Eskom Eyes Karpowership’s Offshore Mozambique Plant for Power Boost

Frankfort's Solar Success Faces Eskom Legal Challenge
  1. Eskom, South Africa’s beleaguered power utility, is in talks with Electricidade de Mocambique (EDM) to purchase electricity from a 415 MW Karpowership floating power plant located offshore Mozambique, as the country struggles with ongoing power shortages and blackouts.
  2. The Maputo-based Karpowership facility, which will burn low-sulfur oil, is expected to receive environmental approval in June and begin operations in October, addressing the region’s worsening power deficit.
  3. The potential off-take agreement may face opposition from environmentalists, who have previously delayed Karpowership’s plans in South Africa over concerns about the impact on marine life.

South African power utility Eskom is actively considering the procurement of electricity from a Karpowership floating power plant to be located offshore Mozambique. This development follows Eskom’s decision not to sign agreements for power procurement from facilities that the Turkish company intended to moor off the coast of South Africa.

Eskom, which provides nearly all of South Africa’s electricity, has struggled to meet demand, resulting in rotational blackouts lasting 10 hours or more per day. The South African government aims to purchase 1,000 MW of electricity from neighboring countries, many of which are also experiencing power outages.

To address these power shortages, Eskom is in discussions with Electricidade de Mocambique (EDM) to buy the output from a 415 MW Karpowership power station. This facility will be mounted on a ship stationed in Maputo Bay and will utilize low-sulfur oil as fuel.

According to the state-owned Mozambican company, “Discussions with Eskom, as one of the potential offtakers, are ongoing and an offer has been submitted for their internal review.” They added that the final off-taker is likely to be the export market due to the worsening power deficit in some countries in the region, including South Africa.

In response to queries, Eskom stated, “Eskom will be undertaking a fair and transparent process to acquire,” the power. However, they did not specifically address whether they plan to tap output from the Karpowership facility. They continued, “A procurement strategy is being developed,” and acknowledged receipt of unsolicited offers.

The Maputo plant, in addition to a smaller Karpowership facility off Nacala in northern Mozambique, is expected to receive environmental approval in June and commence operations in October, according to EDM. Karpowership has confirmed the October target.

A potential off-take agreement with Karpowership may face opposition from environmentalists, who have previously delayed the company’s plans for gas-fired plants on ships in South Africa by filing objections over possible impacts on marine life.

In 2021, Karpowership won a tender to supply 1,220 MW of power to South Africa. However, environmental objections, a lawsuit, and Eskom’s demand for indemnity against any adverse outcomes stemming from corruption allegations have stalled the deal. Karpowership has deemed Eskom’s demand as irregular and denied any wrongdoing.

Related

Rateweb

South Africa’s primary source of financial tools and information

Contact Us

admin@rateweb.co.za

Disclaimer

Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.