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Government and energy groups support initiatives that will help alleviate SA’s energy crisis

The South Africa government has refused all three Environmental Impact Assessment (EIA) applications submitted in October 2020 by Karpowership SA (Pty) Ltd.

The South Africa government has refused all three Environmental Impact Assessment (EIA) applications submitted in October 2020 by Karpowership SA (Pty) Ltd.

Published Sep 8, 2021


DURBAN - AN ENERGY expert, groups representing the business sector and the provincial Department of Economic Development say they support the initiatives that will help alleviate the energy crisis in South Africa.

They were referring to the proposed Karpowership SA multibillion-rand deal, which has drawn mixed reactions as communities and businesses want it to go ahead, while environmental lobby groups say Karpowership SA should not be granted an operating licence.

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Karpowership SA won the preferred bidder status for three power generation projects in Coega, Richards Bay and Saldanha Bay, and promised to inject R18 billion in investment directly into local communities.

The Karpowership SA plan is seen as offering a solution to the instability of the national grid, which would help Eskom overcome the shortage in electricity supply.

Mehmet Katmer of Karpowership SA said: “The LNG (liquefied natural gas) to power project provides 1.22GW of cleaner, reliable and affordable electricity. We are ready to supply electricity 12 months from financial close. We will be generating enough electricity to end up to one full stage of load shedding, and power 800 000 homes.”

The electricity will be provided through three floating power stations (ships) using LNG.

The University of KwaZulu-Natal’s energy expert, Dr Freddie Inambao, said: “Both environmental impact and the direct investment must be considered simultaneously.”

Inambao said the proposed Karpowership SA deal would result in economic development and job creation, and if it did not go ahead, communities and the small, medium and micro enterprises (SMMEs) would be financially strained.

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Zululand Chamber of Commerce and Industry deputy president Hlengiwe Mvubu said sustainable development through investments was critical for the successful revival of the region.

“There is an urgent need to secure infrastructural rebuilding and reliable service provision in order to kick-start Zululand’s economic recovery.”

She said KZN was still reeling from the ravages of Covid-19 and the infrastructural damage which ensued following the violent protests in July.

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“Business confidence has been rocked and socio-economic conditions worsened, all making the likelihood of current unemployment escalating further a devastating reality,” Mvubu said.

Provincial Department of Economic Development, Tourism and Environmental Affairs spokesperson Bheki Mbanjwa said the department was supportive of initiatives that would alleviate the energy crisis. He said the supply of power was one of the key drivers for economic development.

“Such initiatives should be subject to all relevant authorisations being granted by the relevant authorities. We have indicated that any footprint intended for KZN will be closely interrogated,” said Mbanjwa.

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“The national minister is currently perusing the matter. We will await the outcome of processes at that level before commenting further.”

Previously, Sakhowakhe Chonco, KZN treasurer of the National African Federated Chamber of Commerce and Industry, said environmental concerns should not be disregarded, but they should not be looked at in isolation in an economy wrecked by endemic levels of poverty and unemployment.

“It will empower youth. We are concerned about the safety issues, but there are regulations which should be followed to protect the environment.”

Chonco said they wanted all due processes to be followed, and that a balanced approach was needed to rebuild the economy.

“The electricity supply is problematic in the country. Small businesses suffer. They do not have the capacity to do big jobs,” he said.

Nathi Nzimande, the economic transformation committee chairperson in the Musa Dladla Region, said a broader use of natural gas in South Africa could play a role in improving economic conditions, as it could spur growth of new industry and decrease reliance on other fuel types.

“The Karpowership road map shows that the development of natural gas resources brings real benefits to economies, generating employment, increasing GDP and raising foreign direct investment.”

Chris Yelland, energy adviser of the Organisation Undoing Tax Abuse (Outa), has opposed the proposed Karpowership deal.

“I believe they are putting the cart before the horse in holding these hearings. They have no permits from the Ports Authority, and no agreements from Eskom,” said Yelland.

Liz McDaid, from environmental group The Green Connection, said: “We need to ensure that it is not the public that pays for the price variability due to external issues related to dollar/rand and LNG fuel variability, and carbon taxes.”

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