Shortening of Karpowership Contracts on the Cards in South Africa

Since 2010, Karpowership, a Turkish power producing firm, has been using off-shore ships as floating gas power plants. 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.

According to Rudi Dicks, head of the project management office in the Presidency and member of the National Energy Crisis Committee, the government is discussing the possibility of reducing the term for Karpowership contracts as an "emergency' measure". Dicks called for contracts of potentially five to ten years would be preferable to the initial term of 20 years. This follows a comment by Electricity Minister Kgosientsho Ramokgopa who recently said that contracts with emergency power producers should not last longer than three to five years.

Despite being named as a preferred bidder in government's Risk Mitigation Independent Power Producer Procurement Programme in 2021 to provide over 1,200MW of power at at three of South African ports, Karpowership has also drawn criticism over its refusal of environmental authorisation for its three vessels at the selected docking sites of Richards Bay in KwaZulu-Natal province, Ngqura in the Eastern Cape province and Saldanha Bay in the Western Cape province.

The Karpowership deal is aimed to lessen the impact of load shedding on the country which has affected the economy, most notably small businesses, with up to 64% of township small businesses stopping operations during scheduled power cuts.