The continuing and increased use of renewable energy sources, including hydropower, is a key strategy to limit the extent of future climate change. Paradoxically, climate change itself may alter the availability of this natural resource, adversely affecting the financial viability of both existing and potential schemes. Here, a model is described that enables the assessment of the relationship between changes in climate and the viability, technical and financial, of hydro development. The planned Batoka Gorge scheme on the Zambezi River is used as a case study to validate the model and to predict the impact of climate change on river flows, electricity production and scheme financial performance. The model was found to perform well, given the inherent difficulties in the task, although there is concern regarding the ability of the hydrological model to reproduce the historic flow conditions of the upper Zambezi Basin. Simulations with climate change scenarios illustrate the sensitivity of the Batoka Gorge scheme to changes in climate. They suggest significant reductions in river flows, declining power production, reductions in electricity sales revenue and consequently an adverse impact on a range of investment measures.