Karpowership Controversy: Unveiling the Alleged R218-billion 'State Capture on steroids'

November 2022 marked a dramatic turn in the R218-billion deal involving Karpowership SA, a joint venture between Turkish company Karadeniz, and its black empowerment partners Powergroup SA. With the significant deal resting on shaky ground, Karadeniz’s bold decision to sever ties with Powergroup put everything at risk.

Believed to be the solution to their conundrum, businesswoman Anna Mokgokong was expected to facilitate Karpowership's desperate quest for government approvals. However, recently unveiled court proceedings tell a rather different tale, with allegations of an undisclosed deal between Karadeniz and Mokgokong's BHI Energy, which Powergroup’s advocate, Tembeka Ngcukaitobi, described as a confrontation of "State Capture on steroids".

Capturing the majority contracts from the Risk Mitigation Independent Power Producer Procurement Programme (RMI4P), Karpowership SA was all set to provide on-demand power to Eskom for two decades - a contract estimated to be valued at R218-billion. However, internal disputes and clashes have troubled the partnership.

Johannesburg's High Court saw a tense scene as Powergroup pleaded for reinstatement of its 49% stake in the Karpowership deal. Although Powergroup lost the application, it succeeded in unearthing the alleged secret agreement between Mokgokong and Karadeniz.

Despite these allegations, Karpowership, originally a joint venture with Powergroup, maintained that the acquisition of Powergroup's 49% stake by BHI Energy was all above-board. However, the deal's specifics around Mokgokong delivering three key elements: funding, a stake in a new liquified natural gas (LNG) terminal, and assistance in securing the outstanding permits Karpowership needed from the government, has raised eyebrows and prompted further investigation.

As the chair of Seriti Resources and owner of the Community Investment Holdings, Mokgokong refuted all allegations, labelling them as "false, defamatory and calculated to cause embarrassment". She expressed strong denial and rejection of the 'false narrative' created by Powergroup.

However, an in-depth study of the details suggests Mokgokong's beneficiary role in some questionable decisions, facilitating energy minister Gwede Mantashe's dream of making the Eastern Cape the "gas capital of the country." While the charges on all parties involved are yet to be confirmed, the Karpowership controversy has certainly put a spotlight on South Africa's power industry and its plausible ties with suspect deals.