Questions over R9.5 billion battery tender linked to ex-Eskom COO

Mulilo Energy, the company recently awarded a multi-billion-rand battery storage contract under South Africa’s Independent Power Producer Procurement Programme, has dodged IOL's questions regarding concerns over the bidding process.

IOL previously reported that the contract, which forms part of the government’s efforts to enhance the country’s energy security through battery storage, sparked criticism from the Black Business Council (BBC), the National Union of Mineworkers (NUM), and political parties.

Both the BBC and NUM raised concerns that Mulilo, chaired by Jan Oberholzer, former Eskom Chief Operating Officer, may have had an unfair advantage.

Oberholzer served as Eskom’s COO from 2018 until July 2023, a period marked by challenges for the utility, including financial difficulties and worsening load-shedding.

"Oberholzer's company had an unfair advantage as he had access to privileged information about Eskom's requirements that other bidders did not have (as an insider)," BBC CEO Kganki Matabane said.

Meanwhile, the NUM described the situation as “a clear case of a revolving door—where an individual transitions from a position of immense public influence at a state-owned entity to a private company that benefits directly from policies and initiatives he once championed.”

What we asked

How do you respond to the BBC’s claim that Mr. Oberholzer’s former Eskom role gave Mulilo an unfair advantage?

The NUM says this looks like a “revolving door” between Eskom and private companies. What is your response?

The MK Party has asked for transparency regarding the bidding process. Could you please share how Mulilo ensured fairness and openness?

What due diligence did Mulilo perform on its leadership and potential conflicts of interest before bidding for this government contract?

What Mulilo answered

Mulilo emphasised that the contract was awarded through a government-led process and directed all procurement-related inquiries to the Independent Power Producer Office (IPPO) and the Department of Electricity and Energy for comment.

"We note the media interest following the announcement that Mulilo has been awarded preferred bidder status for four projects under the Battery Energy Storage Independent Power Producer Procurement Programme (BESSIPPPP).

"As this was a Government-led process, we encourage that all procurement-related enquiries should be forwarded to the Independent Power Producer Office (IPPO) and the Department of Electricity and Energy for comment.

"As a South African company deeply committed to our country’s energy transition, Mulilo remains focused on delivering solutions that support energy security, create socio-economic value, and accelerate the shift to a sustainable, low-carbon future."

Minister of Electricity and Energy Kgosientsho Ramokgopa has reportedly defended the awarding of the tender to Mulilo, saying the process was subjected to “rigorous legal, technical, and financial due diligence, consistent with national legislation and the prescripts of the Constitution of the Republic of South Africa, including the objectives of ensuring that public procurement fosters inclusive growth for previously marginalised communities, including women and youth,” the department said, according to Moneyweb.