13 Mar 2015
Face-off between two policies
A LAND claim brought against South Africa’s largest sugar farmer threatens to stop a R1.1 billion renewable energy project that will produce electricity by burning leftover cane leaves and tops.
Charl Senekal Suiker Trust, which has 5 000 hectares of irrigated cane land and is a grower for Tongaat Hulett, is part of a group that plans to build a 16.5 megawatt biomass facility in KwaZulu-Natal, according to a presentation on the National Energy Regulator of SA’s website.
Talks to settle claims by four communities bordering part of his farm would take place today, Charl Senekal, the owner, said on Wednesday.
The government is promoting agriculture and providing access to land as part of its redistribution policies. At the same time, the country is turning to renewable energy as it struggles to meet power demand after failing to invest in generation even as the government expanded supply to millions of households.
“The whole project can collapse if they don’t accept our offer,” Senekal said, declining to give details because they were private. “We’ve made a very reasonable proposal to the government and we hope that this will be successful. I am sure it will be accepted. It’s a great project.”
Work on the plant in Mkuze was scheduled to start in August if all the communities agreed to the offer, with the first electricity to be produced 22 months later, Senekal said. It might create about 400 jobs, and the project would be able to repay its debt in eight years, he said. All four of the community groups needed to support the plan for it to go ahead, he said.
The development should continue regardless of the outcome of the claim, Dumisani Myeni, the chairman of Silwane Trust, established to handle the claims, said from Mkuze. Community groups would be open to leasing the land should the claim succeed. The groups include the Myeni, Ngwenya and Zulu tribes.
“Most of the community doesn’t have power,” Myeni said. “The project will help. Senekal will just need to be a bit flexible. We definitely want to work with him and any developers who come here. We won’t chase anyone away from the land, we just want partnerships. We will reach agreements and work with them.”
A claim against the land was dropped in November 2010 after studies commissioned by Senekal found the area had been occupied by white people since 1880, the Beeld newspaper reported. The land claims office in Pietermaritzburg did not immediately respond to emailed requests for comment it said on Tuesday would take two weeks to be processed.
South Africa had raised R140bn from private investors for 3 900MW of power as part of a renewable energy programme, President Jacob Zuma said on February 13.
Eskom has instituted rolling power cuts since November, curbing production.
Eskom had suspended four executives while the government started an inquiry into the business, chairman Zola Tsotsi said yesterday. There was a “very high probability” of blackouts yesterday evening, the utility said.
Senekal’s trust will own 30 percent of the project, Building Energy Development Africa 3 SRL, a technical partner, a 51 percent stake, and local communities 2.5 percent, according to the presentation to regulators, dated February 2014. H1 Capital, a group of black investors, will hold the balance. The project will be 60 percent funded by debt and 40 percent equity.
Senekal, whose farms produce about 360 000 tons of sugar a year, said: “It’s in the interests of the area, the province and the country that this power plant come off the ground.”