• Zambia and Zimbabwe will each contribute $220M to shore up the bankability of the $4.2B Batoka Gorge hydropower project
• The 2,400 MW plant would provide 1,200 MW to each country, with implications for regional energy security and climate resilience
• Revival efforts follow contract disputes, multi-year delays, pandemic disruptions, and severe drought impacts linked to El Niño and climate change
Zambia and Zimbabwe are injecting a combined $440M to revive the Batoka Gorge hydropower project after years of stalled negotiations, financing delays, and contract disputes. The contribution is intended to strengthen the project’s bankability and attract private capital for a 2,400 MW plant on the Zambezi River basin adjacent to Victoria Falls.
The decision follows a late-2025 meeting of the Council of Ministers of the Zambezi River Authority (ZRA), the binational institution managing joint hydroelectric assets spanning both countries. Each government will mobilize $220M. The full project is estimated at $4.2B, according to information reported by regional media.
A High-Capacity Hydropower Project in a Changing Climate
If built, Batoka Gorge would supply 1,200 MW to Zambia and 1,200 MW to Zimbabwe, reinforcing two stressed national grids that have been grappling with drought-driven load shedding. In severe cases, cuts have exceeded 12 hours per day. Climate variability and repeated El Niño events have constrained output from Kariba, the dominant hydropower asset in the region.
The original Batoka construction timeline targeted a 2020 start. The pandemic disrupted procurement and financing processes, while controversy over the initial award to General Electric and Power Construction Corp. of China compounded delays. Zambia later withdrew from the procurement process in June 2023, citing transparency concerns.
A senior official briefed on the withdrawal said the decision was taken because “the terms of the initial award could not be justified given the lack of clarity around process and accountability.” The episode prompted both countries to reset the development approach.
New Investors and Revised Feasibility Work
By early 2025, Zambia and Zimbabwe authorized the ZRA to source new investors for the plant and renewed technical assessments. Updated engineering, feasibility, and environmental impact studies are ongoing. The sequencing reflects a broader attempt to align project design with climate risk, water availability, and capital requirements.
Officials close to the process say the new financial structure is intended to reduce perceived sovereign and construction risk. One source familiar with the ministerial deliberations said “the contribution from both governments is intended to demonstrate seriousness to commercial partners and multilaterals.”
Private capital will be decisive for delivery, given that the $440M public contribution covers only a fraction of the estimated $4.2B cost. A mix of concessional finance, export credit support, and independent power producer participation is under discussion, according to regional reporting.
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Governance and Regional Energy Security Stakes
The ZRA’s governance role is central. As a binational authority, it must reconcile allocation, pricing, water management, and long-term operational responsibility. It also must navigate hydrological uncertainty. Lower Zambezi water levels have become a strategic concern for both countries, with energy planners increasingly modeling drought risk.
For C-suite energy leaders and investors, Batoka’s revival intersects with the evolving narrative of climate resilience in African power markets. Hydropower remains a critical baseload option, yet long-duration droughts introduce uncertainty that pushes financiers toward blended capital structures and risk-sharing frameworks. The regional power pool also amplifies the strategic relevance of new capacity in Southern Africa, where deficits constrain industrial output and economic growth.
Zambian and Zimbabwean officials argue that Batoka is essential for long-term energy security. A Zimbabwean energy representative said “the region cannot ignore the implications of climate on legacy assets like Kariba, which makes diversification and new hydropower essential.” The sentiment reflects an emerging policy consensus that dispatchable renewable capacity will remain integral to national grids, even as solar and wind accelerate.
Regional Relevance Beyond the Zambezi
Batoka’s outcome will be closely watched across African infrastructure and climate-finance circles. If the revised structure succeeds in attracting private investors, it may serve as a template for hydropower development in climate-stressed basins. If not, the region’s energy gap could widen, with knock-on effects for manufacturing, mining, and foreign investment.
Globally, multilateral lenders and blended-finance institutions are looking for de-risked, climate-aligned projects in emerging markets. Batoka’s revival positions Zambia and Zimbabwe within that conversation. The coming year will test whether public capital commitments and governance reforms are enough to turn plans into construction.
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