S. Africa Rejects Karpowership Bid for Environmental Permits

South Africa’s environmental authorities rejected an application by Karpowership to generate electricity at three of the nation’s ports, dealing a setback to the government’s plans to reduce outages that are stifling economic growth.

The Department of Forestry, Fisheries & the Environment blocked the request “after due consideration of all relevant information presented as part of the environmental-impact assessment process,” it said Thursday in a statement. The Turkish company applied for projects at the Richards Bay, Ngqura and Saldanha harbors.

S. Africa Rejects Karpowership Bid for Environmental Permits

South Africa’s government in March picked Karpowership as a preferred bidder to supply 1,220 megawatts of electricity to offset a shortage. Eskom Holdings SOC Ltd., the state-owned power company and a near monopoly, has subjected the country to intermittent outages for more than a decade, partly because of poor maintenance at its plants.

Karpowership maintained that it’s met all necessary requirements and will appeal the Environment Department’s decision. The department “allowed a misinformation campaign, funded by special interests, to derail the Department of Mineral Resources and Energy’s strategic plan,” the company said in a statement.

The proposed Karpowership projects -- estimated to cost 218 billion rand ($15.4 billion) over two decades -- have drawn controversy since the award was announced. Environmental groups filed complaints about the company’s plans, while losing bidder DNG Energy Ltd. brought a court application that threatens the entire program.

In its response to the company’s applications to operate at the three sites, the department found that “the minimum requirements, specifically with regard to public participation, were not met.” Impacts on the environment and the evaluation of socio-economic conditions on small-scale fisheries couldn’t be determined because of inadequate studies, it said.

Mineral Resources and Energy Minister Gwede Mantashe said he would consult with his colleagues about the rejection of Karpowership’s applications. Issues debated around clean energy and energy security “may actually make us to be flat footed,” he said in an interview with broadcaster CNBC Africa.

Any appeal by Karpowership against the decision should be submitted to the appropriate administrator, the environment department said.

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