Energy policy and supply is not only about development. As such, the IPPPP has been designed to go beyond the procurement of energy to also contribute to broader national development objectives, such as jo creation, social upliftment, local industry development and increasing opportunities for economic ownership

The Renewable Energy Independent Power Producer Procurement Programme trusts represent one of the most progressive policy interventions of South Africa’s democratic era. They have the potential to meaningfully build assets for communities that have experienced sustained dispossession and underdevelopment.

The projected dividends from projects already procured under the REIPPPP is estimated to be about R27 billion over the 20-year life of the projects. Between R 2,4 billion R 3.2 billion of this amount will be paid to community trusts

Renewable energy projects have the capacity to generate substantial amounts of money for local communities. Clearly, the expectation that these projects, unlike projects based on other energy sources, should take on complex and onerous responsibility for community development, has introduced unintended consequences. The lack of adequate structures at the local level and of monitoring and evaluation at the national level, along with the inexperience of project developers in this space, has led to further marginalisation of, and division within, already marginalised and vulnerable communities

91 REIPPPP projects have reached financial close……..On average, black local communities own 8% of projects that have reached financial close

Since the launch of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2011, 77 renewable energy utilities have become operational…Communities surrounding the energy utilities stand to benefit significantly from these investments due to a policy framework that requires companies to promote community development beyond the construction and operation of new facilities. But for manifold reasons, these benefits have often failed to materialise, leaving community members frustrated, confused and apathetic.

…private sector companies are taking the (REIPPPP) requirements seriously, but they require support to maximise the developmental benefits of the programme and minimise the risk of unintended consequences that will hamper the success of community benefit initiatives

The REIPPP assigns renewable energy companies with the difficult task of creating local developmental benefits in an effort to reduce the weight of structural and systemic issues of poverty and inequality. Companies, however, lack the capacity and incentive to appropriately engage with issues of developmental planning

For many IPPs, ensuring compliance with (the REIPPPP economic development scorecard) targets is the sole measure of success of their economic development work. They don’t recognise the potential of the trusts to become vehicles for social change

The equity in REIPPP projects held by community trust is usually financed by loans from development finance institutions on terms which are onerous. The result is that during the first seven to eight years, dividends are spent either wholly or mostly on servicing debt, leaving the community trusts largely dormant

The long lag between the establishment of community trusts and the flow of dividend income into these trusts is a major impediment to the effectiveness of these trusts and has resulted in ill-will within communities

The problems facing community trusts are not insurmountable – they can be overcome by a collaborative and innovative approach