COMPILED BY

2015

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Table of Contents

1. PURPOSE ....................................................................................................................... 2

2. PROJECT DESCRIPTION ................................................................................................... 2

3. SOCIO-ECONOMIC CONTEXT .......................................................................................... 6

3.1 Population ........................................................................................................................ 6

3.2 Education .......................................................................................................................... 6

3.3 Housing ............................................................................................................................. 7

3.4 Economic Production Structure ....................................................................................... 7

3.5 Employment Profile .......................................................................................................... 8

3.6 Household Income Distribution ....................................................................................... 9

3.7 Household Infrastructure ................................................................................................. 9

4. DEVELOPMENT PLANNING CONTEXT ............................................................................ 10

4.1 National Planning Context ............................................................................................. 10

4.2 Limpopo Provincial Planning Context ............................................................................ 12

4.3 Greater Letaba Municipal Planning Context .................................................................. 13

5. ECONOMIC ASSESSMENT ............................................................................................. 13

6. ADDITIONAL SOCIAL BENEFIT FOR THE MUNICIPALITY .................................................. 15

7. OTHER CONSIDERATIONS ............................................................................................. 15

8. POTENTIAL IMPACTS ASSOCIATED WITH THE PROPOSED PROJECT ............................... 16

8.1 Construction Phase ........................................................................................................ 16

8.2 Operational Phase ...................................................................................................... 16

9. PLAN OF WORK FOR EIA ............................................................................................... 17

9.1 Literature Analysis and Review ...................................................................................... 17

9.2 Consultation with I&APs ................................................................................................ 17

9.3 Comparative Analysis with Other Studies and Reports ................................................. 17

9.4 Variables ......................................................................................................................... 17

9.5 Rating of Social and Economic Impacts .......................................................................... 17

9.6 Reporting ........................................................................................................................ 17

10. SUMMARY AND CONCLUSION ...................................................................................... 18

11. REFERENCES ................................................................................................................. 21

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1. PURPOSE

The purpose of this report is to document socio-economic issues at the conceptual level that should be

considered as part of the environmental impact assessment of the proposed Bolubedu Photovoltaic

Solar Park west of the Eskom Bolubedu Substation, which is in Greater Letaba Local Municipality,

located in the eastern part of Limpopo Province. This report is one of several documents that consider

the environmental impact of the proposed project from different perspectives, with specific

consideration of the Renewable Energy IPP Procurement Programme requests. Relevant planning

documents were used and reference was made to recent environmental impact assessments of similar

projects at other locations in the country. Experts who are working on other elements of the Bolubedu

Solar Park Environmental Impact Assessment were also consulted.

2. PROJECT DESCRIPTION

A 75 MW photovoltaic solar plant is being proposed on the Remainder of the Farm Kromrivierfontein

360 LT and the Remainder of the Farm Worcester 200 LT in Greater Letaba Local Municipality (Limpopo

Province) by Renewable Solutions Business Enterprise (Pty) Ltd. The farm is located 49 km south west of

Giyani and adjacent to the Eskom Bolubedu Substation.

The map below (figure 1) illustrates the proposed location relative to Tzaneen and Giyani. Tzaneen is

located 75 km south west of the site. It had a population of almost 15, 000 in 2011. The population of

Giyani was approximately 26,000 people in that year. The capital town of the Municipality is

Modjadjiskloof. It is 58 km south-west of the project site and had a population of 1,500 people in 2011.

The proposed property is on communal land and is surrounded by six rural villages with a total 2011

population of 11,324 people. The socio-economic dynamics of these places will be discussed in more

detail below. Figure 2 indicates the proposed project location relative to these settlements. Two other

villages, Maphalle and Ga-Nata are further away. Maphalle can also be seen in Figure Two.

The farm portion that is being considered is almost 200 hectares in extent, of which approximately 160

hectares will be used for the solar plant activities, which include photovoltaic panels and buildings

required for office and storage space, as well as a workshop. The plant will comprise several long rows

of photovoltaic panels that convert sunlight into electricity, which will deliver energy into the Eskom

distribution network at the substation adjacent to the proposed site. Associated infrastructure and

structures above the ground will consist of:

Internal and external access roads and a small parking area;

Fencing of the plant and video security control systems;

Foundations / mini piles for the mounted photovoltaic arrays;

Electricity access point and UPS (Uninterruptible Power Supply) devices;

Water access point and/or extraction on-site from borehole(s), water pipelines, water treatment;

Sewage system and storm water collection system;

Workshop & warehouse;

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Control building with offices;

Cabling linking photovoltaic strings and other internal cabling;

Medium voltage stations hosting DC/AC inverters and medium voltage power transformers;

One or more medium voltage receiving station(s), linking in parallel all the medium voltage stations;

One small on-site high voltage substation with high-voltage power transformers, stepping up the

voltage to the voltage of the Eskom’s grid, a control building and a busbar with metering and

protection devices (also called “switching station”);

Two new small sections of power line, 100 m long, for the connection to the Eskom Substation,

which is adjacent to the proposed site.

Project construction could take approximately fifteen months to complete and the facility will have a

lifetime of 25-30 years.

Specific attention will be paid to socio-economic development and local economic growth by way of job

creation, education and skills development, facilitating the participation of local communities and

supporting local manufacturing. It is anticipated that 100 people will be employed during the

construction period, although this number can increase up to 150 for short spaces of time during peak

periods.

