The financial viability of a floating gas project by Karpowership in South Africa, mooted by the government as an emergency measure to plug electricity shortages, hangs in the balance.
According to reports, two factors are posing a big threat to the fate and viability of the local arm of Turkey-based conglomerate Karadeniz Holding, which hopes to moor its powerships in three SA ports.
The first is that commercial banks and other financial institutions are becoming nervous about providing funding to Karpowership to help it to set up ships in Richards Bay, Ngqura and Saldanha Bay. These ships use gas as fuel to generate electricity.
The second is that the government wants to adjust the duration of its procurement of power from Karpowership to five years from an initially agreed 20, which would have cost taxpayers more than R100-billion. That is the cost to Eskom and the fiscus, with fuel included, to procure electricity from Karpowership.