Following much contestation from environmental groups, Turkish energy company Karpowership’s South African subsidiary has succeeded in getting environmental authorisation for its Richards Bay environmental-impact assessment (EIA) application.
This represents a critical milestone in Karpowership’s participation in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) and towards reaching financial close on the project.
The group has been seeking to implement three ship-based floating gas-to-power projects on the South African coast for more than two years after being named a preferred bidder in the RMIPPPP.
Karpowership had three projects approved as preferred bidders under the RMIPPPP in March 21; however, it has been experiencing prolonged regulatory setbacks in getting the projects to financial close.
The environmental licences on the three projects, earmarked for the ports of Richards Bay, Saldanha Bay and Ngqura, are the only outstanding licences required to get the projects going.
Karpowership had undertaken multiple public participation processes and submitted multiple EIAs, which failed to meet the requirements previously.
The company is confident that the projects could be delivered within 12 months of achieving financial close.
Using imported liquefied natural gas as a fuel source, the powerships will each entail between 320 MW and 450 MW of capacity being transmitted to substations on the shore.
Various environmental organisations had been objecting to the implementation of another expensive fossil fuel-based solution, particularly because it was based near port communities, such as small-scale fishers, and because it might impact on marine life.
Another point of issue had been the 20-year contract length specified by the State in the RMIPPPP, with critics questioning why the country should be tied to an “emergency” option for so long.
The RMIPPPP, launched in 2020, aimed to procure 2 GW of additional power within 12 to 18 months, but very few of the awarded projects reached financial close within the timeframe.
Of the 11 RMIPPPP preferred bidders, only five projects have started construction.
Meanwhile, Karpowership said the Department of Forestry, Fisheries and the Environment’s decision to grant environmental authorisation for the Richard’s Bay EIA not only vindicated the company’s thorough EIA methodology and process but also demonstrated government’s willingness to objectively evaluate the information at hand.
The decision also further justified that powerships exceeded both international and South African environmental standards, the company stated.
Moreover, Karpowership envisioned dedicating R6-billion to economic development in Richards Bay over the life of the project through various job opportunities and socioeconomic initiatives.
To now meet financial close, Karpowership has to finalise agreements with Transnet National Ports Authority.
Karpowership receives long-awaited enviro approval for Richards Bay powership