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South Africa under fire over energy plan



South Africa has taken emergency steps to sort its crippling energy crisis, with a plan to lease mobile power stations or so-called powerships to dock at its ports.

But the prospective $15bn, 20-year deal with Turkey’s Karpowership — one of the longest of its kind — has been derided by critics as expensive and environmentally unfriendly and a rival energy provider has filed a lawsuit, arguing the tender was rigged in the company’s favour.

President Cyril Ramaphosa’s government announced last month that Karpowership was a preferred bidder for a contract to supply 1,200 megawatts or two-thirds of an emergency procurement with the LNG powerships.

Pretoria launched the emergency procurement in late 2019 after Eskom, the struggling state energy monopoly, was forced to impose its most intense rolling power cuts yet, a legacy of misrule dating back to former president Jacob Zuma and beyond.

“We believe that the process followed was flawed, unlawful and in some instances tainted,” said Aldworth Mbalati, chief executive of DNG Energy, a gas supplier.

Karpowership, which already supplies Lebanon, Indonesia and eight African countries including Sudan, Ghana and Mozambique, has strongly rejected the allegation of impropriety. “As a consortium of local and international investors we have every confidence that the South African courts will deal with this appropriately,” the company said.

South Africa’s department of mineral resources and energy did not respond to a request for comment. Tracey Davies, executive director of Just Share, a campaigner for environmentally responsible investment in South Africa, called the deal “unutterably depressing”. She added: “The inherent contradiction of an emergency contract for 20 years seems to have passed the government by.”

Karpowership will supply the power through a local company that is 49 per cent owned by South African investors. Karpowership’s vessels and other projects will provide power on demand at a price of 1.57 rand ($0.11) per kilowatt hour, while the country seeks other longer-term solutions. All of the projects will have 20-year power purchase agreements.

Prices for the ships’ power will ultimately be tied to global LNG prices in US dollars — a poor outcome for South Africans, according to the opposition Democratic Alliance. “There is little local benefit (such as jobs or capital investment) to leasing these powerships for a 20-year period, and [the local shareholding] appears to be little more than fronting in order to line the pockets of the connected few,” the party said.

The department of mineral resources and energy said the 20-year terms were needed to secure investment. “Without this longer-term certainty . . . prices of these projects could have as much as tripled,” it added.

The government’s argument was “nonsense”, said Liziwe McDaid, a member of Green Connection, a non-profit organisation. “If it’s a land-based power plant, you can argue the 20 years, because they have to build it.”

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The ruling African National Congress has a chequered history with big power procurement deals. More than a decade ago it commissioned twin giant coal plants, the world’s third and fourth biggest, to solve the looming crisis but they are still not finished. Zuma later pursued a $70bn deal for Russian nuclear plants that threatened to bankrupt the public finances until a court struck it down in 2017. “We have a power emergency in South Africa, but it is an entirely self-created emergency,” Davies said.

Environmentalists say the contract locks Africa’s largest polluter into a fossil-reliant future. Karpowership says it wants to help South Africa move away from fossil fuels over time. LNG was “the cleanest way to immediately provide 24/7 electricity and support the transition to renewable energy sources”, said Zeynep Harezi, the group’s managing director.

But South African officials have signalled that they have wider ambitions to kickstart a local gas industry, such as switching the ships to run on gas supplied from discoveries off the country’s shores, even though these are yet to be tapped and global investors are increasingly wary of financing natural gas. 

“It’s like saying ‘why don’t we start a horse-drawn carriage industry’, two years after the first Model T Ford came off the production line,” said Clyde Mallinson, an energy expert.

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Emerging Markets

Ebay to sell South Korea unit for $3.1bn as local rivals target Coupang




Ebay is set to sell its South Korea business to a local consortium for $3.1bn, according to people with knowledge of the matter, as rivals seek to turn up the heat on SoftBank-backed Coupang in the world’s fourth-largest ecommerce market.

The consortium, which consists of South Korea’s biggest bricks-and-mortar retailer E-Mart and internet group Naver, plans to buy an 80 per cent stake in eBay Korea for Won3.5tn ($3.1bn) with the US company retaining the remainder, said the people.

The purchase could help the consortium to overtake fast-growing Coupang, which raised $4.6bn in an initial public offering in New York in March to become the biggest player in South Korea’s highly competitive ecommerce market. Japanese technology group SoftBank is a large investor in Coupang.

Ebay Korea was the country’s third-largest ecommerce company with a 13 per cent market share last year, according to research group Euromonitor. Its three platforms — Gmarket, Auction and G9 — recorded Won20tn in transactions last year, data from Meritz Securities showed.

Euromonitor has forecast that South Korea’s ecommerce market will grow by 11 per cent this year to $116bn. But it is a fragmented market of more than a dozen players, with Coupang and Naver controlling 19 per cent and 14 per cent shares in terms of transaction volume, respectively.

South Korea is one of the world’s largest and fastest-growing ecommerce markets, driven by its tech-savvy population, high-speed internet infrastructure and densely populated environment. Ecommerce accounted for 35.8 per cent of the retail market last year, compared with 28.6 per cent in 2019, Euromonitor data showed.

E-Mart plans to fund the deal with Won3tn of asset-backed loans with the remainder paid by its cash holdings, while Naver will contribute Won100bn, according to an industry official close to the situation.

“Despite the funding structure, E-Mart needs Naver to make up for its weak online networks,” said the official.

