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GE and China Power to build $4bn hydropower plant on Zimbabwe, Zambia border

Zimbabwe and Zambia Batoka Gorge plant to be built by GE and Power Construction Corp. of China

Zimbabwe and Zambia have chosen General Electric Co. and Power Construction Corp. of China to build a $4bn hydropower project along their border, Zimbabwean President Emmerson Mnangagwa said.

Bloomberg reports that the 2,400-megawatt Batoka Gorge plant has been planned for years by the two southern African nations, both of which are struggling with electricity shortages after a drought curbed hydropower output. General Electric and Power China are in a consortium that was shortlisted in February to build the facility.

“Zambia and Zimbabwe have agreed on this project. We have all agreed that we give it to China Power and GE together,” Mnangagwa said in an interview in Maputo, Mozambique’s capital, where he attended the US-Africa Business Summit. “It’s critical that we move fast on that front because it’s necessary that as we industrialise that we need electricity.”

While the project will address electricity shortages, it’s on the same river (the Zambezi) that has left the downstream Kariba hydropower dam at less than 30% storage capacity and producing less than half its intended electricity. The Zambezi’s water flows in 2019 are near the lowest in half a century, and even worse than during the last severe drought in 2014-15.

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Batoka Gorge will have a significantly smaller storage capacity than Kariba (the world’s biggest man-made freshwater reservoir); droughts could pose greater risks to the planned project.

A formal contract is yet to be signed. GE said that the Zambezi River Authority, which manages power plants on the river, has pledged to appoint a final developer for the project by September. As part of the consortium, GE would have a “material role in the development and execution of the project,” including the design and supply of hydropower technologies, it said.

The project will be based on a build-operate-transfer financing model and won’t put any fiscal strain on the two nations’ governments.

The $4bn cost of the project includes amounts for civil works, construction and power turbines, among other things, said GE. The contract would be split among the companies in the consortium. The African Development Bank said in September it has begun mobilising funds for the plant.

Other bidders that had been shortlisted included Salini Impregilo SpA of Italy and a joint venture comprising China Three Gorges Corp., China International Water & Electric Corp. and China Gezhouba Group Co.

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