OPINION | Community Ownership – deepening our understanding of the challenges to community participation in SA’s Just Energy Transition?
Community trusts have the potential to transform South Africa’s Just Energy Transition, however structural and financial barriers often limit their impact. Read more about our current initiatives to support the ecosystem.
If strategically leveraged, community trusts can promote the meaningful participation of communities in the transition to renewable energy. As an industry, we have our work cut out to realise this potential on the path towards justice, write Yumnaa Firfirey, Holle Wlokas, Masechaba Mabilu and Avela Pamla.
As the energy transition progresses, community ownership should be placed at the heart of just energy policy and practice.
Community Trusts and the Reality of Ownership in Renewable Energy
Over the past three decades, community trusts in South Africa have been established to promote inclusive development across mining, tourism, conservation, land reform, and renewable energy. When structured effectively, these trusts can enable meaningful community participation in the energy transition while also driving investments into other local development priorities.
The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) mandates community shareholding in power projects, through the legal entities of community trusts, with shareholding currently at 8% on average. However, with the financial structuring of these trusts largely determined for communities rather than with them, these structures have often failed to translate ownership into tangible benefits. True community ownership is not just about holding shares; it is about communities having a sense of belonging, influence over fund management, and a stake in benefit-sharing mechanisms—such as job creation and procurement opportunities—ultimately shaping their socio-economic advancement.
The Mechanics of Community Trusts
During the business development stage, critical financial decisions are made impacting on how the shareholder loan will be repaid and funds remaining for community development programmes. By the time these financial realities become evident—often only once the project reaches the operational phase—community expectations of ownership and benefit-sharing have already been set, along with frustration and disillusionment that take root, when expectations of financial benefit quickly collide with the structured repayment reality. It is at this stage that Social Performance practitioners are left to manage the fallout
Governance structures further widen this gap. While independent trustees, often external professionals, oversee trust decision-making, community trustees—if present—may have limited influence. The focus remains on compliance and expediency rather than fostering community participation in decision-making. In reality, true ownership extends beyond shareholding; it requires a governance approach that respects and incorporates community voices in planning, co-creation, and socio-economic development.
For community ownership to be more than a symbolic gesture, decision-making must be inclusive from the outset. It is not just about reaching the destination of ownership—it is about ensuring that communities are part of the journey, with the power to shape their own development in meaningful ways.
The Trust Matters Project
Fortunately, the Industrial Development Corporation (IDC) – which has provided equity finance for a significant number of community trusts – has supported the Trust Matters project. This initiative has explored possibilities over the past 2 years for how trusts can be capacitated to realise the ambitious expectations related to the spirit of community ownership. Trust Matters has been conceptualised and implemented by INSPIRE, an NPC established to focus on improving social performance in the renewable energy industry through enhanced learning, leadership, innovation and partnership.
In addition to the capacity building of trustees, INSPIRE’s Trust Matters project has created platforms where community trusts can connect, learn, and collaborate to maximise the benefits of renewable energy projects for their communities – all in support of mobilising community leadership and driving developmental impact.
The Trust Maturity Framework
Thanks to the insights gained through several engagements that Inspire hosted for this project, The Trust Maturity Framework has been developed. This framework serves as a tool for understanding the various dimensions of trust support. The model (illustrated below) is a matrix of the ecosystem of role players involved in trust activities and the factors affecting the efficacy of trusts.
We have found that while regulatory factors and governance, operations and processes are critically important, this would not shift the needle on host community prosperity unless more serious capacity and empowerment issues are addressed at community level and, even more importantly, the current shared-benefit paradigm is shifted at industry level.
Below are key outcomes of the workshops and engagements held over the past 2 years, discussed under the TMF factors of community trust efficacy.
Governance
The key governance challenges facing community trusts is the lack of community representation on trust boards. Many are managed by independent trustees, raising concerns about legitimacy and accountability. Another issue is the limited engagement between trustees and Independent Power Producer (IPP) boards, restricting community influence over corporate decisions that impact them.
Additionally, it was found that the provision of standardised governance processes and regulatory frameworks would positively and cost-effectively impact trust operations.
Capacity
Many community trusts face financial constraints and have limited guidance towards refinancing options. Trusts also need structured support with and training in financial management – payments, record-keeping, long-term fund management and strategic planning – as inadequate administration affects programme delivery and long term financial viability. Among community members, at times limited financial literacy leads to misconceptions about fund allocation and returns, which could be addressed through improved financial education.
