Zambia’s state-backed investment company, ZCCM Investments Holdings, has entered into a partnership with Chinese-owned Wonderful Group Services to develop a 600-megawatt coal-fired power station aimed at addressing the country’s persistent electricity deficit.
The project, valued at approximately $452 million, will be developed in two phases and is expected to strengthen Zambia’s power supply as the country grapples with reduced hydropower generation caused by prolonged dry conditions.
Under the agreement announced on Monday, the first phase will involve the construction of a 300-megawatt facility, with capacity later doubled to 600 megawatts in the second phase.
ZCCM-IH said the second phase is expected to be completed within five years after the first phase becomes operational, although no specific construction timeline has yet been disclosed.
The project will be undertaken through a special purpose vehicle known as Ever Great Energy Company Limited, a subsidiary of Wonderful Group Services.
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As part of the arrangement, ZCCM-IH will invest US$54.2 million in exchange for a 30 percent equity stake in the project company.
The investment reflects Zambia’s growing urgency to diversify its electricity generation mix as climate-related challenges increasingly affect hydropower production, which has traditionally supplied the majority of the country’s electricity.
Authorities estimate that Zambia currently faces a peak power deficit of around 1,400 megawatts, a gap that has resulted in power rationing and operational challenges for businesses and households.
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The energy shortage has been exacerbated by lower water levels at the Kariba Dam, one of southern Africa’s most important hydropower facilities, which straddles the border between Zambia and Zimbabwe.
Declining rainfall and recurrent drought conditions have significantly reduced generation capacity at the dam in recent years, prompting governments across the region to seek alternative energy sources.
For Zambia, ensuring a reliable electricity supply is viewed as critical to supporting the mining sector, which remains the backbone of the economy.
The country is Africa’s second-largest copper producer and has set an ambitious target of increasing annual copper output to 3 million metric tonnes by 2031, more than double current production levels.
Meeting that target will require substantial additional power generation, as mining operations are among the largest consumers of electricity in the country.
Government officials have argued that expanding generation capacity through a diversified energy mix—including coal, solar and other technologies—is necessary to support industrial growth and maintain economic competitiveness.
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The planned coal project, however, comes at a time when many countries and international financial institutions are seeking to reduce reliance on fossil fuels as part of global climate commitments.
Supporters of the project argue that Zambia’s immediate energy security needs and industrial development goals require dependable baseload power, particularly as hydropower output becomes increasingly vulnerable to climate variability.
The agreement marks one of the largest recent investments in Zambia’s power sector and highlights the growing role of Chinese companies in financing and developing energy infrastructure across Africa.
If completed as planned, the plant is expected to provide a significant boost to Zambia’s electricity supply, support mining expansion and help reduce the country’s dependence on hydropower during periods of drought.
