Source: ZESCO faces US$5m penalty over Kariba water overuse – herald
Business Reporter
Zambia’s power utility, ZESCO Limited, could incur a penalty of about US$5 million for severely exceeding its hydropower generation water allocation at the Kariba Dam by the end of 2025.
The utility’s current water consumption for power generation means it could exceed its allocation by 4,7 billion cubic metres (BCM), according to the Zambezi River Authority (ZRA).
The projected overuse will trigger a penalty fee of approximately US$5,1 million.
Together with the Zimbabwe Power Company, the power utilities were allocated 28 BCM, shared equally, for the 2025 calendar year for power generation.
“A slightly less damaging scenario, involving overuse limited to 2 billion cubic metres, would still cost about US$3,9 million in penalties but would leave a minimal 1,6 billion cubic metres of water in reserve for the next year,” says ZRA.
The ZRA is a bi-national entity jointly owned and equally governed by Zambia and Zimbabwe.
Its primary function is to manage the Kariba Dam complex and the water resources of the Zambezi River that form the border.
The dam houses two separate hydroelectric power stations: the Kariba North Bank Power Station (ZESCO) in Zambia, with an installed capacity of 1 080 megawatts, and the Kariba South Bank Power Station in Zimbabwe with an installed capacity of 1 050MW.
ZRA is rationing Kariba water due to low water levels in Kariba Dam, caused by poor rainfall and prolonged droughts in the region.
Recurrent droughts in recent years have caused the Kariba Dam’s water level to drop to critically low levels, severely impacting hydropower generation and affecting local communities.
The water rationing is necessary to ensure there is enough water for consistent hydropower generation and to prevent the complete depletion of the reservoir.
As a result, Zimbabwe and Zambia are facing reduced power generation, which has worsened energy supply deficits in the two countries.
For 2026, the ZRA has allocated 30 BCM of water for power production at the dam.
The conservative allocation is accompanied by a temporary, yet significant, cap on power generation for the two generating utilities.
The allocation decision follows hydrological simulations premised on a “normal to below normal” conservative inflow projection, estimated to yield approximately 37,5 BCM of gross inflows to Lake Kariba throughout 2026.
To manage the dam’s recovery during the onset of the rainfall season, the ZRA has imposed an average power generation cap for January and February 2026.
During these two months, each utility will be limited to an average power generation cap of 250MW, resulting in a combined total cap of 500MW.
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