DNG Energy Granted Postponement in Karpowership Case

  • DNG Energy (DNG), the begrudged losing tenderer in South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP), has been granted a postponement by the North Gauteng High Court until 30 November 2021, in their case against Karpowership SA, who won preferred bidder status in the 2000MW emergency power procurement programme. 
  • DNG requested an extension to the dates of the court hearing to give effect to material evidence that will come out of the criminal investigation that is currently being undertaken by the Hawks on the matter
  • DNG claim that the tender process was “grossly and blatantly flawed, corrupt and procedurally unfair”. 
  • That allegations have been rejected by the government and Karpowership SA.

Mr Aldworth Mbalati, the founder and chief executive of DNG Power Holdings. Image credit: DNG

Responding to what he labelled the Ministry’s “specious smear” DNG Group Chief Executive Officer Aldworth Mbalati said, “Instead of behaving in a deliberately partisan manner with specious smears against DNG, the Mineral Resources and Energy Department (DMRE) should admit to what is now widely accepted that there were corrupt manoeuvres behind the success of RMIPPPP bids. Evidence I have given to the Hawks demonstrate that. The reason for seeking a postponement to the court proceedings I have initiated is so that the criminal evidence the police are now investigating can be laid before the court. I want a corrupt-free bidding process and I’m confident that is the national interest.”

The RMIPPP programme comprises eleven projects totalling 1996 MW. Of this, some 1220 MW, or 60%, is made up of three floating power plants and associated floating storage and regasification units from Karpowership SA. The balance comprises eight projects, ranging from 75 MW to 200 MW, incorporating various hybrid combinations of wind, solar photo-voltaic (PV), battery energy storage and diesel/gas engines.

Revised commercial close deadline will not be met

What this now means is that the preferred bidders will not reach commercial close deadline as indicated by South Africa’s Mineral Resources and Energy Minister, Mr Gwede Mantashe, who controversially shifted the deadline for financial close from 31st July 2021 to 30th September 2021.

At the time, the DMRE said that that it extended the RMIPPP programme’s commercial closing date to 30 September 2021 to allow for finalisation of regulatory processes, including Eskom board approval to conclude power purchase agreements (PPAs) with the successful bidders, and related approvals in terms of the Public Finance Management Act (PFMA).

The DMRE further stated that the extension for financial closure was not based on the state of readiness of any of the preferred bidder projects, but rather on the lack of readiness by Government, and by Eskom as the buyer of the electricity, to conclude contractual agreements with the preferred bidder projects.

The objective of the RMIPPPP is to fill the current short-term supply gap, alleviate the current electricity supply constraints and reduce the extensive utilisation of diesel-based peaking electrical generators in the country.

Author: Bryan Groenendaal

Leave A Reply

About Author

Green Building Africa promotes the need for net carbon zero buildings and cities in Africa. We are fiercely independent and encourage outlying thinkers to contribute to the #netcarbonzero movement. Climate change is upon us and now is the time to react in a more diverse and broader approach to sustainability in the built environment. We challenge architects, property developers, urban planners, renewable energy professionals and green building specialists. We also challenge the funding houses and regulators and the role they play in facilitating investment into green projects. Lastly, we explore and investigate new technology and real-time data to speed up the journey in realising a net carbon zero environment for our children.

Copyright Green Building Africa 2024.