By Matebe Chisiza-Asukile, Social Investment Specialist and Team Lead, and Cebisa Zondo, Social Investment Analyst, Tshikululu Social Investments
Building economically resilient communities
At times, South Africa’s Just Energy Transition (JET) is narrowly framed as a transition from coal to clean energy generation. We recognise the importance of protecting the workers and communities that have historically been dependent on the coal industry but overlook a significant opportunity. What is often missed is that the systemic nature of the JET means that it has the potential to create more economically resilient communities, ensuring transformation.
Whole-place transformation relies on an integrated community-building process that creates balanced public and private participation through direct and meaningful stakeholder collaboration. This collaboration aims to create conditions that enable long-term local development and self-sufficiency. The JET’s core principles already provide a firm foundation for whole-place transformation: equity, economic diversification, inclusivity, and, most importantly, sustainability. A just and equitable transition to cleaner energy must include local communities to ensure economic and environmental sustainability. Whole-place transformation in the JET context also requires locally owned and locally implemented initiatives that meaningfully contribute to livelihoods and the broader economy. For philanthropy, corporate funders and the broader development sector, this means going beyond surface-level interventions. It means intentionally ensuring that interventions build local agency, capacity and resilience.
The symbiotic relationship between the JET and whole-place transformation
The JET’s multi-dimensional, systemic nature means it cannot be separated from whole-place transformation. The JET can catalyse whole-place transformation through the introduction of new industries and economic opportunities. In turn, whole-place transformation is a critical enabler of the JET and requires funders, communities and other stakeholders to view the JET beyond energy infrastructure and commercially viable businesses. Enabling activities and opportunities like institutional capacity development, entrepreneurship and enterprise support, and skills development are critical. Without them, the transition runs the risk of being exclusive and inequitable.
As the energy transition continues, new green industries and infrastructure demands will require significant investments to ensure continued access to sustainable livelihood opportunities. Critically, these opportunities should not focus only on those immediately affected by the decommissioning of mines and power plants. They should also include individuals in adjacent industries and surrounding communities. When the scope of interventions is too narrow and focused on a small group of people, it disregards the far-reaching nature of the JET. This positions skills development as a reaction to job losses and not as a critical change lever to facilitate broader economic development and inclusion.
Eskom’s decommissioning of the Komati power plant is an example of this. A review of the decommissioning process found that the scope of initial efforts was too narrow. They focused on mitigating job losses for employees, and engagements with the community were not sufficiently consultative or inclusive.[1] Subsequent efforts in the area have prioritised demand-led skilling, moving away from standardised training that is decoupled from real opportunities and community assets. Demand-led skilling starts by identifying real economic opportunities in a specific context, and then building the skills needed to access those opportunities. Co-creation has been a core part of this approach. Participants in the programme identified local challenges and opportunities and have developed solutions that respond to them. These ideas were tested for feasibility and inclusivity across gender and age groups, and participants were provided with business development and technical support to implement them.
[1] https://www.justsaportal.org.za/resources/early-lessons-and-recommendations-from-komatis-decommissioning-and-repurposing-project
Local institutions and organisations as enablers of whole-place transformation
Local structures are at the centre of whole-place transformation as they are responsible for safeguarding any investments made in the community. The need to invest in and strengthen local institutions extends to municipalities, traditional leadership, community-based organisations (CBOs) and small, micro and medium-sized enterprises (SMMEs).
The Royal Bafokeng Nation presents an example of how strong local institutions, governance and resource ownership enable active participation in the JET. The Bafokeng have, over decades, combined traditional leadership structures with corporate governance and investment strategy to achieve sovereignty over mineral wealth. This has positioned them to meaningfully benefit from the JET. They have introduced community-owned energy projects, shifting the community’s focus from energy access to energy ownership.[1] The Royal Bafokeng example is an outlier compared to other regions and communities dependent on mining and minerals, but it reflects the importance of long-term development that is locally led and aligned with local governance processes and structures.
In Tshikululu’s experience with JET funding applications, local community organisations like municipalities, CBOs and SMMEs have not applied for grant funding at the same rate as larger organisations and businesses which are often not based in the community. When they do apply, they often have significant governance and institutional gaps that make them ineligible for funding.
It’s important that funders understand this dynamic and prioritise local capacity development. This can be done in several ways. Pre-funding technical support can better equip local organisations to access funding. Alongside this, strengthening local capacity through co-implementation can be specified as a condition of funding issued to organisations not based in the community. Standalone capacity strengthening initiatives targeting governance bodies, CBOs or SMMEs are also a valuable investment to ensure that local communities are in a stronger position to benefit sustainably from the JET.
[1] https://enablinginnovation.africa/from-energy-poverty-to-energy-ownership-in-mining-communities/
The role of philanthropy and corporate social investment
Funding for energy generation and infrastructure elements of the JET is often accessed through traditional commercial financing avenues. Philanthropic and corporate grant funding is, however, often better placed to finance other activities that position JET as an enabler for whole-place transformation.
As the energy transition progresses, there are a few takeaways that philanthropy, corporate and other grant funders should consider if they want to contribute to whole-place transformation through the JET:
- Reframe your understanding of the JET beyond funding renewable energy projects: Contributing to the JET is not limited to grant funders who focus specifically on energy and climate-related social investments. JET-aligned interventions include several other focus areas, including institutional strengthening, community involvement and development, skills development and livelihoods. These areas are already part of many social investment strategies and provide an opportunity for all grant funders to participate in advancing the energy transition.
- Go beyond once-off community engagement: Whole-place transformation must be led by those who live in, work in, and understand the community. This means identifying legitimate community structures and understanding who they represent (and who is not sufficiently represented). It also means involving them in co-designing the intervention and establishing forums for inclusive decision-making.
- Leverage existing community assets: The benefit of meaningful community engagement is that it makes it easier to identify and utilise community assets like existing infrastructure, local businesses, or organisations. Integrating community assets into the design and implementation of a JET intervention enables local ownership and the development of local capacity and agency in a more organic and sustainable manner.
An opportunity for justice
The JET represents a fundamental transformation of South Africa’s economy. If not carefully managed, these new industries and the mining of critical minerals used for renewable energy and electric vehicles, for example, could replicate patterns of economic exclusion and dependency seen in other extractive industries. As such, any JET-aligned intervention must actively avoid the dependency trap associated with extractive industries.
Every funder’s involvement in the transition must be anchored in the pursuit of justice. Beyond minimising negative impacts on communities, how they are consulted and involved in the transition must be procedurally just and have due consideration for local decision-making customs and structures. This is what gives an initiative social legitimacy in a community and encourages local ownership.
A narrow framing of the JET as simply moving away from coal to clean energy is a missed opportunity. Funders should explore its potential for whole-place transformation and how to unlock this potential to ensure lasting benefits for communities. Viewing the JET as more complex than energy generation expands avenues for philanthropists and other grant funders to catalyse an inclusive transition that creates a more just and equitable society