The big story: Nersa and Karpowership

“Karpowership”: it’s not an anime series about ninjas on ships, though that would have been awesome. Instead, it’s the company at the centre of an SA government energy deal that will see a foreign-based company raking in the big bucks and locking us into its terms for 20 years. 👾 Smells a bit too much like the arms deal for our liking…

🔹*So who is Karpowership?*

It’s a Turkish company that produces power from gas-fired power stations on ships. 

It came onto the SA scene in March when, given our energy crisis, the Department of Mineral Resources and Energy’s (DMRE) ran a programme to invite Independent Power Producers to fast-track around 2 000 MW of new electricity. 

If you were thinking this should have been along the lines of solar panels and wind farms, you would have been right. Instead Gwede Mantashe’s department bizarrely chose a gas-guzzling, eye-wateringly expensive ship as its preferred bidder. 😕

🔹*What’s the problem?*

The contract, if approved, will cost us R10.9-billion A YEAR. Gulp!

In June, Barbara Creecy’s national department of forestry, fisheries and the environment refused to grant an environmental permit. It noted – among other concerns – failure to conduct public participation, plus inadequate studies on the potentially harmful effects of underwater noise. Karpowership is appealing the decision. 

The company also faces a legal challenge from a rival bidder that claims the process was fraudulent, PLUS an inquiry by Parliament. Mantashe’s department has been very accommodating of Karpowership, extending deadlines that seemed solely to accommodate the company’s battle with the environment department. 

Why is it in the news now? Despite the ongoing legal fight and environmental concerns, the National Energy Regulator of South Africa (Nersa) on Tuesday controversially issued licences for the company – an important regulatory hurdle. 

🔹*What’s next?*

Now it falls to civil society, as usual, to fight back. Environmental group the Green Connection says it’s considering taking legal action and Outa – the Organisation Undoing Tax Abuse – is already on the case, asking Nersa to provide reasons for its decision. 

As DM’s Ferial Haffajee pointed out on Twitter: 

_“Comment: looks like @NERSA_ZA is captured? Why on earth approve @KarpowershipSA for emergency generation when it will take five years to build the ships before deploying them.”_

Given the existing concerns, including by a government department, civil society may prevail, scuppering the deal. But civil society shouldn’t have to keep saving us from these attempts at corruption on a massive scale. 🤷🏽‍♀️

This article appeared as part of The Wrap, 23 September 2021. Sign up to receive our weekly updates.