Karpowership, a highly controversial company, is planning to develop power-generation operations off the coast of Maputo. Karpowerships will be only a few kilometres from the shore, and will have a detrimental impact on the city’s people with heavy air pollution and safety risks. Even worse, much of this energy will not even go to Mozambicans, but to South Africa.
The company is a subsidiary of Turkish company Karadeniz, which is embroiled in scandals in several countries, and has been exposed for major corruption, threatening civil society and submitting faulty impact assessments.
Karpowerships are offshore vessels, floating power plants that use gas to produce power. Karpowership has partnered up with EDM (Electricidade de Mozambique), and much of the power generated from the ship in Maputo will go to South Africa, most likely Eskom, the state power electricity provider, which is currently facing a massive corruption disaster and crisis, with rolling blackouts for South Africans. It is also unclear where this gas will be supplied from.
The Constitution of Mozambique recognises that all citizens have the right to a healthy and balanced environment under Article 90, and establishes an obligation on the Government to protect the environment and the human quality of life. The Constitution also obliges the Government, within the framework of the right to a healthy and balanced environment, to ensure a rational use of resources safeguarding the environment capacity to regenerate, ecological stability and rights of the future generations.
The Karpowership will be terrible for the environment of Mozambique, which is already suffering because of the extractive and fossil fuels industries around the country. It runs on the massively-toxic heavy fuel oil (HFO), which is the dirtiest fuel left behind from the process of refining crude oil. HFO is not meant to be used near urban areas, and has been banned by the United Nations because of the high amount of toxic fumes of sulphur dioxide, nitrous oxide and other heavy metals, as well as cancer-causing chemicals it emits into the atmosphere. This will be emitted into the air that is directly breathed by the populations of Maputo and Matola. The Karpowership will also be dumping high amounts of hot water into the Maputo Bay, raising the temperatures to a point that drives away fish and sealife, in turn lowering catches for fishermen and destroying wildlife marine reserves like Inhaca Island which brings international tourists and scientists to Mozambique. Karpowership is already supplying electricity to Mozambique from a ship in Nacala, which has been running on HFO since they began operating in 2018, and will likely do so for the rest of the 10 year period.
A number of civil society organisations in Mozambique are challenging Karpowership’s Environmental Impact Assessment (EIA) for the project. Karpowership opened a period for public consultation in November 2022, when they presented an EIA that was inadequate and with many deficiencies. They claimed, incorrectly, that their project was part of Category A activities which made its EIA requirements more lenient and with less procedures, when in fact, the proposed activity involved stockage and transformation of fossil fuels that make it are part of a Category A+, which in turn requires their EIA to be submitted for an independent peer review. As a Category A+ project, it would be subjected to a stricter control by the authorities as well as by the public.
Karpowership has been trying to operate in neighbouring South Africa for years but has been facing resistance from civil society, while also flouting regulations. Perhaps now, realising that South Africa might be too difficult, they have decided to try Mozambique, where regulations are more soft and institutions are not as independent as in South Africa.
South African civil society stood up to oppose the first round of EIAs. On 31 March 2021, organisation groundWork made a submission to Triplo4, the consultant for Karpowership SA. The submission detailed all the issues with the project, and shared them with the Department of Forestry, Fisheries and the Environment (DFFE) and the Department of Mineral Resources (DMR), which included that:
Contrary to the government’s statements, the cost of Karpowerships is not the cheapest, and the vessels are actually meant for short-term supply, while the 20-year contract will create a lock-in leading to higher tariffs and less affordable and accessible energy
The EIA Scoping and Environmental Feasibility did not refer properly to a Climate Change Impact Assessment, as required by South African and also by Mozambique EIA regulations. They did not consider basic information such as emissions from gas production, gathering, processing, initial transport, and HFO liquefication. These omissions are a major problem, considering that they would show how gas will have an equivalent, or even worse, impact on the climate as coal.
They also used figures from the Intergovernmental Panel on Climate Change (IPCC) report from 2007, when the most recent one at the time gave updated figures showing that methane had between 28-36 times the global warming impact of C02 over a 100-year period. The 2007 report says that this number is much lower, at 21. Furthermore, the mitigation measures for the impacts of GHG emissions from the ships are entirely undeveloped and inadequate
Regarding air quality, Karpowerships are not supposed to be near urban areas, but the location of these vessels so close to the coastline mean that coastal communities would be exposed to the pollution from the vessels anytime the onshore wind is blowing.
The atmospheric impact report section of the EIA was highly flawed – it does not measure toxic emissions from natural gas combustion and natural gas leaks. It also does not consider the serious risk of an explosion which will be totally disastrous for the air and people living nearby.
Half of the jobs of the project will be short-term construction while the long term positions are skilled job that will likely be filled by Turkish crew. Several communities, including different types of fishing communities may be harmed and their livelihoods affected, but the EIA does not consider this.
Public participation was totally inadequate – neither fishing communities for tribal communities were recognised and important persons or even notified about the proposed development and consultation. Many communities who were notified did not receive sufficient information, or could not afford technology to access this information online. In the case of Mozambique, the Prosecuting Authority has the mandate to defend and protect collective and environmental interest and surprisingly did not participate in the consultation.
