Turkish company Karadeniz Holdings is embroiled in a legal tussle with its BEE partner Powergroup SA.
Karpowership
Turkish company Karadeniz Holdings has confirmed it has held preliminary talks with a potential black economic empowerment partner to run an offshore electricity-generating project following a fall-out with its current partner.
Karadeniz Holdings is the majority shareholder of Karpowership SA, which the National Electricity Regulator of SA awarded a 20-year deal in 2021 to extract liquefied natural gas from Coega, Saldanha and Richards Bay as part of South Africa’s Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP).
Karpowership’s BEE partner, Powergroup SA (PGSA), has lately taken Karadeniz to court, claiming that Karadeniz was unfairly kicking it out of the R200 billion deal. PGSA intends to interdict Karadeniz’s initiated call option settlement for the acquisition of the 49% stake it holds.
PGSA has accused Karadeniz of repeatedly violating the terms of both the memorandum of incorporation (MOI) and the shareholders’ agreement. It argues that the MOI and the shareholders’ agreement were themselves a violation of the law in some material respects in that if they were not rectified, they might constitute fronting.
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Karadeniz Holdings said in a statement that it had made a significant investment to be part of South Africa’s energy solution with the purpose of stabilising supply, decreasing load shedding by one full stage and enabling inclusive economic growth for all South Africans.
The company said that it had held high standards of governance, including the country’s Broad Based Black Economic Empowerment (B-BBEE) adaptation since participating in RMIPPPP, a process guided by the Independent Power Producers Office under the department of mineral resources and energy.
Commercial director at Karpowership SA Mehmet Katmer said:
We fully appreciate and respect South Africa’s regulatory requirements and the country’s B-BBEE laws. From the outset, we have sought a long-term partner who would shoulder the financial, technical and commercial responsibilities alongside us, as reflected in our shareholders’ agreement. The agreement explicitly requires a reliable and financially robust empowerment partner to participate fully in our commitment to the three projects critical in enabling sustainable energy transition for South Africa.
READ: BEE company drags Karpowership to court over its share in R200 billion deal
Karadeniz Holdings said that it noted the unfounded remarks accusing the company of state capture. The company said that this terminology was not at all applicable to its decision to terminate the partnership with PGSA and should not be used lightly with no foundation or substance.
“Furthermore, the speculative assertations on Karadeniz Holdings’ prospective B-BBEE partner are harmful with the sole purpose of creating controversy and shock rather than to advance the merits of the legal case.”
The company said that these tactics and remarks prejudiced Karadeniz Holdings, but the company would protect and enforce its rights.
Katmer said:
Our priority has always been to find a suitable partner that will serve as a strategic shareholder in not only fulfilling the Economic Development Ownership commitments made by Karpowership SA Consortium but also in implementing innovative solutions to addressing the energy crisis.
READ: ‘SA critics of Karpowership are concerned about something they don’t understand’
Since the awarding of the tender in 2021, Karpowership SA has not started to generate electricity from the floating ships due to incessant court challenges from green lobby organisations.
Karpowership owns and operates the world’s largest and only floating power plant fleet of 36 powerships, providing over 5 000MW of power across Latin America, the Pacific, Africa and Europe.
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