Eskom and Framatome in Arbitration Over Koeberg Steam Generator Project

22 July 2025

Eskom has issued a statement clarifying that it's currently in arbitration with Framatome, the contractor responsible for the Steam Generator Replacement Project at Koeberg Nuclear Power Station, over two contractual disputes that have been ongoing since 2022.

Dispute Resolution Process Underway

According to Eskom, the disputes with Framatome were first adjudicated between December 2022 and February 2023. Dissatisfied with the adjudicator's decisions, Eskom escalated the matters to arbitration in accordance with their contractual agreement. The arbitration proceedings took place from June to July 2025, with a final decision expected in the last quarter of Eskom's financial year.

The power utility emphasized that recent media reports appear to have confused separate legal processes, leading to misconceptions about the nature and status of these disputes.

No Penalties or Fines Imposed

Eskom has clarified that no new payments are currently due, and all actions taken have followed proper legal and contractual procedures. The utility stated that while it disagreed with the adjudicator's initial decisions, it complied with requirements to implement the outcome and made interim payments by March 2024 as part of standard contract processes—not as penalties or fines.

"All payments had been made by March 2024 as part of standard contract processes—not as penalties or fines," Eskom explained in the statement.

Parallel Court Case

In a parallel legal process, Eskom approached the Cape High Court in March 2023 to have the adjudicator's decisions set aside, citing procedural irregularities. The court only delivered its judgment on 17 July 2025—over a year later than expected. Eskom is currently reviewing this judgment to determine its next steps.

Koeberg Steam Generator Replacement Completed

Despite the ongoing disputes, Eskom confirmed that the technical work of replacing the steam generators on Koeberg Unit 2 has been completed. This represents a significant milestone for the power station and South Africa's energy security.

"This is a major milestone that contributes to the safe and extended operation of the power station, helping to ensure energy security for the country," the utility stated.

Outlook

The completion of the steam generator replacement at Koeberg Unit 2 is an important development for South Africa's baseload power capacity. Koeberg remains the country's only nuclear power station and provides approximately 5% of the national electricity supply.

While the contractual disputes with Framatome continue through legal channels, the successful technical completion of the project suggests that Koeberg's life extension program remains on track. This is significant as the station approaches the end of its original design life.

The arbitration outcome expected later this year will determine financial responsibilities between the parties but appears unlikely to affect the operational status of the newly upgraded unit.

Key Terms Explained

• Steam Generator Replacement Project: A critical maintenance and upgrade initiative to replace the large heat exchangers in nuclear power plants that convert water into steam using heat from the reactor. This project is essential for extending Koeberg's operational lifespan.
• Framatome: A French multinational company specializing in nuclear reactor design, maintenance and servicing. They are the primary contractor for the steam generator replacement at Koeberg.
• Adjudication: An interim dispute resolution process where an independent third party makes a decision that is temporarily binding until a final resolution through arbitration or court proceedings.
• Arbitration: A formal dispute resolution process outside of courts where an arbitrator or panel makes a binding decision after hearing evidence from both parties.