Lesotho has signed a binding agreement with a United States energy company for a M98 billion project that would pair the country’s largest ever hydropower facility with an artificial intelligence data centre, in what the government describes as the single largest foreign investment commitment in the kingdom’s history.
The Ministry of Energy signed a binding Memorandum of Agreement with US-based Convalt Energy on 4 June 2026 for Project Kobong, a combined hydropower and AI data centre development valued at M98 billion (approximately $6.2 billion). The agreement, which follows an earlier non-binding MoU and diplomatic groundwork involving discussions between King Letsie III and former US House of Representatives Majority Leader and Convalt Energy board member Richard Gephardt, commits the parties to developing at least 1,200MW of renewable hydropower capacity in the Kobong region of Mokhotlong District alongside an integrated, green-powered artificial intelligence data centre.
The government described the agreement as the largest investment commitment in Lesotho’s recorded history. If the project is constructed as planned, it would generate more than sixteen times the country’s current installed generation capacity of approximately 72MW, primarily derived from the Muela Hydropower Station, which supplies more than half of domestic electricity needs.
“We are thrilled to be partnering with our Lesotho partners to bring clean energy, jobs and economic development to their nation.”
Convalt Energy
From importer to exporter
Lesotho currently imports a substantial portion of its electricity. In 2024, the country imported 438 gigawatt-hours out of total national consumption of 970 gigawatt-hours, drawing primarily from South Africa’s Eskom and Mozambique. The country’s domestic demand stands at approximately 209MW. At full 1,200MW operational capacity, Project Kobong would satisfy all domestic demand and leave an estimated surplus of approximately 991MW available for export into the region, most logically to South Africa, reversing an energy dependency that has persisted for decades.
The government said the project is designed to bolster energy independence, reduce dependence on imported electricity, generate employment, and support local business development. It also positions Lesotho to become what the government described as a regional centre for green energy and digital infrastructure.
| Project element | Detail |
|---|---|
| Total project value | M98 billion (~$6.2 billion) |
| Hydropower capacity | 1,200MW (pumped storage) |
| Solar capacity (wider partnership) | ~4.6GW (ground-mounted and floating) |
| Battery energy storage | Up to 4GWh |
| Location | Kobong region, Mokhotlong District |
| Agreement signed | 4 June 2026 |
| Construction start (targeted) | 2029 (subject to feasibility) |
Sources: Convalt Energy / Ministry of Energy / International Water Power / Investment Monitor. USD equivalent at approx. M16.38/$1 (June 2026).
Broader than the headline figure
The $6.2 billion binding agreement covers the hydropower facility and AI data centre component, but the wider partnership announced alongside it extends further. International Water Power reported that the agreement also envisages the development of approximately 4.6GW of solar generation capacity, including ground-mounted and floating solar installations, and up to 4GWh of battery energy storage systems. The Lesotho project company is expected to sit within Convalt International, a proposed entity intended to hold the company’s international assets, subject to the completion of corporate and regulatory processes.
Convalt said it may also have the opportunity to supply solar modules for the project from its US manufacturing operations, with deliveries potentially commencing in the fourth quarter of 2028. Financing is expected to draw from a combination of equity investment, multilateral development finance institutions, strategic partners and project finance facilities.
About Convalt Energy
Convalt Energy is a US-based renewable energy company and a portfolio company of the ACO Investment Group. It specialises in utility-scale solar, wind, waste-to-power and hydropower projects. Project Kobong would represent the company’s first hydropower project and first data centre development. Lesotho currently has two operational data centres, focused on telecommunications and government services.
The project remains subject to mandatory feasibility studies, which Convalt is expected to fund and launch. Construction is targeted to begin in 2029 if those studies confirm viability. The agreement is nonetheless binding, and the government’s framing of it as the largest foreign direct investment in the kingdom’s history reflects the scale of what is at stake if the project proceeds to completion.
By Seipati Matobo | Lesotho Tribune
