Karpowership 3.3 Billion Per-Year-Freebie

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  • The company’s own figures suggest Eskom will be drawing only 40% of Karpowership’s available power, while paying for a minimum of 72.7% — meaning the effective tariff will be nearly double what minister Gwede Mantashe told the public in March.

As Karpowership and energy minister Gwede Mantashe battle to keep the risk mitigation independent private power procurement programme (RMI4P) alive, documents scrutinised by amaBhungane appear to disclose the extent to which Eskom is expected to pay the Turkish powership group for “nothing” under a generous “take-or-pay” provision.

While the figures are only available for Karpowership’s bids, the same skewed demand and supply ratios would apply to other RMI4P bids, underlining criticism of the design of the tender which results in much higher pricing than necessary.

Related news: Karpowership mess puts Risk Mitigation IPP Procurement Programme in disarray 

When the three controversial powership projects belonging to the Turkish Karadeniz group applied to the National Energy regulator of SA (Nersa) for generation licences, they requested that almost all meaningful economic data be kept secret when a decision is published.

Related news: Karpowership SA bid riddled with allegations of corruption

The secrecy has been widely lambasted, but it appears that Nersa slipped up when it approved the licences and published the three heavily redacted reasons-for-decision documents on 29 October. 

The apparent slip reveals how massively detrimental the Karpowership power purchase agreements will be for Eskom. This is reflected in an “effective” revenue per kWh for Karpowership of almost twice the “evaluation” tariff that minister Mantashe announced in March.

Author: Dewald van Rensburg

Read more of this exclusive story from the amaBhungane Centre for Investigative Journalism HERE



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