Zimbabwe has signed a US$455 million concession agreement with a unit of India’s Jindal Steel group to rehabilitate aging units at the Hwange thermal power station, a move authorities say could add up to 400 megawatts (MW) to the national grid and ease chronic electricity shortages.
The deal, announced on Monday, grants a 15-year concession to Jindal Africa to upgrade several older generating units at Hwange, Zimbabwe’s largest power plant. Work is expected to begin in the first quarter of 2026 and run for about four years, according to government officials.
Hwange, located in western Zimbabwe near the coal-rich Hwange district, has an installed capacity of around 1,520 MW, but actual output has long fallen short because of aging equipment, frequent breakdowns and persistent funding constraints. Several units are currently operating below capacity or remain idle.
Energy authorities say the rehabilitation project will restore part of this lost capacity, potentially adding up to 400 MW, equivalent to about one-fifth of current national electricity demand.
Zimbabwe has struggled with power shortages for years. Official figures show available generation capacity fluctuating between 1,200 MW and 1,600 MW, far below peak demand of more than 2,000 MW. The gap has resulted in widespread load shedding, with households and businesses often enduring power cuts lasting up to 18 hours a day.
The shortages have taken a heavy toll on the economy, particularly mining, manufacturing and agriculture sectors heavily dependent on reliable electricity. According to the World Bank, electricity constraints cost Zimbabwe an estimated 6.1 percent of GDP in 2022, underscoring the scale of the problem.
To plug the deficit, Zimbabwe relies heavily on imports through regional power pools. The country currently imports about 300 MW from South Africa and roughly 50 MW from Mozambique, exposing it to supply disruptions and price volatility when neighbouring countries face their own generation shortfalls.
The Hwange upgrade is part of a broader push by the government to stabilise electricity supply and reduce dependence on imports. Officials say rehabilitating existing thermal assets is more cost-effective in the short term than building new plants from scratch, particularly given Zimbabwe’s abundant coal reserves.
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Under the concession agreement, Jindal Africa will finance, rehabilitate and operate the upgraded units, recovering its investment through power sales over the life of the contract. Authorities have not disclosed the tariff structure but say it will be regulated to protect consumers.
The government has in recent years turned to private investors to help revive critical infrastructure amid fiscal constraints and limited access to international financing. Zimbabwe has been largely shut out of concessional lending because of arrears to multilateral lenders and a long-running debt dispute.
Hwange remains central to the country’s energy strategy. Commissioned in stages from the 1980s, the coal-fired plant has suffered decades of underinvestment. While two newer units added in 2023 boosted nominal capacity, older units have continued to drag down overall performance.
Beyond Hwange, Zimbabwe has also sought to expand generation through renewable energy projects, particularly solar, though progress has been slow. Despite abundant sunshine, solar still accounts for a small share of installed capacity, with coal and hydropower dominating the energy mix.
Access to electricity has improved modestly in recent years. The World Bank estimates that 62 percent of Zimbabweans had access to electricity in 2022, up from previous years, but reliability remains a major concern.
Analysts caution that while the Hwange rehabilitation could provide meaningful relief, it will not fully resolve Zimbabwe’s power challenges. Sustained investment, grid upgrades and diversification of energy sources will be needed to meet growing demand driven by urbanisation and industrial expansion.
For now, the government is betting that reviving its largest power plant will help stabilise supply, cut costly imports and support economic recovery even as the country continues to grapple with structural constraints in its energy sector.
