Game over for R200 billion power ships in South Africa
The controversial Karpowership saga has ended in South Africa. The Pretoria High Court ordered that the group’s three electricity generation licences be overturned on Thursday (31 July).
The licences were issued by the National Energy Regulator of South Africa (Nersa) in 2021 as part of the government’s plan to sign 20-year deals with the company to provide an emergency power source.
To address the growing load shedding crisis, the government planned to sign 20-year deals with Karpowership to anchor three floating generators in key harbours, at a cost of approximately R200 billion over the contract period.
The Turkish company provides gas-powered power ships and was named as one of the preferred bidders in the Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) launched by the energy department in 2020.
However, on top of legal challenges brought on the grounds of environmental damage the ships would have caused, the Organisation Undoing Tax Abuse (Outa) also challenged the validity of the licences.
Outa filed a case against the licensing in April 2022, and called for the court to review Nersa’s decisions to grant the licences, leading to a protracted three-year legal battle.
While the power ships ultimately won environmental authorisation to connect to South Africa’s grid, they missed a December 2023 grid integration deadline, leading to power utility Eskom eventually cancelling the bids.
Outa said that the various legal challenges played a role in this, but added that the removal of the generation licences is the final end of the saga.
“The Karpowership deals are now absolutely dead. It will never be loaded onto your electricity bill,” said Advocate Stefanie Fick, Executive Director of Outa.
“This ruling is a powerful affirmation that decisions involving billions in public funds must comply with the law.”
Court ruling ends three-year battle
The High Court said the “decision of the first respondent [Nersa] to award a generation licence to the second respondent [Karpowership]” was “reviewed and set aside”, for each of the three generation licences.
The court order confirmed a settlement agreement drawn up between Outa and Nersa. Karpowership had been cited in the case and initially opposed it, but withdrew earlier in the year.
As part of the settlement agreement, Nersa agreed to withdraw its opposition to Outa’s review application, and the court formally set aside the impugned licences.
Further, the court ordered Nersa to pay costs. This reflects the seriousness of the matter and the substantial public interest involved, Outa said.
Outa launched its review application, citing multiple legal and procedural concerns, including:
- Absence of required environmental authorisations and port approvals;
- Lack of confirmed power purchase agreements with Eskom;
- Criminal investigations pending against the Karpowership entities;
- Significant long-term financial risks to the public without adequate regulatory scrutiny.
The case was delayed for nearly two years due to disputes over access to the administrative record.
Outa had demanded a copy of the full record of Nersa’s decisions, with the full reasons for the decisions, as part of the review process. Both Nersa and Karpowership had objected.
Following a court order compelling the production of documents in 2024, the Karpowership entities were subsequently liquidated, and their attorneys withdrew from the matter in June 2025.
Despite the lack of opposition, Outa pushed to ensure the matter was formally adjudicated and made part of the public record through an order of court.
The full record was eventually made available, but parts were blocked from public access.
“This is not just a legal win, it’s a win for public interest litigation,” said Fick. “This case reinforces the principle that even when government acts urgently, the law and due process cannot be ignored.”
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