The Mega US$5 Billion Batoka Hydropower Construction Contract to be Retendered

In a recent turn of events, the Batoka Hydropower construction contract will be retendered and new bidders selected. The Zambian and Zimbabwean governments are retendering the US$5 billion hydropower plant contract after having previously awarded it. The construction contract had been awarded to General Electric and Power Construction Corp of China earlier. The officials involved are expected to select new bidders by the end of September, next year. The Zambezi River Authority, a joint venture of the two countries that maintains the Kariba Dam complex is mandated with the selection. They expect to receive official bids from potential developers by April 2025 and select bidders five months after that. Work on the 2400-megawatt Batoka Hydropower project had been slated to commence in 2020 but faced numerous challenges and delays. These included challenges such as the coronavirus pandemic and difficulties in securing funding.

The Reason for the Retendering of the Batoka Hydro-power Construction Contract

Zambian Energy Minister Peter Kapala said the nation would exit the 2019 contract with GE and Power China in June. This is because proper procurement methods had not been followed when the tender was awarded. Also, Zambia is in a state of national disaster because of the drought that faces the southern African region. The drought, blamed on the El-Nino weather phenomenon, has contributed to the rising cost of food in the region. Based on these aspects, it is not feasible that construction of the project will start soon. The new timeline of the project had been slated for the first quarter of 2025, which unfortunately has been pushed further. It was expected that the contracted company would start construction as soon as optimization studies that are currently underway had been completed.

The Significance of the Hydropower Project

“The construction of water buffers and reservoirs is of paramount need, as seen with the current situation in the regions,” stated the Zambezi River Authority (ZRA) chief, Munyaradzi Munodawafa. “The Batoka hydropower project scheme will facilitate reservoir regulation for power generation and flood management,” he said. “ This means that generation will be increased at Batoka during the peak seasons while water will be banked at Kariba Dam during the dry season for use.” The Kariba dam water level is expected to keep receding as insight by the ZRA chief, but it is unlikely it will be decommissioned. The chief said that the receding water levels are being witnessed due to the poor rainfall levels. The dam is the one that straddles Zambia and Zimbabwe, and its low water levels are proving to be a challenge already.

The State of the Regions Regarding the Project

ZRA has allocated 8 million cubic meters of water to Zambian power utility Zesco, and its Zimbabwean Power Co. Counterpart. This translates to 214 megawatts for the two electricity companies until the end of the year. The project will serve as a mitigation measure for some hydrological problems at Kariba. It is also expected to contribute a significant increase to the desperately needed power supply in both Zambia and Zimbabwe. The Batoka Hydropower dam is expected to produce up to 2.4 gigawatts (GW) once its construction is completed. Various stakeholders involved in the project such as UNESCO are anxiously anticipating for the project to commence as soon as possible. The retendering of the Batoka Hydropower construction contract will delay its commencement.