Zimbabwe has agreed a $455 million, 15-year concession deal with the Africa-focused unit of India’s Jindal Steel for the refurbishment of a 920 megawatt coal-fired power plant, the energy minister said. The work on six ageing units at the Hwange thermal power station is expected to take four years, July Moyo said during a post-cabinet briefing late on Tuesday. Jindal Africa will recover its investment from revenue generated by electricity sales from the plant.
The Southern African nation currently only meets around half of its 2,000 MW electricity demand and experiences frequent, extended power cuts due to diminishing capacity at its ageing power plants. The 1,520 MW Hwange plant, the country’s largest, was upgraded in 2023 with the commissioning of two units, which added 600 MW. But its older units were built in the 1980s and are operating at a third of their capacity due to breakdowns. The Kariba hydropower station, built in the 1960s, completed a 300 MW upgrade in 2018, which boosted its capacity to 1,050 MW. However, its generation capacity has in recent years been affected by drought.
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Around the world, energy security and climate commitments are reshaping investment decisions. Coal-fired power stations still generate about 36 percent of global electricity as of 2023, according to the International Energy Agency, but they remain the single largest source of carbon emissions. At the same time, global electricity demand is set to rise by more than 3 percent annually through 2026, driven by industrialisation, electrification of transport, and digital expansion.
For countries like Zimbabwe, the challenge is stark: how to close the supply gap quickly enough to power economic growth while avoiding deeper entanglement in coal dependency that could undermine climate goals and investment inflows.
Zimbabwe’s current energy deficit is severe. The country generates only about 1,000 MW against peak demand that ranges between 1,800 and 2,200 MW, leading to daily load shedding that can stretch for hours. The World Bank estimates that these shortages cost Zimbabwe approximately 6.1 percent of GDP every year, with industries and households carrying the brunt of the economic damage.
Hwange at the Centre of Recovery
The Hwange power station has long been Zimbabwe’s mainstay. Its new 600 MW units, commissioned in 2023, offered some relief. However, the six older units, built more than four decades ago have been crippled by frequent breakdowns, reducing them to a fraction of their original output.
The Jindal Africa concession aims to restore 920 MW of dependable capacity over four years. For the government, this is a lifeline deal: if delivered on schedule, it could virtually double reliable electricity output and drastically reduce the rolling blackouts that have eroded business confidence and household resilience.
Zimbabwe’s hydropower backbone at Kariba has been undermined by recurring droughts. Though its 2018 upgrade boosted installed capacity to 1,050 MW, declining water levels in Lake Kariba have repeatedly forced authorities to ration generation. Climate variability, particularly stronger and more frequent El Niño cycles continues to erode the reliability of hydroelectricity in southern Africa.
The deal carries both opportunities and risks. On one hand, it promises a rapid reduction in load shedding, an improvement in industrial output, and a foundation for economic stability. Businesses in mining, agriculture, and manufacturing, Zimbabwe’s economic engines could finally operate without chronic interruptions.
On the other hand, heavy investment in coal poses environmental and financial risks. Coal plants are a leading source of local air pollution and greenhouse gases. Without modern emissions controls, the health costs to communities near Hwange could rise sharply. Moreover, as global finance pivots away from fossil fuels, Zimbabwe risks being left behind in the transition, with refurbished coal plants potentially becoming stranded assets within a decade.
Placing Zimbabwe in the Global Energy Conversation
Internationally, pressure is mounting to cut coal reliance. The IEA stresses that emissions from existing coal plants must fall by about 10 percent every year through 2030 to align with the Paris Agreement’s 1.5°C target. Countries like South Africa, heavily coal-dependent, are experimenting with transition finance, while others in the region are accelerating solar and wind investments.
Zimbabwe’s decision to refurbish Hwange signals pragmatism, a recognition of its immediate need for energy security. Yet, without parallel investments in solar, wind, and storage, the country could entrench its vulnerability to global decarbonisation trends.
Zimbabwe’s $455 million power plant refurbishment deal is both a promise and a gamble. It promises a brighter near-term future with fewer blackouts, stronger industries, and improved investor confidence. But it also carries the risk of deepening coal dependence at a time when the world is moving away from it.
The challenge for Zimbabwe is clear: to use Hwange’s revival not as a destination, but as a bridge. A bridge towards a diversified energy mix that harnesses abundant solar potential, improves energy storage, and builds resilience against climate uncertainty. Only then can this deal be remembered not merely as a return to coal, but as a stepping stone to a sustainable energy future.
