South Africans seek benefits from clean energy

The grassy greens and browns of South Africa's semi-desert Karoo region are fast becoming dotted with flashes of silver and white, as solar and wind farms spring up across the vast, sun-soaked land in Northern Cape province.

But nearby communities, where unemployment and drug-use are a persistent problem, say that even as profits trickle into their towns, more can be done to distribute fairly the benefits from the renewable energy they believe belongs to them.

"There was excitement when we saw the solar panels being built," said Rose Bailey, a social worker in De Aar, a town of about 24 000 inhabitants between Kimberley and Cape Town.

"We thought it would bring employment and electricity to our homes, but we are still struggling, and we still have power cuts," said Bailey at the charity where she works with abused women and children.

Climate policy experts are looking to South Africa, Africa's biggest carbon emitter, as the poster child for developing nations seeking to shift from fossil fuels to green energy in a way that reduces poverty for all: a so-called just transition.

At November's UN climate summit, rich nations pledged to provide US$8.5 billion in funding to help South Africa move away from coal, the dirtiest planet-heating fossil fuel.

The country remains heavily reliant on coal but already has in place a decade-old programme that procures clean energy from independent power producers (IPPs) to feed into the national grid, while aiming to empower local communities.

To win a 20-year contract from the Department of Energy, private-sector bidders must also meet social criteria, including giving communities a 2.5%-5% stake in the project, with most setting up trusts to channel income where it is most needed.

But South African financial research house Intellidex recently found that IPP share dividends for communities have so far been spent largely on paying back loans to development finance institutions that enabled the trusts to buy their shares in the first place.

The report calls for less onerous repayment terms and new ways to open up opportunities for fundraising and investment.

It also highlights the need for community members to be heard, both within the trusts and IPP management.

Skills gap

De Aar residents said they had noticed changes since the wind and solar farms started up.

"This town was going under about four years ago, shops were empty, no one was spending," said Oliphant. "Today there are jobs, there is economic activity."

Northern Cape province has a 62% unemployment rate, the most recent census data shows.

Ntsikelelo Tshandu, a butcher from the nearby farming hub of Britstown, said the Sibona Ilanga trust had plugged money into his business, connected him to soup kitchens and kept him afloat during the Covid-19 lockdown.

"Today my business can sustain itself," he said, standing by his trailer of cattle fodder, adding he recently bought an old abattoir he hopes to renovate.

But Themsile Msengana, senior manager of corporate services for Emthanjeni municipality, which has a population of 45 000 and covers De Aar, said IPP-related employment had been short-lived.

During construction, about 70% of the 3 000 jobs created went to locals but it was unskilled temporary work, he noted.

Once up and running, the solar and wind farms employ 15-20 local people in cleaning and security, but their specialist workforce comes in mainly from big cities or other countries.

To counter this, community trusts are investing in scholarships to incentivise students to qualify as technicians who can run the green power projects, instead of foreign workers flown in from China or Japan to fill the skills gap. -Fin24/Bloomberg