Turkish multinational Karpowership SA could soon have one of its three controversial gas-to-power projects up and running after jumping a crucial regulatory hurdle.
Karpowership SA on Friday was granted environmental authorisation by the Department of Forestry, Fisheries and Environment (DFFE) for its Richards Bay environmental impact assessment (EIA) application.
This is a critical milestone in Karpowership SA’s participation in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) that will lead to reaching financial close on the project.
The company has proposed to locate its three powership projects at the ports of Richards Bay, Ngqura and Saldanha to generate electricity from natural gas and transmit it to substations linked to the national grid.
The proposed projects aim to provide over 1.2GW of urgently-needed, reliable power to the grid, which has an over 6GW electricity deficit.
Kaporwership SA on Friday said the outcome of the EIA application in Richards Bay represented a meaningful turning point in this extensive process.
It said all parties involved, including its stakeholders and various other interested and affected parties (IAPs), had worked cohesively and supported it to showcase that its LNG-to-power projects will make an important contribution to combating South Africa’s energy crisis.
“The decision not only vindicates Karpowership SA’s thorough EIA methodology and process that included comprehensive and inclusive public participation processes in Richards Bay, but also demonstrates the department’s willingness to objectively evaluate the information at hand,” it said.
“This decision is further justification that our Powerships exceed both international and South African environmental standards, and we are pleased that this has been recognised.”
Karpowership SA is proposing a controversial 20 year gas-to-power project at a potential cost of R200 billion.
The company said it was proud to be able to play a significant role with its state-of-the-art LNG-to-power technology in Richards Bay, assisting South Africa in achieving its net-zero targets.
It said it also recognised the importance of this decision in enabling it to power beyond the grid in its efforts to play a role in South Africa’s energy transition.
“We have previously stated our commitment to the local communities through various job opportunities and socio-economic initiatives,” it said.
“For our Richards Bay project, approximately R6 billion is dedicated to economic development for the life of the project.”
Karpowership SA said the next step was to meet financial close, which would require it to finalise its agreements with Transnet National Ports Authority (TNPA).
BUSINESS REPORT