South Africa: IPP loses interdict against Eskom to reduce loadshedding for Mafube Local Municipality

• In a case that serves as a warning to independent power producers (IPP’s) when dealing with municipalities in South Africa, Eskom has come out on top. 

This week on Thursday, Judge Edwin Molahlehi delivered his judgement in a case where IPP Rural Maintenance and their special purpose vehicle (SPV), Rural Free State, entered into a trial agreement with Eskom in February to deliver power from a private and communally owned 4.26MW solar farm in Frankfort in the Free State province, to the Mafube Local Municipality, to reduce the level of loadshedding in the area.

The term to reduce the level of loadshedding by providing dedicated supplementary power to the grid is commonly known as ‘voiding’. The country’s state-owned power utility, Eskom, which owns the transmission and distribution infrastructure in the area needed to facilitate the ‘voiding’, backtracked on their agreement a month later informing Rural Free State on 16 March that they must stop ‘voiding’. Rural Free State then turned to the courts to uphold the agreement until the country’s energy regulator, NERSA, resolves the matter with the required licensing and consent.

But Mafube Municipality, who were consensual applicants to the case, failed to submit a signed affidavit confirming their consent to the arrangement. In his judgement, Molahlehi dismissed the case with costs citing that Rural Maintenance and Rural Free State did not receive the necessary authorisation (from Mafube Municipality), to file the case against Eskom.

A section on Judge Edwin Molahlehi ruling in case RFS Eskom 20230420

In a social media statement, Rural Maintenance said that “Despite Rural’s best efforts to lighten the negative effects of load shedding forced onto the Frankfort community due to Eskom not being able to supply South Africa with enough electricity, Rural has been unsuccessful in securing an urgent interdict against Eskom, which would have granted interim relief for Rural to continue with it’s practice of “voiding”, whilst the technical merits are being reviewed by NERSA in its process of dispute resolution.”

Author: Bryan Groenendaal