Lesotho has entered a binding agreement with US firm Convalt Energy to develop a combined hydropower and artificial intelligence (AI) data centre project worth approximately 98bn loti ($6.2bn).

The Kobong Hydropower and AI Data Centre Project involves at least 1,200MW of renewable hydropower capacity paired with a green-powered AI data centre.

The government described it as the largest investment commitment in the country's history.

Lesotho's administration said the project is designed to bolster energy independence, cut dependence on imported electricity, generate jobs, and support local business development.

Officials also pointed to the country's renewable energy potential as a competitive advantage as nations vie to host infrastructure for next-generation AI and digital services.

The agreement, however, represents an expression of intent rather than a construction commitment, with feasibility studies and further regulatory processes still to be completed before work can begin.

The government said the project, if realised, could establish Lesotho as a regional centre for green energy and digital infrastructure.

"For many years, Basotho have spoken about the immense potential of our natural resources. Today, we are beginning to see practical steps towards converting that potential into opportunities that can benefit current and future generations," said government spokesperson Boitelo Rabele.

“This project presents an opportunity for Lesotho to strengthen its energy independence, reduce reliance on imported electricity, create jobs, stimulate local enterprise development and attract further investment into the country”, he added.

Lesotho, a landlocked monarchy surrounded by South Africa, is participating in a larger African energy project.

The European Union announced a €545m ($638m) package last September to support electrification across nine African nations, including Lesotho, targeting power grid modernisation, rural clean energy access, and the continent's wider clean-energy transition.