SA’s emergency power procurement programme threatened with further delays

Bogged down by environmental disputes and financing delays, South Africa’s emergency power procurement programme is now being threatened by even more setbacks. DNG Energy has asked that a court case pertinent to the hastening of the programme be delayed until November. According to Bloomberg, the company “maintains it should have been awarded the rights to build three gas-fired plants and filed a case in the High Court against the government that included all of the winning bidders as respondents.” DNG threw a spanner in the works after alleging corruption by government officials, saying it favoured Karpowership (a Turkish company) “for the provision of gas-fired plants that would account for about 70% of the total power supply sought.” The Turkish company has said it will oppose the potential delay. – Jarryd Neves

South African Emergency Power Programme Threatened With Delay

By Antony Sguazzin

(Bloomberg) – South Africa’s emergency power procurement programme, already mired in financing delays and environmental disputes, is threatened with a further setback after a losing bidder asked that a crucial court case be postponed. 

The programme to secure 2,000 megawatts of electricity by August 2022 to alleviate crippling power outages was roiled when DNG Energy Ltd. alleged corruption by government officials. It said they favoured Turkey’s Karpowership for the provision of gas-fired plants that would account for about 70% of the total power supply sought. 

DNG maintains it should have been awarded the rights to build three gas-fired plants and filed a case in the High Court against the government that included all of the winning bidders as respondents. They include Scatec ASA of Norway, Saudi Arabia’s ACWA Power and Electricite de France SA. Most winning bidders, aside from Karpowership, included solar power in their offering.

DNG now wants the case postponed to the end of November, when progress may have been made in a criminal case it has filed and parliamentary hearings into the matter may be complete, according to court documents it sent to Bloomberg. Discussions between the winning bidders and the National Energy Regulator of South Africa may also be over by that date, it said. 

While the winning bidders were initially supposed to reach financial close on July 31, the government extended that date to Sept. 30. DNG, in its court papers, suggested that the government offer a further extension. 

The court case, coupled with finance issues and environmental objections against Karpowership’s ship-mounted plants, which will be located in three ports, threatens to delay the provision of power needed to kick start the economy.

Karpowership said it will oppose the potential delay. DNG will ask for the postponement when the court case starts and the judge can choose to halt the case or allow it to proceed. 

(Updates with location of plants in last paragraph)

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