Medupi Power Station, located near Lephalale in Limpopo, was conceived in 2007 as part of South Africa's emergency response to the 2008 electricity crisis. It was to be the world's fourth-largest coal-fired power station, producing 4,764MW — enough to power several million homes. The original budget was approximately R80 billion, with completion targeted for 2014. It was finally declared "fully operational" in August 2021 — seven years late — at a cost that Eskom puts at R122-135 billion, though independent analysts estimated R234 billion when capitalised interest is included.
THE HITACHI/CHANCELLOR HOUSE BRIBES: Like Kusile, Medupi's boiler contract was tainted by the Hitachi/Chancellor House scandal. Hitachi Power Africa paid US$6 million in corrupt payments to Chancellor House Holdings — the ANC's investment vehicle — to secure both the Medupi ($2.9B) and Kusile ($2.7B) boiler contracts. The SEC found this constituted foreign bribery and imposed a US$19M settlement. The corruption directly impacted the project: bribes-for-contracts meant quality was secondary to political connections. Medupi's boilers have experienced chronic failure.
THE HYDROGEN EXPLOSION: In August 2021, just as Eskom celebrated Medupi's completion, Unit 4 suffered a catastrophic hydrogen explosion that destroyed 700MW of generation capacity. The explosion was attributed to design and maintenance failures — the product of a project where procurement was driven by corruption rather than competence. Repairing Unit 4 added months of delay and hundreds of millions in costs.
CHRONIC TECHNICAL FAILURES: Every Medupi unit has experienced technical problems. Boiler tube leaks, weld failures, and design deficiencies have been documented across the plant. Independent engineers have attributed these failures in part to the compromised procurement process — when contracts are awarded on the basis of bribes rather than technical merit, quality suffers.
LABOUR UNREST AND DELAYS: The project was plagued by violent labour unrest, with multiple strikes, work stoppages, and even worker deaths. Construction delays compounded costs through capitalised interest on the massive loans (World Bank and others) used to finance the project. Each year of delay added billions to the final cost.
FGD STILL NEEDED: Medupi was built without flue gas desulphurisation (FGD) plants required for environmental compliance. These are estimated to cost an additional R35-40 billion — bringing the true total cost of Medupi potentially above R270 billion. As of 2026, the FGD plants have not been built.
The cost overrun — R55-154 billion depending on calculation method — represents the difference between what South Africa paid and what it should have paid for a competently procured and managed power station. This money was consumed by corruption, mismanagement, delays, and rework.