The South African Department of Energy, is investing more than R40bn of private investment in renewable energy for the Financial Close of the second phase of REIPPP (Renewable Energy Independent Power Producer Procurement Programme).
Also, this programme is an initiative of the DOE.
And the term Financial Close may sound like it relates to the corridors of high finance, but it also signals a change to the lives of thousands of people in SA’s poorest rural areas.
According to the DOE, “After Financial Close, which took place on Thursday (9 May), construction of seven wind farms will commence in remote rural areas of the Western, Northern and Eastern Cape Provinces of South Africa over the next two years.
Further noted is that the DOE has mandated wind farm operators to invest 2.1% of gross revenue in the economic and enterprise development of communities in a 50km radius of the wind farms. “Over the 20 year operating period of a wind farm, this investment will be used for much-needed development like medical care facilities, schools, small enterprise facilities and sports facilities.”
In addition, communities are expected to own at least a 2.5% equity stake in the projects, usually in the form of community trusts. Many projects are offering communities a substantially higher stake. The trustees of these community trusts would decide where the dividends from the operating wind farm will be invested.
“Farmers on whose lands the wind turbines are sited, and who lease land to the wind farm operators, will also be paid a royalty, which could help tide their sector over poor harvests.”
The overall impact could be a lessening of tensions over wages and, over time, social development and improved living conditions in the agricultural sector.
Another stakeholder in the programme is the Communities For Wind Energy. This is a voluntary association of communities identified as beneficiaries under existing and planned wind farm projects. It is also aimed at serving as a platform for community support and networking, building collaborative relationship between communities and project owners, as well as a lobbying Government and other institutions on matters related to socio-economic development of communities affected by wind farms developments.
CFWE is a non-political and non-profit organisation and is currently made up of a five-member governing body – men and women who are community leaders in their own right, who are keen on making a contribution and a difference in the community-based renewable energy and development space. It seeks to be the voice of communities in the REIPPPP, which some developers have rightly noted that it is absent.
Moreover, the association intends to work in harmony with all stakeholders including: wind farm owners, local residents, community trusts set up for downstream beneficiation, as well as all spheres of government in order to realise the targets set for the Independent Power Producers as well as the socio-economic development plans. It is envisaged that the association will bridge the divide between the communities, government and the wind farm owners, and thus serve as a networking platform for all relevant communities.
Their interest, in accordance with the normative framework provided by the Local Government White Paper, is to strengthen the developmental role, capacity and functioning of local government thus ensuring improved levels of service delivery to affected communities.
“The association’s philosophy is influenced by our deep passion and appreciation for the role that renewable energy projects are set to play in addressing the imbalances of the past and advancing the principles of a democratic government in South Africa. It is driven by a strong desire to see this invaluable instrument of civil society being sharpened to effectively deliver long lasting local economic development in wind farm areas.”
“The process facilitators have a combined 20 years of municipal and community engagement experience coupled with 8 years of consulting experience ranging from project management, policy formulation, strategy development, stakeholder management, etc.”