Zambia and Zimbabwe have agreed to revive the long-delayed Batoka Gorge hydropower project, a $4.2bn cross-border energy scheme intended to ease chronic electricity shortages in both countries, according to Bloomberg.
The project, which would be jointly owned and developed through the Zambezi River Authority (ZRA), is planned on the Zambezi River downstream of Victoria Falls. Once completed, Batoka Gorge is expected to generate up to 2,400 megawatts of electricity, split evenly between the two neighbours.
Bloomberg reports that both governments are now prepared to contribute funding toward the project’s development phase, a move aimed at restoring investor confidence after years of delays and failed procurement attempts.
Power shortages sharpen urgency
The renewed momentum comes as Zambia and Zimbabwe grapple with worsening power deficits caused by prolonged drought and overreliance on hydropower. Reduced water levels at the Kariba Dam — another shared Zambezi asset — have slashed electricity output, triggering extended load-shedding across both countries.
Mining operations in Zambia, particularly copper producers, have been hit by intermittent power supply, while Zimbabwe’s manufacturing sector and urban households continue to face daily outages. Officials in both capitals increasingly see Batoka Gorge as critical infrastructure rather than an optional long-term investment.
According to Bloomberg, policymakers believe expanding generation capacity is essential to stabilising their economies and supporting industrial growth.
New financial structuring underway
The ZRA has appointed a financial adviser to restructure the project and guide its relaunch. The adviser is expected to support financial modelling, prepare tender documentation and engage potential developers and lenders, including development finance institutions.
Previous efforts to advance Batoka Gorge collapsed in 2020 after Zambia withdrew from a contract awarded to a consortium led by General Electric and Power Construction Corporation of China, citing procurement and financing concerns. That decision effectively froze the project for several years.
Authorities are now pursuing a revised approach that emphasises competitive bidding and blended financing, combining public funding with private capital.
Economic constraints complicate delivery
The revival effort comes amid difficult economic conditions. Zambia is still working through a debt restructuring process following its sovereign default, while Zimbabwe faces persistent currency instability and limited access to external financing.
Despite these constraints, both governments argue that power investment is unavoidable. Electricity shortages have constrained growth, undermined investor confidence and increased reliance on costly emergency power imports.
Bloomberg notes that officials hope early financial commitments from both states will help unlock broader funding and demonstrate political commitment to delivering the project.
Regional implications
While a final investment decision has yet to be announced, preparatory work is expected to accelerate through 2026, with a formal bidding process anticipated once financial arrangements are finalised.
If realised, Batoka Gorge would rank among Southern Africa’s largest renewable energy projects and strengthen regional power integration through the Southern African Power Pool. For Zambia and Zimbabwe, the dam represents both a response to immediate power shortages and a long-term bet on energy-led economic recovery.
