Energy Minister Peter Kapala says Zambia is cancelling the contract to construct the Batoka Hydro Power Plant because proper procurement methods were not followed when the deal was struck.
Mr Kapala said in an interview that the Zambezi River Authority overseeing the construction of the dam, estimated last year that the project would cost $5 billion.
“We are disengaging from that contract and we hope to re-advertise it and revisit everything that was agreed to before,” said Mr. Kapala. “Mainly, it was because of the cost, it was just too much.”
General Electric who are the main contractors had no immediate comment.
PowerChina who are also working on the project did not immediately respond to a request for comment.
Work on the 2,400-megawatt Batoka Gorge project was initially scheduled to begin in 2020, but it encountered several delays, including the onset of the coronavirus pandemic and difficulties in securing funding.
“The latest information is that the hydrology of Zambezi might not favor the establishment of a 2,400 megawatt hydro-plant,” Mr. Kapala said.
“We could reach that if maybe we do a hybrid of solar and hydro itself, but the indications are that we could be looking at far much less than the 2,400, it could be maybe even 1,000 megawatts.”
Zambia and Zimbabwe jointly selected General Electric and Power China to build the plant.
Gloria Magombo, Zimbabwe’s secretary for energy and power development, on Wednesday said she was unaware of Mr. Kapala’s comments and the Ministry would respond at a later stage.