HomeAnalysisRural green economies a winning ESG formula

Rural green economies a winning ESG formula

THE renewable energy industry requires a certain level of commitment by local and international investors in collaboration with public institutions for it to thrive. In this regard, I will share an interesting approach to sustainable development in line with the provision of power or electricity to marginalised groups in the rural areas through a green economy-focused strategy.

The United Nations Environment Programme (UNEP) defines the green economy as “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. It is a low carbon, resource-efficient, and socially inclusive”.

Painting a picture, the green economy is a functional system powered by low carbon emission infrastructure, which allows for growth in employment and income to be driven by public and private investments. This ecosystem sensitive model allows for enhanced resource efficiency, reduced pollution, and participation of all groups of the society in economic growth and sustenance.

China is regarded as a success story for the creation of green rural economies, which was made possible by the Renewable Energy Law passed in 2005 allowing for the creation of 1,5 million jobs by the end of 2009. As recorded by the United Nations Environmental Programme, China’s output in this industry is estimated at US$17 billion.

Kenya is also regarded as a success story in the social and environmental aspects of the renewable energy policy-led development. The Feed-in tariff policy instructs utility authorities controlling the national grid to prioritise the purchase of electricity from renewable sources at an incentivised tariff. Apart from encouraging investments, this has also led to poverty reduction through rural employment as well as enhanced local development.

Some of our corporates locally are failing to adopt sustainability strategies due to the nature of our supply chains. Let us face it, it is difficult and almost next to impossible to proclaim that sustainability has been achieved by a certain company when some of its suppliers are still utilising out-dated and unsustainable methods in their operations.

Supporting the development of rural green economies will also fix some of these issues. For example, curing tobacco has been reported to be contributing immensely to the deforestation statistics in the country.

Farmers (some of whom are out-growers for big corporates) need firewood to successfully carry out this critical process which determines the price and grade fetched by the crop on the market.

However, the adoption of mini solar grids that can be used to power more technologically advanced tobacco curing systems is a potential solution. It will help reduce deforestation, greenhouse gas emissions from burning fossil fuels, the risk of burning down barns together with the gold leaf, which currently exists due to old-school infrastructures, and the insurance losses that come with this particular risk.

Mini solar grids are cheaper and more efficient for rural communities as they can provide electricity at a more affordable cost as opposed to connecting marginalised areas to the national grid.

Production and development can ensue without having to go through the cumbersome processes involved in centralising grid connectivity.

It is a way to collaborate with the government in achieving the vision 2030 goals while taking care of our own goals as promised to the shareholders.

What is the cost of all this, you may ask? The cost is a long-term investment that guarantees efficiency, output, and growth of the sector itself.

After gold, tobacco is the largest foreign currency earner for Zimbabwe, which makes it a mainstay for the economy, not to mention the companies who have made it their core business and all invested stakeholders.

This is from a financial perspective. From a social standpoint, community development is a much-needed gain in rural Zimbabwe that will be fulfilled by such technological advancements.

As a purpose driven organisation, our business philosophy is deliberate in its orientation towards the development of rural Africa and the development of rural economies.

We have made a commitment to partner with other like-minded purpose driven organisations to cooperate in projects that will see a reduction in energy poverty.

In essence, a solar power plant constructed in a rural community will help with providing energy for agriculture to boost input and output, household needs, sustenance of school laboratories as well as libraries, reduce deforestation, which protects biodiversity, and the list goes on.

However, financial input remains critical and is the major concern in the renewable energy industry. Independent Power Producers (IPPs) are accredited, licensed, and ready to serve.

Our appeal to local banks, pension funds, private investors, and all other interested parties is to take a calculated chance on this “greenfield” as it is a viable investment vehicle.

In the same way, we require funding from local investors, foreign financial facilities are also a great enabling factor for this industry.

Pledges were made at the COP25 Summit, and should they be honoured, will provide a much-needed boost for the industry across the continent.

The successful implementation of a green economy will require the participation of stakeholders from both public and private institutions due to the fragile layered nature of the society and its needs.

Political will power remains key in the construction of such economies, therefore, we should take full advantage of the devolution and special economic zones policies that the government has put in place.

A simple example of how devolution can be leveraged to stimulate development can be derived from how people are always complaining about poor service at public institutions.

This is an issue that can be addressed through collaboration in creating green economies owing to the dedicated participation of corporates and other private organisations.

Private organisations have reached a certain level of perfection when it comes to offering a seamless customer service experience.

Through consultation and participation, this too can be implemented by public institutions if the private players take the opportunity to impart their expertise and know-how of quality customer service and quality goods delivery to improve the service experience our relatives and countrymen based in the rural areas receive from public institutions.

Successful implementations in those smaller units could be developed and implemented in the larger towns and cities.

To the business-minded, the devolution agenda can be seen as a gap to grow in reach as well as revenue while reaping both financial and social impact benefits for the development of our nation.

Designated Special Economic Zones provide more incentives that help cushion part of the risk associated with diversifying investments in these marginalised areas. Partnerships also lessen these risks and as Solgas Energy, we are ready to establish mutually beneficial partnerships that will result in the creation of rural green economies or development in general.

Shared value is a key pillar in sustainable development, and the triple-bottom line is practically attainable.

The people develop their community as paid employees while the investor benefits from both the buy-in of the people and the completed investment project.

As we formulate strategies for the participation in sustainable development, we must take an environmental, social, and governance (ESG)-focused approach to consider the issue of rural to urban and urban to rural migration.

We have been experiencing economic whirlwinds for a while now, the impact of which we have seen and felt in both our work and personal spaces.

While we all remain resolute in the fight for survival from our posts in urban centres, many had to choose to continue this fight from their rural homes due to circumstances beyond their control.

We may or may not have noticed this happening, but the statistics always tell the full story. The disparity between the 2000 and 2012 censuses shows a 3% decrease in the urban population.

Of the populations that have migrated to rural Zimbabwe is a demographic of young, able-bodied workers, who can provide labour for the construction of solar power plants amongst other infrastructure that support the development of green economies.

Rural Zimbabwe is a melting pot and possesses vast unutilised lands, both arable and non-arable however still viable for the construction of other developmental infrastructure.

As it is, tourism can thrive with a little effort from the communities therein, promising a lot of forex income that the sector attracts.

All this is natural and already established, imagine how much more we can achieve when we decide to be intentional.

  • Kamba is the CEO of Solgas Energy Pvt Ltd, an Independent Power Producer in Zimbabwe.

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