Power and local trusts
COMMUNITY ownership has become a hotly contested issue in the renewable energy sector. The Renewable Energy Independent Power Producer Procurement Programme requires all power plants to be owned, in part, by local communities.
For the purposes of the programme, communities are defined as being black people living within a 50km radius of a power plant.
Community trusts, as the vehicle through which community ownership is achieved, have morphed from a self-evident value generator into a controversial question mark. The community trust structure has been abused to avoid partnering with black businesses in the renewable energy sector and there is a delusion that communities comprise people who are noble and altruistic. Both of these issues have led to two differently motivated lobbies against community ownership.
There has been a trend to use community trusts as complete substitutes for black businesses in the ownership structures of renewable energy projects. Viewed generously, one can argue that those who have partnered solely with community trusts have done so because the tendering process rewards this. The more black the project, the higher the black economic empowerment score.
Viewed more cynically, the decision to partner solely with a community trust as a foreign entity implies there is no value to be derived from local entities. Because community trusts are merely paper structures at the point of project origination, partnering with one is equivalent to negotiating with yourself. There are no people on the other end, no cultural barriers to overcome and no tough negotiations to be had.
It is easy to see why many have spoken up against community trusts being the sole representatives of black ownership in procurement programme projects. Effectively, they result in projects being 100% foreign owned and, if permitted to continue substituting actual businesses, they deny the emergence of a genuine local energy industry.
The other lobby group is possibly more problematic. This group, disappointed to discover that poor black people are not a passive mass, epitomises the saviour complex gone wrong.
These people are shocked to discover contestation and power struggles in poor communities. Their realisation that the poor exist within complex socioeconomic and political contexts, and that they are not willing to treat investors as their saviours and that the companies’ existence requires justification, results in a different kind of resentment.
We hear that "communities are not to be trusted", "they are too difficult to work with", "they don’t add value" and "they are captured by local politicians". So goes the case against community ownership.
What gets lost in all the noise? The actual point of community trusts and the reason for their continued existence.
Community trusts are investment vehicles. They are supposed to incentivise people to protect the assets located in their communities with the promise of long-term dividends. They are also an opportunity for wealth creation for groups that do not have access to the economy.
As investment vehicles, the trusts have the ability to generate cash for community development activities into perpetuity. Who then, understanding the need for income generation in poor black communities, would lobby against this objective?
Unfortunately, the obsession with how trusts will use and/or misuse their income has taken the focus away from their fundamental reason for existence. This conflation of issues must be guarded against. Frankly, how best to govern the wealth distribution efforts of community trusts is a nice problem to have.
Most tragically, this debate is one that excludes the communities affected by the outcome. Perhaps it’s just another day in the land of deferred dreams?
• Mthembi is the managing director of Knowledge Pele, a development advisory and implementation firm. She writes in her personal capacity