Karpowership Committed to South Africa Even as Setbacks Mount

(Bloomberg) -- Karpowership, the world's biggest supplier of floating gas-fired power plants, said it's committed to delivering what would be its biggest ever project as South African activists mounted a fresh legal challenge against the company's plans.

The Organisation Undoing Tax Abuse said on Thursday it sued the National Energy Regulator of South Africa for granting generation permits to the Turkish company in September saying the country's best interests weren't taken into account regarding the cost of contracts and the impact on the climate. 

While the permits allow Karpowership to supply the country from three ship-mounted power plants, progress has been stalled by another court case over the award of the contracts. The company is also yet to secure environmental approval or the right to moor its vessels in the country's ports. The initial environmental approval was overturned after activists made representations to the environment ministry.

“We hope the South African public realizes how much effort in terms of time and resource we are putting in these projects in order to deliver them as soon as possible,” Karpowership said in a statement sent to Bloomberg. “We sincerely hope that we can get the much-needed support from them against these orchestrated attacks to our projects.”

While South Africa has been hit by intermittent power outages for more than a decade, Karpowership's opponents object to the company burning a fossil fuel when the country has abundant wind and solar power resources.

The award of the contracts to allow Karpowership to supply South Africa with 1,220 megawatts of electricity from gas-fired power plants are part of an emergency program to procure 2,000 megawatts of power. 

The challenges that the delays are causing to the power provision program “are unconscionable,” Karpowership said. “Without these delays the process would have run as scheduled and our powerships would have already been on track to be connected to the country's grid this August.”

Brazil, Ivory Coast

The Turkish company said OUTA had not opposed another company that will supply power using gas as part of the so-called emergency power program. It “appears to be a belated attempt to derail the delivery of three critical and much needed projects.”

The South African contracts are unusual in their size and duration. By comparison, Karpowership will this year start projects to supply Brazil with 560 megawatts and Ivory Coast with 200 megawatts.

A South African study in March last year said the contracts would cost 218 billion rand ($13.7 billion) over 20 years. The price of gas has surged since then.

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