Furthermore, in South Africa, one of the reasons the government had put out a bid was because of the need for ‘emergency energy’, and planned to sign a 20 -year contract with Karpowership SA. However, groundWork says that this so-called emergency was due to poor decision-making skewed in favour of fossil fuel development, and that “dig a yet deeper hole and put a just transition to a low carbon economy further out of reach.” They added that “Signing a 20-year contract to procure power from Karpowerships is effectively locking in gas for that time, crowding out space for ever-cheaper and more reliable clean energy, and exacerbating the climate crisis”.
These, and other issues in the comments from civil society led to the DFFE refusing Karpowerships SA’s environmental authorisation.. After they amended their EIA based on the government’s refusal, it still was not good enough. In December 2022, more comments were submitted by groundWork, the South Durban Community Environmental Alliance (SDCEA) and the Green Connection supported by legal organisations Centre for Environmental Rights, Biodiversity Law Centre and Natural Justice.
Karpowership SA’s second EIA again failed on all three sites and in 2023, the DFFE suspended a secondary EIA for yet another powership at the port of Ngqura. .
While all of this is going on, a simultaneous process was being undertaken to stop the Karpowership license from another angle. The Organisation Undoing Tax Abuse (OUTA) launched a legal challenge to review South Africa’s National Energy Regulator (NERSA)’s decision to grant Karpowership SA three Independent Power Producer (IPP) generation licences. NERSA had awarded these licenses to Karpowership SA even though the projects had not get been given environmental authorisation by the DFFE, there were no port authority permits or gas pipeline permits, and Karpowership SA had not yet reached financial close despite this being a condition of the Department of Minerals and Resources’ award of Karpowership SA as the preferred bidder in its emergency procurement. This process is still ongoing.
At the end of 2022, CER published a report about the financiers of Karpower – Standard Chartered (United Kingdom), Investec Group (South Africa), Isbank (Turkey) and MCB Group (Mauritius) – who provided Karpowership with a US$ 140 million loan. Following this report, Karpowership tried to intimidate activists by sending them a lawyer’s letter, claiming they had made ‘defamatory statements’, but their claims were unfounded.
As shown above, South Africa is perfect example of Karpowership’s corruption and how they tried to undermine the processes of a country. In an interview in February with Andre de Ruyter, the former CEO of Eskom, he said Karpower had “an extensive legacy of alleged corruption, breaches of contract and abuse”, and that “There is absolutely no justification for concluding a 20-year agreement with a company that can raise the anchor, literally, and sail away with the asset the country has paid for.” Eskom is currently in a major crisis, with the government calling the ‘loadshedding’ a state of disaster.
Now, in Mozambique, The Scoping and Environmental Feasibility Report did not consider the impacts on marine ecology, like the waste discharge and leakage, and dismissed the impact that the vessel will have on the marine environment, as well as the risk of a gas spill. Sao Sebastiao estuary, where the Karpowership will be located, is also surrounded by mangroves. Mangroves have an exceptional ability to capture carbon and serve an additional role in mitigating severe storms, and serve as a habitat for fish and crustaceans. Karpowership and Electricidade de Moçambique (EDM) claimed that the impacts on mangroves will be temporary and due to power transport lines. The EIA regulations in Mozambique do not distinguish between temporary and non-temporary impacts on mangroves and require that all activities with impacts on mangroves to A+ category which requires an independent peer review.
The Scoping and Environmental Feasibility Report also has gaps regarding the qualitative noise impact on megafauna, including the dolphin and mangrove habitats, important birds and communities living around the area and cumulative impacts as the area is closest to a coal terminal port, and many other industries, including a cement factory. In South Africa DFFE’s refusal bore socio-economic and environmental considerations including the EIA’s gaps on qualitative noise impact assessment.
Mozambique has no regulations or standards on noise quality, and this fact makes Mozambique favourable to opportunistic investors, as environmental licence does not take into consideration noise impacts. Although the EIA regulations imposed an assessment of cumulative impacts and air and water quality standards, the absence of an environmental load capacity allowed more and more projects without any consideration of the impacts on the environment and quality of life as a whole. Karpower completely ignored the impacts of one more activity in an environment already under pressure.
Bit this is not the first time that Karpowership parent company, Karadeniz Holdings, which is registered in tax-haven Malta, is embroiled in major corruption controversy. In Lebanon, in 2021, the state’s financial prosecutor ordered two Karpowerships to be impounded following slapping it with a $25 million fine for corruption, after which Karpowership punished the government by shutting down energy supply to the country, leading to power blackouts.
In Mozambique the agreement signed between Karpower and EDM and the information about the financiers are not available to the public. financiers.
In Brazil, in 2022, the courts demanded a suspension of the installation and operations of the four Karpowership plants, due to this failure to submit an EIA, and the damage it would cause to the sensitive ecological Sepetida Bay and fishing communities, as well as fined the company for not meeting deadlines.
Karpowership has behaved badly in so many other countries, and with the lax regulations in Mozambique, it will be even easier for them to create irreversible implications here, for the environment, climate and health of people. Karpowership must be stopped before they can start with this destruction!