Conglomerate Lotte Group and E-Mart were the final bidders for eBay Korea. Both have struggled to catch up with Coupang, which is investing heavily in logistics to boost its delivery times. Coupang almost doubled its revenues last year to $12bn as more consumers shifted to online shopping during the Covid-19 pandemic.

“Both Lotte and E-Mart were eager to take over eBay’s operations but E-Mart offered about Won500bn more,” added the industry official.

Naver is one of Korea’s most popular internet portals and more than 40 per cent of eBay Korea’s customers access it via the former’s search engine.

Shinsegae, E-Mart’s parent company, and Naver partnered in March by swapping stakes in each other worth Won250bn.

Ebay Korea declined to comment. E-Mart said in a regulatory filing that it was in talks with eBay but a sale had not been finalised. Naver said in a separate filing that the deal had not been concluded.

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ByteDance revenues more than doubled in 2020 to $34.3bn




ByteDance increased its revenues 111 per cent last year to $34bn and had 1.9bn monthly users across its apps at the end of the year, said its incoming chief executive Liang Rubo on Thursday, according to people familiar with the matter.

The owner of the short-video apps TikTok and Douyin recorded a surge in users as coronavirus lockdowns across the world left people searching for more entertainment online. Douyin, the Chinese sister app to TikTok, was ByteDance’s largest driver of revenue and has become a destination for shoppers looking to buy products from livestreaming presenters.

Facebook, the world’s biggest social media group, reported 2.85bn monthly users as of March 31.

ByteDance recorded an annual gross profit of $19bn but a net loss of $45bn for the year because of non-cash items including share-based compensation and fair-value changes of its shares, and heavy investment in new businesses, the people said. The company had 110,000 employees at the end of they year.

The financials were first reported by the Wall Street Journal and Chinese media.

Its chief rival in China, Kuaishou, reported a net loss of $15.4bn on $8.5bn in revenue last year — four times less than ByteDance — and 481m monthly users during the period. Kuaishou is trading in Hong Kong at a market capitalisation of HK$801bn ($103bn), while ByteDance has yet to reveal its plans for an initial public offering.

ByteDance raised about $5bn in December at a $180bn valuation, according to people familiar with the matter. The Beijing-based company is the world’s most valuable start-up, according to CB Insights. 

Liang made his first all-hands staff meeting speech on Thursday after he began the transition to chief executive last month, following founder Zhang Yiming’s announcement that he would step down at the end of the year. Zhang said he wanted to focus on innovation and “longer-term initiatives”.

Liang, a ByteDance co-founder who staff regard as Zhang’s loyal right-hand man, was previously head of human resources. Even after a six-month handover period, staff said they expected him to not make big changes and to continue taking direction from Zhang.

As Beijing increases its scrutiny of tech giants, several high-profile founders and chiefs have stepped back this year. Colin Huang stepped down as chair of ecommerce platform Pinduoduo in March, days after Eric Jing resigned as chief of Ant Group.

Liang told employees he was disclosing the financial figures as part of a drive for greater transparency at the company.

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Coronavirus latest: Royal Caribbean delays inaugural sailing of ship due to Covid cases




Monique Roffey in London with a poster of her novel ‘The Mermaid of Black Conch’
Monique Roffey in London with a poster of her novel ‘The Mermaid of Black Conch’, which is published in paperback this month by Vintage © Monique Roffey

In April 2020, as coronavirus spread around the world, Monique Roffey published her seventh book.

She went with UK-based Peepal Tree Press, a small Caribbean-focused independent company, to publish The Mermaid of Black Conch after the majors rejected her fantastical tale of a mermaid from another era.

“Indie published me in the eye of the storm,” Roffey says. “I did everything I could to get it noticed.”

The Trinidadian-born author crowdfunded £4,500 for a publicist for her novel but as the healthcare crisis took hold she feared her mermaid tale would slide by unnoticed.

She was struggling to pay the rent while the Covid-19 crisis cancelled book tours and festivals.

“Covid was potentially disastrous for my book,” she says. “It was in danger of falling into the Covid chasm.”

But then the lyrical tale of loneliness, love and otherness caught the attention of the literary world and judges applauded it. In January, the novel won the prestigious £30,000 Costa book award, with judges calling it “extraordinary”, “captivating” and “full of mythic energy and unforgettable characters”.

And, bingo, suddenly everyone wanted to read about the mermaid Aycayia, says Roffey, who (full disclosure) attended the same school in the outskirts of Port-of-Spain as I did. 

The story has sold about 60,000 copies in print and online and this month it is published in paperback format by Vintage. For two consecutive weeks this year the novel topped The Times bestseller list. Film rights could well be next.

“Against all the odds, I have done well during Covid,” Roffey says from her home in London. “In 20 years of writing, with many ups and downs, I have seen nothing quite like this.”

Her novel of fantasy and folklore tapped into a desire for reading and imagination during the dark days of coronavirus-induced lockdowns. Roffey joined many authors pivoting online with book launches and literary festivals, which meant she gained global readers.

“In 2020, the nation turned to books for comfort, escapism and relaxation,” says the Publishers Association, the UK’s trade organisation that serves book and journal publishers. “Reading triumphed, with adults and children alike reading more during lockdown than before.”

Income from fiction rose 16 per cent last year to £688m, while the total for consumer publications rose 7 per cent in the UK to £2.1bn, the UK trade body says. 

“Basically a book, which was roundly ignored, rejected, published in the first Covid wave and that nobody registered,” was relaunched, Roffey says.

From nobody wanting the book, suddenly billboards of its cover are cropping up around town, she adds.

This is the sixth article in a series for the blog that explores the effects of the pandemic on people and businesses around the world

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