The value in Karpowership SA deal is in gas supplied by ANC donor and benefactor, Shell South Africa

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  • It has become obvious why the ANC government is relentlessly trying to push through the Karpowership SA deal in South Africa and it has nothing to do with ‘dealing’ with the massive energy crisis created by the ANC themselves through poor planning, poor management, corruption, fraud, looting and sabotage of South Africa’s state-owned energy utility, Eskom.
  • All the while the people of South Africa are expect to face up to 16 hours of blackouts daily in the coming winter months.

The standout person driving the Karpowership SA deal is the country’s Mineral Resources and Energy Minister, Mr Gwede Mantashe.

Mantashe awarded the three Karpowership bids totalling 1220MW preferred bidders status two years ago in the country’s Risk Mitigation IPP Procurement Programme (RMIPPPP). The programme has been a failure where there are key contractual issues, environmental approval challenges, tender rigging allegations and the majority of projects are not bankable. To date, only three renewable energy projects totalling 150MW achieved financial close in the 2000MW programme.

Related news: The Organisation Undoing Tax Abuse (OUTA) in South Africa has also applied 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 generation licences. Read more

The Karpowership projects – if authorised – will emit an irreversible amount of potent methane greenhouse gas (with a global warming potential of 84-86 times that of carbon dioxide over 20 years) and risk jeopardising South Africa’s ability to meet its climate change commitments. Lobby groups believe that South Africa would be better served by focusing on investment in infrastructure to enable a 21st-century electricity system, which consulting firm Meridian points out that global trends show to be largely renewable.

1220MW is certainly not going to solve South Africa’s energy crisis. While every megawatt will help, the country has an electricity supply deficit of 6000MW and now finds itself with a new electricity minister with no office or authority, jumping around the country looking for supply. Read more

The real value of the Karpowership SA deal is the supply of gas

The ANC government have put all their eggs in one basket, a risk for the country, by authorising an exclusive supply agreement to Shell South Africa, a subsidiary of the international petroleum giant Shell plc. Shell plc is a British multinational oil and gas company headquartered in London, England. Shell is a public limited company with a primary listing on the London Stock Exchange and secondary listings on Euronext Amsterdam and the New York Stock Exchange.

The investment arm of the ANC, the Batho Batho Trust, has a 51% per cent stake in Shell South Africas black economic empowerment partner, the Thebe Investment Corporation. The ANC’s links to Shell are very well explained by respected New24 journalist Lameez Omarjee. Read more

The Karpowership SA deal is estimated by the Council for Scientific and Industrial Research to be worth R218 billion over 20 years. Eskom is the off-taker at around R2.30 per kilowatt hour which is more than what the utility currently charges for electricity in most cases. In other words, the utility, which has unsustainable debt of over R400 billion and tax payers’ bailouts reaching R495 billion by 2025, will make a loss on the Karpowership SA deal. In an interview with Radio 702, OUTA’s chief executive officer, Wayne Duvenage, estimates that the Karpowership SA deal will cost the country as much as  R500 billion.

Mystery value chain in Karpowership SA partnership

Karpowership SA is 51% owned by their Turkish principal, Karpowership, a global company that owns and operates the world’s largest and only floating power plant fleet of 36 Power ships, and 49% owned by South African black economic empowerment company, Powergroup SA (no website available).

Dr Narissa Ramdhani meeting Nelson Mandela. Image credit: Dr Narissa Ramdhani – LinkedIn

Powergroup SA is fronted by three directors according to CIPC records namely: the very politically connected, Dr Narissa Ramdhani;  Devaras Moodley, founder and CEO of 1st Group who specialises in private equity investment and advisory services for investment in long-term private & institutional unlisted equity and; Lusanda Vuyokazi Moletsane, Managing Director & CEO of Khumo ea Tsebo Advisory Services plus pastor at ‘Living Faith & Fire’.

The mystery lies in which individuals are behind the company in the form of preference share agreements or other forms of financial instruments that distribute profit. The company, registered in May 2020, appears to be specifically established for the Karpowership SA deal. The directors bring no skills or expertise to the table and have no experience in floating gas power generation. The Centre for Environmental Rights has published a detailed report on the Karpowership deal stakeholders.

According to a study released by the International Institute for Sustainable Development, there are strong indications that South Africa is potentially on the verge of a gas investment flurry that could prove to be a very expensive mistake for the South African people. Many of these indications come from economically and politically powerful gas interests, including interests inside the government. Read the full report HERE

The push is on

Last week, a press release was made by the government’s Department of Transport announcing that South Africa has granted Karpowership SA access to moor their gas power ships at the ports of Ngqura, Durban and Saldanha Bay for 20 years. A so-called Section 79 notice granting the consent was issued by the Department of Transport on the 26th of February 2023 and was only publicly disclosed last week.  Read more

Author: Bryan Groenendaal

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