The Kingdom of Lesotho has signed a binding agreement with U.S.-based developer Convalt Energy for a $6.2 billion hydropower and AI data center project centered on the planned 1,200 MW Kobong pumped storage facility in Mokhotlong District. The agreement is one of the largest private-sector investment commitments ever announced in Lesotho.
Kobong hydropower and data center project is intended to serve both regional and international markets. Additionally, the agreement between Convalt and Lesotho’s Department of Energy forms part of a broader effort by the country to make use of its abundant water resources and strategic location in Southern Africa.
The project also comes as global demand for AI computing infrastructure continues to increase. Data center developers are increasingly seeking locations with access to reliable low-carbon electricity. Meanwhile, governments across Africa are pursuing opportunities to attract digital infrastructure investments that can support economic diversification and technological development. Recent hyperscale projects announced elsewhere in Africa have similarly paired large-scale energy developments with AI and cloud-computing infrastructure.
Kobong Hydropower and AI Data Center Project: A Strategic Investment for Lesotho
Lesotho has long been recognized for its significant hydropower potential through the Lesotho Highlands Water Project. The new investment seeks to expand that advantage by coupling renewable energy generation with energy-intensive AI computing data center facilities.
This integrated approach is particularly notable because power availability has emerged as one of the biggest constraints on hyperscale data center development worldwide. Across Africa and other regions, several proposed digital infrastructure projects have faced delays or restructuring due to electricity supply limitations. By developing dedicated renewable generation alongside the data center, the Lesotho project aims to mitigate those risks while creating a vertically integrated energy-and-digital ecosystem.
For Lesotho, the project also aligns with broader plans to increase industrial investment. This is alongside creating high-skilled jobs, expanding export revenues and strengthening the country’s role in regional energy markets.
Project Finance
The total investment value announced for the development stands at approximately $6.2 billion. The agreement signed between the parties is described as a binding Memorandum of Agreement, establishing the framework for project development and subsequent implementation phases.
The investment package is expected to cover:
- Hydropower generation facilities
- Energy storage infrastructure
- Transmission and grid upgrades
- AI data center infrastructure
- Associated digital connectivity infrastructure
- Supporting civil and utility works
Detailed financing structures, project timelines, procurement packages and contractor appointments have not yet been publicly disclosed.
Outlook on the Kobong Hydropower and AI Data Center Project in Lesotho
The next stages for the Lesotho hydropower and data center project are expected to include feasibility studies, environmental and social assessments, engineering design work, financing arrangements and the procurement of delivery partners.
If implemented as proposed, the project would rank among the largest combined renewable-energy and digital-infrastructure developments in Africa. It would also place Lesotho among a growing group of countries seeking to use abundant renewable energy resources as a competitive advantage in attracting AI and cloud-computing investment.
Expected Challenges
The project faces several challenges common to large-scale energy and digital infrastructure developments. These include:
- Securing the full financing package
- Hydrological and environmental permitting requirements
- Transmission and grid integration needs
Power availability also remains a critical success factor for hyperscale AI facilities globally. This makes the integration of dedicated hydropower generation a potentially significant advantage for the project.
Kobong Hydropower and AI Data Center Project Fact Sheet
Location: Kobong River Basin, Mokhotlong District
Investment Value: US$6.2 billion (M98 billion)
Developer: Convalt Energy
Government Partner: Lesotho Department of Energy
Project Components: Hydropower generation, energy storage, transmission infrastructure, AI data center
Power Capacity: 1,200 MW
Current Stage: Development and planning phase
Status: Binding Memorandum of Agreement signed June 2026
Primary Objective: Development of clean-energy-powered AI data center infrastructure
Expected Impact: Energy expansion, digital infrastructure growth, job creation, regional technology hub development
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