In conversation with the DoE: challenges implementing community benefits in the RE IPPPP

Louise Tait and Holle Wlokas from the ERC and Sue Soal from CDRA attended a high level meeting with the Department of Energy’s Independent Power Producer (IPP) Unit, which comprises representatives from the Department of Energy and National Treasury, to discuss issues pertaining to the community benefit requirements in the RE IPPPP. Two representatives from GIZ’s SAGEN programme also attended the meeting.

The DoE’s Renewable Energy Independent Procurement Programme (RE IPPPP) includes requirements for independent power producers (IPPs) to make financial contributions towards the local communities in the vicinity of renewable energy projects. The requirements are a great example of pro-poor and inclusive policy design, and offer important developmental opportunities for marginalised communities. The programme is however charting new territory, and as it moves forwards towards implementation, various challenges are arising. Many of these are explored and documented here.

The IPP Unit invited the ERC to this meeting to incorporate wider stakeholder input as they review their RE IPPPP programme design going forward. The DoE’s IPP Unit acknowledged the various difficulties arising in the programme, which they had not originally foreseen. Some of these that were discussed and highlighted by both parties during the meeting included: the 50km radius definition and overlapping projects, labour relations, inadequate engagement with communities, challenges with municipalities, the diverging approaches taken in different projects, the need for wider industry support and capacitation, clarifications and guidelines, monitoring and evaluation, timing and structuring of community engagement, and dividend flows to trust structures. The IPP Unit at DoE are therefore exploring to what extent they can support community processes and outcomes through improved policy design, both for existing approved projects and for bidders in future procurement rounds.

The ERC welcomes the inclusive approach of the DoE that facilitates broader stakeholder inputs into their programme design. The community benefit aspect of the RE IPPPP incorporates a variety of stakeholders, sometimes with varying viewpoints and frames of reference with which they approach the issues and solutions. Understanding and transcending these viewpoints has been a key objective of much of the ERC’s work to date through their on-going research and hosting of multi-stakeholder participatory events for the sector. This has been invaluable to understanding the diverse nature of the challenges and opportunities in fulfilling the RE IPPPPs requirements in respect of local community benefits.

The DoE, whilst committed to doing what they can to improve outcomes, also face limitations in what they can do. As sole procurer in the programme they are restricted in how far they can direct bidders with regards to specific guidelines and recommendations. They therefore stressed that it was necessary for the industry themselves to collectively chart a way forward in this regard. The DoE is however intending to establish a team responsible for overseeing the economic development aspects of the programme and are exploring how such a team can facilitate the implementation of benefit processes.

At the meeting, useful inputs that the ERC could make into the DoE’s deliberations were discussed. It was agreed that ERC would submit detail on the key issues that had been identified in their engagements with the sector. Both parties at the meeting also made a commitment to further regular engagements around these issues, and we look forward to further constructive discussions as the programme progresses.