South Africa: Karpowership Agrees to Donate Game Farm in Power Plant Deal With Govt

7 September 2023

Harare — Karpowership agreed to purchase and donate a game farm to a provincial wildlife authority in an effort to speed up permission for one of the three gas-fired power stations it plans to build in South Africa, Bloomberg reports.

In exchange for the game farm, the Turkish company claimed that Ezemvelo KZN Wildlife, which oversees protected areas in the province of KwaZulu-Natal in the south, had agreed to refrain from objecting to its proposal for a 450 megawatt ship-mounted power plant at Richards Bay harbour.

The agreement, which is a component of Karpowership's request for environmental certification of the plant, is the most recent development in a tale that has lasted more than two years and involved the firm fighting legal battles and environmental opposition to its plans.

Since winning about 60% of a state tender in March 2021 for 2,000 megawatts of emergency electricity to address the energy crisis, Karpowership has been working on three projects. However, a disagreement over the positioning of the power ship with the national port operator will cause a delay in the 450 megawatt project at the Port of Ngqura. It was said that the delay in Ngqura might be between 12 and 18 months because the ship needs a new spot in the harbour to moor.

Karpowership still needs to obtain final environmental approval, sign a power-purchase deal with the country's largest power company Eskom Holdings SOC Ltd., and extend its access to the national grid before the end of this month (September 2023). Karpowership, a Turkish power producing firm, was using off-shore ships as floating gas power plants since 2010. The company contracts to provide countries with power extends up to 20 years. With South Africa looking to Kapowership to assist with its load shedding crisis, concerns have been raised at the cost and the length of time of the contracts, as well as its impact on the environment.

With South Africa looking to Kapowership to assist with its electricity crisis, concerns have been raised at the cost and the length of time of the contracts, as well as its impact on the environment.

In August 2023, Karpowership offered to reduce the initial 20-year contract to five years in an apparent effort to get a multibillion rand "emergency" electricity supply arrangement with South Africa, according to a Daily Maverick report.

However, there is a catch: a shorter contract costs more money. The Council for Scientific and Industrial Research (CSIR) estimated that the transaction might cost as much as R228 billion (U.S.$12,1 billion), but the precise amount is still unknown.

The five-year proposal follows the protracted debate about the merits of procuring power from the Turkish company. Karpowership Chief Commercial Officer Zeynep Harezi reportedly said her company is prepared to send five floating powerships to South Africa and to start producing electricity within "90 days" or less.

The Karpowership deal is aimed to helping the economy, notably small businesses, because up to 64% of township small businesses stop operations during the scheduled power cuts - and it has President Cyril Ramaphosa's support. He said the agreement is "the way to go right now to add those megawatts".

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