An AI data center could be coming to Lesotho.

In what could become the largest foreign investment in the south African country, US energy company Convalt Energy signed a non-binding Memorandum of Understanding (MoU) with Lesotho’s Ministry of Energy to develop a 1.2GW hydropower project and an integrated AI data center.

First reported by Business Insider, the Kobong Hydropower and AI Data Centre Project would cost an estimated 98 billion Maloti ($5.92bn) to construct. The project is being planned in the Kobong region of eastern Lesotho, the country’s most mountainous region. According to reports, Convalt is expected to launch and fund the mandatory feasibility studies on the project. If successful, the project is expected to enter its construction phase starting in 2029.

If constructed, the project would generate more than ten times the country’s current generation capacity. This could have major implications for a country that currently imports much of its energy from neighboring South Africa.

Further details on the data center project have not been disclosed. Lesotho currently has two operational data centers, which are focused on telecom and government services.

The country currently operates one major hydroelectric facility. The Muela Hydropower Station has an installed capacity of 72MW, and generates more than half of the country’s energy needs. If built, the Kobong facility would be by far the largest generation asset in the country, with reports suggesting it could export power to South Africa.

Convalt Energy is a US-based renewable energy company. It is a portfolio company of the ACO Investment Group and specializes in utility-scale solar, wind, waste-to-power, and hydropower projects. The Kobong project would be the company’s first hydropower project and data center development.

Lesotho, officially the Kingdom of Lesotho, is a landlocked country in southern Africa, fully surrounded by South Africa.