Economic prosperity for marginalised communities through renewable energy in South Africa

South Africa’s renew­able ener­gy (RE) pro­cure­ment pol­i­cy is glob­al­ly unique in its empha­sis on pro­vid­ing ben­e­fits for com­mu­ni­ties in the vicin­i­ty of projects par­tic­i­pat­ing in the RE Inde­pen­dent Pow­er Pro­duc­er Pro­cure­ment Pro­gramme (REIPPPP). RE projects are pri­mar­i­ly locat­ed in rur­al com­mu­ni­ties, fre­quent­ly cat­e­gorised as “mar­gin­alised com­mu­ni­ties”. The REIPPPP has cre­at­ed a legal frame­work to incen­tivise IPPs to chan­nel ben­e­fits to com­mu­ni­ties near RE project sites through a range of means, includ­ing local employ­ment quo­tas, com­mu­ni­ty own­er­ship in RE projects, as well as con­tribut­ing a pro­por­tion of their rev­enue towards devel­op­ment spend­ing, known as socio-eco­nom­ic devel­op­ment (SED) and enter­prise devel­op­ment (ED) spend. This study assess­es the SED and ED impacts of renew­able ener­gy deploy­ment in mar­gin­alised com­mu­ni­ties in South Africa. It entails the assess­ment of select­ed socio-eco­nom­ic impacts, realised to date, in three REIPPPP project areas, along with pro­jec­tions and mod­el­ling the assessed impacts (up to 2030 for the medi­um term, and 2050 for the long term) across a range of pow­er sec­tor decar­bon­i­sa­tion scenarios.




Key policy opportunities:

Pol­i­cy oppor­tu­ni­ty 1: By the year 2050, IRP 2018 will have cre­at­ed almost 5,000 jobs through socio-eco­nom­ic and enter­prise devel­op­ment (SED and ED) and enabled 19,000 indi­vid­u­als to ben­e­fit from access to edu­ca­tion-relat­ed pro­grammes. These socio-eco­nom­ic ben­e­fits for mar­gin­alised com­mu­ni­ties could even be increased by an addi­tion­al 100 % and 50 % respec­tive­ly, by scal­ing up the adop­tion of renew­able ener­gy (RE) in line with the more ambi­tious low-car­bon ener­gy pathways.

Pol­i­cy oppor­tu­ni­ty 2: With­out stronger guid­ance, large-scale REIPPPP3 projects may not deliv­er the antic­i­pat­ed lev­el of sig­nif­i­cant ben­e­fits for mar­gin­alised com­mu­ni­ties: The IPP Office should be bet­ter posi­tioned to lead engage­ment with the local and dis­trict munic­i­pal­i­ties that host inde­pen­dent pow­er pro­duc­ers (IPP), to ensure a detailed under­stand­ing of the REIPPPP mech­a­nisms and the intend­ed role of pow­er pro­duc­ers with­in the communities.

Pol­i­cy oppor­tu­ni­ty 3: Pri­or engage­ment of IPPs with the var­i­ous com­mu­ni­ty stake­hold­ers, in pre- and post-project com­mis­sion­ing, forms the basis for renew­able ener­gy projects to deliv­er on their socio-eco­nom­ic promis­es. Cod­i­fy­ing these require­ments by means of a REIPPPP Prac­tice Guide would strength­en the deliv­ery of more direct and mea­sur­able socio-eco­nom­ic and enter­prise-relat­ed ben­e­fits to the host and mar­gin­alised communities.



Year of pub­li­ca­tion: 2019

Edi­tors: Ayo­de­ji Okun­lo­la, David Jacobs, Ntomb­i­futhi Ntuli, Ruan Fourie, Lau­ra Nagel and Sebas­t­ian Hel­gen­berg­er – IASS Pots­dam, CSIR and IET

Tech­ni­cal imple­men­ta­tion: Fumani Mthem­bi, Antho­ny Dane, Holle Wlokas, Louise Tait, Lau­ren Her­manus, Nol­wazi Sokhu­lu, Mbali Maba­so, Tlholo­ge­lo Relela – Knowl­edge Pele, Uni­ver­si­ty of Stel­len­bosch – Cen­tre for Com­plex Sys­tems in Tran­si­tion, and Change Pathways

Sug­gest­ed cita­tion: IASS/CSIR. Eco­nom­ic pros­per­i­ty for mar­gin­alised com­mu­ni­ties through renew­able ener­gy in South Africa. Assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor. Potsdam/Pretoria: IASS/CSIR, 2019.

DOI: 10.2312/iass.2019.010


This study is part of a 2019 series of four stud­ies assess­ing the co-ben­e­fits of decar­bon­is­ing the pow­er sec­tor in South Africa, edit­ed by IASS and CSIR: