Mar 30, 2023
Eskom May Buy Electricity From Karpowership via Mozambique
(Bloomberg) -- Eskom Holdings SOC Ltd. is considering buying electricity from a Karpowership plant to be located offshore Mozambique after declining to sign agreements to procure power from facilities the Turkish company planned to moor off the South African coast.
The South African utility is in talks with Electricidade de Mocambique for buying the output from a 415-megawatt Karpowership power station, which will be mounted on a ship stationed in Maputo Bay and burn low-sulfur oil.
“Discussions with Eskom, as one of the potential offtakers, are ongoing and an offer has been submitted for their internal review,” the state-owned Mozambican company said in a response to queries. “The final off-taker is expected to be the export market due to the exacerbation of the power deficit that we are witnessing in some countries in the region, including South Africa.”
The beleaguered utility, which supplies almost all South Africa’s power, can’t meet demand and has been subjecting the continent’s most-industrialized economy to rotational blackouts of 10 hours or more a day. The government has said it wants to buy 1,000 megawatts of electricity from neighboring states, many of which are suffering outages of their own.
“Eskom will be undertaking a fair and transparent process to acquire,” that power, it said in a response to queries ,without addressing whether it is wants to tap output from the Karpowership facility. “A procurement strategy is being developed,” it said, adding that it has received unsolicited offers.
The Maputo plant, which adds to a smaller facility operated by the Turkish company off Nacala in northern Mozambique, is expected to get environmental approval in June and start operating in October, EDM said. Karpowership confirmed the October target. EDM also said Zimbabwe and Zambia could be potential buyers for the power.
An off-take accord could attract opposition from environmentalists, who have delayed the company’s South African plans for gas-fired plants on ships by filing objections over the potential impact on marine life.
Karpowership in 2021 won a tender to supply 1,220 megawatts of power to South Africa. In addition to the environmental objections, a lawsuit and Eskom’s demand for an indemnity against any adverse outcomes from corruption allegations have stalled the deal. Karpowership has described Eskom’s demand as irregular and has denied any wrongdoing.
--With assistance from Matthew Hill.
(Updates with Zimbabwe and Zambia being potential buyers in sixth paragraph)
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