Given the demands of trust governance, many trustees require not only technical training but also emotional and practical support to manage their responsibilities effectively. Added to this is the reality of many community members and trustees often unknowingly struggling with the effects of South Africa’s difficult past. In our work we have found that by discussing woundedness in our engagements, such as our learning events, we can approach this challenging work with a trauma-informed lens.
Vision & Strategy
A major challenge for many trusts is the absence of a clear strategic plan. While some trustees develop these independently, a more inclusive, yet elusive, approach of engaging communities in this process, would ensure alignment with local needs and full community support for trust interventions.
Poor engagement between trusts and local communities often results in misaligned expectations and inefficiencies. Encouraging integration into local community-based organisation (CBO) decision-making processes would strengthen collaboration. Furthermore, strengthening partnerships among trusts, CBOs, service providers, and IPPs can further improve impact.
Impactful Delivery
With governance, capacity and strategic issues weighing down community trusts, it is no surprise that they are struggling to address the aspects identified under impactful delivery. This includes: ensuring that projects conceptualised are aligned with the trust strategy; or that there is robust structuring of socio-economic development programmes that are also most cost-effective; monitoring and evaluation frameworks and indicators linked to project implementation; and a capacitation of local actors to play an increasingly active, meaning and financially beneficial role in project delivery.
Inspire, through the Trust Matters project, has responded to these challenges and limitations in alignment with the Trust Maturity Framework.
Governance and community mandate
The support to community trustees as a voice of the community is the first step towards an evolution of trusts’ engagement of communities. Following this, elevating the importance of community members as a group and providing support to them is critical to unblocking a foundational constraint that shackles the ability of trusts to ensure community empowerment and development. This maturation, rather than the regulatory dotting I’s and crossing T’s, is a prerequisite to moving closer to the spirit intended in the initial conceptualisation of community trusts as an entity of transforming our nation and aligns with the broader justice goals of the energy transition.
Comprehensive strategic planning
One step beyond including the community in strategic planning is to develop a long term plan in line with the Trust Maturity Framework, integrating programme strategy, financial health, capacity building, and an optimal operating model into the strategy. At least one group of community trusts have successfully embarked on this avenue during the Trust Matters project.
Targeting interventions towards maximising local impact
Strategic partnerships are crucial for effective project implementation as no local development partner, including trusts, can undertake the socio-economic development challenges on their own. Ecosystem mapping and stakeholder identification can help trusts collaborate more effectively and make informed funding decisions. Increasing the number of community trusts’ involvement in the Inspire Community of Practice programme with the Inland 5 IPPs and one of the their trusts is an active endeavour by Inspire to support the willingness to collaborate by the industry.
Performance indicators should be developed in consultation with communities to ensure they reflect locally defined success rather than relying solely on external benchmarks. Building local capacity by training community-based administrators and implementation agents is essential for long-term sustainability. Transferring skills from external players to local actors will ensure that the work of trusts remains deeply rooted in community expertise and continues to have a meaningful impact.
These Insights Culminated in the Learning Event on Community Trusts
INSPIRE’s INSPIREd Community Trusts Learning Event took place on 11-12 February 2025, at the IDC Auditorium in Sandton, and provided an opportunity for policymakers, trustees, community voices, and other stakeholders active in the trust eco-system to come together to address these maturation challenges. With projects like Trust Matters, INSPIRE is already spearheading efforts to guide trusts through their maturation journey. Still, systemic recalibration and increased policy focus are essential for fostering deeper and more holistic responsiveness to strive for the ambitious yet achievable community ownership ideal.
Just Energy Transition
For the Just Energy Transition to truly live up to its name and for the intended spirit of community ownership to be realised, the maturity of community trusts is paramount. Trusts must evolve from compliance-driven entities to dynamic vehicles of community empowerment. As the energy transition progresses, community ownership should not remain a peripheral issue—it must be placed at the heart of just energy policy and practice.
Yumnaa Firfirey is Managing Director at Towards Uhuru; Masechaba Mabilu is Co-founder and partner at Forethought Africa. They are both senior partners to INSPIRE; Holle Wlokas is Managing Director and Avela Pamla Project Officer at INSPIRE. INSPIRE is an non-profit established specifically to drive the full potential of social performance in REIPPPP. INSPIRE has been supported by the IDC to capacitate community trusts in REIPPPP by mobilising community leadership to drive developmental impact.
