Eskom pulls the plug on Karpowership: Big setback in South Africa’s power push

Eskom Holdings SOC Ltd., South Africa’s state-owned power utility, has decided to withdraw transmission capacity reservations for winners of a tender for emergency power provision, including Karpowership, a Turkish provider of ship-mounted power plants. This move comes as the projects failed to meet the December 31 deadline for completing their financial arrangements. The decision is a setback for Karpowership’s three gas-fired projects, accounting for 1,220 megawatts, which faced legal challenges and environmental opposition. Eskom expressed regret over the expiration of budget quotes, stating that the projects were intended to address the country’s urgent need for additional power generation. This development underscores the challenges facing South Africa’s efforts to alleviate persistent power outages and economic impacts.

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Eskom Ends Grid Access for Karpowership
By Antony Sguazzin

Eskom Holdings SOC Ltd. will no longer reserve the transmission capacity it had agreed to set aside for winners of a South African tender for emergency power provision that didn’t meet a Dec. 31 deadline to complete their financial arrangements.

The decision, which Eskom disclosed in a response to a query from Bloomberg, is a blow for Karpowership, the Turkish provider of ship-mounted power plants, and further reduces the likely impact the 2021 program will have in making a dent in the almost daily power outages that are crippling South Africa’s economy.

Only a fifth of the 2,000 megawatts of power generation capacity awarded is being built after a number of the 11 successful projects failed to reach so-called financial close. Karpowership’s three gas-fired projects, which have been beset by lawsuits and challenges from environmentalists, account for 1,220 megawatts of the total and are yet to reach financial close.

Read more: Patrick McLaughlin exposes Eskom bill sabotage: Minister Mantashe’s hidden agenda unveiled

“Eskom finds the expiration of the budget quotes regrettable as these projects were aimed at bringing much needed generation capacity to the grid,” the utility said in a statement later on Friday. The projects were initially given a financial close deadline of July 31, 2021.

Eskom’s decision means that the transmission capacity, which is in short supply in South Africa, can now be awarded to other projects, and those of Karpowership and the other bidders are no longer guaranteed access if they proceed.

The other projects that have had their access rights revoked are a 200 megawatt gas-to-power plant at the port of Coega that was initially proposed by Mulilo Energy Holdings Ltd. and TotalEnergies SE and a 180 megawatt solar power plant that had been planned by Mulilo, Eskom said.

Scatec ASA was the first winner to announce that it had reached financial close and is proceeding with three solar power projects to supply 150 megawatts.

Karpowership didn’t immediately respond to a request for comment. (Bloomberg)