Renewable Energy Projects Awarded PPA’s in Risk Mitigation IPP Procurement Programme – Gas Powerships Left Out


  • This morning in Centurion,  South Africa’s Minister of Mineral Resources and Energy, Mr Gwede Mantashe officiated the signing of power purchase agreements in respect of the 2000MW Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP). 
  • The three gas powership projects totalling 1220MW submitted by Turkish owned independent power producer, Karpowership SA, were excluded.

In March 2021 eight preferred bidders totalling 1845MW and a further 3 eligible bids totalling 150MW were announced.

The eleven projects awarded preferred bidder status outcome included three gas powership projects totalling 1220MW submitted by Turkish owned independent power producer Karpowership SA. The other eight power generation projects are made up of hybrid systems which include solar PV, wind and energy storage technology. The prices for the proposed solutions range from R1 468 per MWh to R1 885 per MWh. The weighted average price is R1 575 per MWh.

Of the eight hybrid energy generation projects, the three awarded to Scatec ASA concluded power purchase agreements (PPA’s) this morning. Read more

Bernard Magoro, CEO of the country’s Independent Power Producer’s office, said that none of the other eight projects were in a position to sign which includes the three Karpowership projects.

No decision has been made to disqualify the remaining projects. “Should the remaining matter not be resolved, the department and other stakeholders will refer this back through the required governance structures to agree the next steps,” said Magoro.

Related news: The Organisation Undoing Tax Abuse (OUTA) has filed an application for the review and setting aside of the decisions by the National Energy Regulator of South Africa (NERSA) to grant the three Karpowership independent power producer (IPP) generation licences. 

South Africa’s Department of Forestry, Fisheries and the Environment refused all three of Karpowership’s environmental impact assessment applications citing incomplete submissions. This prompted the Green Scorpions to recommend criminal charges for earlier attempts by Karpowership SA to bypass environmental regulations. Read more

Related news: The Karpowership SA bid has been riddled with controversy plus allegations of tender rigging

Meanwhile Bloomberg reports that Karpowership bemoans and slates the South African government agencies for stalling on their project bids and their conduct isn’t conducive to creating an attractive investment environment.

There are “notable examples of authorities whose conduct isn’t aligned with the purpose” of the power program, Karpowership told Bloomberg in a statement, citing a lack of transparency and urgency. “We expect the government to work together cohesively to unblock the few remaining bottlenecks preventing the delivery of our projects,” it said.

Specifically, Karpowership listed the obstacles as follows:

  • The failure by the Department of Environmental Affairs to rule on a July 13 appeal filed against its June 23 refusal to grant Karpowership environmental clearance. Karpowership said the appeal process should have legally been completed within 120 days but it has been told a decision can’t be expected before July 1.
  • The departments of transport and public enterprises have yet to make a decision on whether the company’s ships will be allowed to moor at the nation’s ports. An application was made on May 12, 2021.
  • Eskom on March 23 demanded that Karpowership sign a “wide-reaching, open-ended indemnity agreement” that “potentially renders the projects unbankable.” Karpowership hasn’t received a response to a proposal it submitted to Eskom. The other bidders weren’t asked to do the same.
  • A High Court decision allowing DNG Power Holdings Ltd. to appeal a ruling dismissing its allegations that Karpowership’s contract was tainted by corruption.

Author: Bryan Groenendaal

Source on Karpowership SA response: Bloomberg

1 Comment

  1. Makobane Clement Ratau on

    We are newlyregistered energy co-operative limited and would like to know how to get contracts to government as Inđependent power producer

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