”

After more than 30 years of ambition, false starts, and financial and environmental roadblocks, the Batoka Gorge Hydropower Project remains one of Africa’s most emblematic yet elusive infrastructure dreams.

For Zimbabwe and Zambia, the stakes could not be higher.

As the world transitions to greener energy solutions and regional energy demand continues to rise, Batoka represents both an opportunity and a cautionary tale—an opportunity to transform southern Africa’s energy architecture and a reminder of the political, financial, and environmental intricacies that must be navigated in megaproject development.

Whether the project will finally move from paper to concrete remains uncertain.

But for now, Zimbabwe and Zambia are putting their best diplomatic and economic efforts forward—hoping that global investors will once again believe in the power of the Zambezi River.