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South African Court blocks Eskom from signing USD 4.7 bln renewable energy deal

Eskom was due to sign 27 contracts with private sector producers on Tuesday.


Reuters 13 Mar 2018, 11:14 AM South Africa
  • National Union of Metalworkers of South Africa argued that the deals would lead to reduced demand for coal-based power. (Image credits Youtube)

A South African court has blocked state power utility Eskom from signing USD 4.7 billion of renewable energy deals, court documents showed on Tuesday, throwing the fate of the long-delayed projects into doubt.

Eskom, whose coal-fired power stations supply the bulk of South Africa’s electricity needs, was due to sign 27 contracts with private sector producers on Tuesday following last week’s announcement by energy minister Jeff Radebe.

But the National Union of Metalworkers of South Africa, the country’s biggest union, launched an urgent court bid late on Monday arguing the deals would lead to reduced demand for coal-based power, and thus job losses in the coal-producing province of Mpumalanga.

NUMSA, whose court challenge was backed by a civil society group called Transform SA, also argued that renewable electricity costs were higher than coal and so would hit the economy.

“The consequences of all these factors will have dire consequences for the working class and the poor,” NUMSA said in a statement.

Energy ministry spokesmen did not respond to calls for comment.

Radebe said last week delays in signing the projects over the years had “clearly affected” investor confidence. Cash-strapped Eskom has been bedevilled by governance concerns and high turnover among top executives.

If approved, the projects, mostly solar and wind, should add 2,305 MW of green power to the national grid in Africa’s most industrialised economy and create over 61,000 jobs, the government has said.

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