During the operational phase the project is expected to employ between 35 and 40 people with an

employment profile as reflected in the table below.

Table 1: Anticipated Employment Profile for the Proposed Bolubedu Solar Plant Category Number Monthly Salary R’ Total Monthly Salary R’ Recruitment

Plant Manager 1 55,000 55,000 Local/National

Plant Operators 4 40,000 160,000 Local/Provincial

Administrator 1 22,000 22,000 Local

Security 21 8,000 168,000 Local

Labourers 11 6,000 66,000 Local

Total 38 471,000

Staff remuneration, maintenance equipment and consumables are likely to be the primary operational

expenses. A substantial proportion of this expenditure may flow to the neighbouring Tzaneen

Municipality, because the required products and services may not be available in Greater Letaba

Municipality. Rates and taxes should technically accrue to the local municipality, but the proposed site is

on communal land, which is not yet incorporated into the municipal billing system. Expectations that the

Traditional Authority may have regarding the project must be clarified and formalised during the project

planning process. Company tax will accrue to the national government. Figure 1 also shows the entire

Greater Letaba Local Municipality area.

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Figure 1: Proposed Location of the Bolubedu Solar Park Relative to Tzaneen and Giyani Towns

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Figure 2: Proposed Location of the Bolubedu Solar Park Relative to the Surrounding Communities

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3. SOCIO-ECONOMIC CONTEXT 3.1 Population

Greater Letaba is a rural municipality with commercial farmland in the west and 108 mostly small

settlements on communal land in the rest of the area. The land size is approximately 1,900km² and the

municipal population according to the official census of 2011 was almost 213,000 people. There are

considerably more females (117,400) than males (95 300), which implies that females comprise 55.2% of

the population. Females represent 53.3% of the population in Limpopo Province. It points toward a high

incidence of male migrant labour from the project area, due largely to insufficient local job

opportunities.

Population has decreased by more than 7,000 people since the 2001 census, which means that

population growth was -0.3% per year, compared to 1% growth per year for the country. It is therefore

evident that this Municipality is experiencing an out-migration of residents. The population was 220,120

people in 2001.

Population numbers for the six settlements (host communities) surrounding the project site are

reflected in the table below. They are all located within a 5km of the project.

Table 2: Population in the Host Communities of the Project, 2011 Settlement Male Female Total Female %

Ditshoseng 576 781 1357 57.6

Ga-Femane 787 1 044 1831 57.0

GaRamaroka 742 994 1736 57.3

Lebaka 879 1 019 1898 53.7

Mohlabaneng 1 223 1 557 2 780 56.0

Xawela 725 997 1722 57.9

Total 4932 6 392 11324 56.4

Source: Stats SA Census 2011

Mohlabaneng is the largest village, with a population of almost 2,800 people. It is 4km from the project

site. The female ratio in these settlements is higher than the average for the Municipality.

3.2 Education

Education levels of local youths and adults are low, with almost 27% never having attended school as

compared to 17.3% for the Province. Only 6.7% of residents older than 20 years have obtained post-

school qualifications, compared to 10.6% for Limpopo Province. In the country, this group is almost 14%

of the population that is older than 20 years. There is a very high incidence of people who start

secondary school (33.9% of people older than 20 years), but who do not complete it. Only 17.7% of this

group have completed secondary school, compared to 22.3% for the Province.

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The proposed project is therefore unlikely to experience problems with the recruitment of security staff

and labourers at the generally prevailing wage rate as indicated in table 1 above. However, managerial

staff may be more difficult to recruit locally.

Table 3: Highest Education Level of People over 20Years of Age in Greater Letaba LM, 2011 Highest educational level 2011 %

No schooling 29 908 27.0

Some Primary 16 263 14.7

Some Secondary 37 586 33.9

Grade 12 / Standard 10 / Form 5 19 567 17.7

Post Matric 7 406 6.7

Total 110 730 100

Source: Stats SA Census 2011 Education levels are even lower in the host communities, where almost 30% of people older than 20

years have never been to school. Only 15% have completed secondary school and only 4.3% have post-

matric qualifications. This information confirms that the local recruitment of unskilled staff will be easier

than the recruitment of managers.

Table 4: Highest Education Level of People over 20Years of Age in the Project Host Communities, 2011 Highest educational level Total Total %

No schooling 1661 29.9

Some Primary 864 15.6

Some Secondary 1955 35.2

Grade 12 / Standard 10 / Form 5 831 15.0

Post Matric 240 4.3

Total 5551 100

Source: Stats SA Census 2011

3.3 Housing

The housing profile reflects a stable community with more than 90% of families living in brick houses on

separate stands. The proportion of families living in informal dwellings (shacks) is remarkably low at

3.3%, compared to the national average of 13%. The provincial average is 5.2%.

3.4 Economic Production Structure

Greater Letaba Local Municipality has a small economy by Limpopo provincial standards with a total

domestic product of almost R5bn at current prices in 2013 compared to R230bn for the Province. The

economy is driven by government expenditure, mostly for the compensation of employees. The finance

sector is large, driven mostly by the imputed rental value of land, including high-value commercial

farms. Trade and accommodation is significant because of attractive landscapes for tourists, but retail

value added is mostly for local purchasing power only. The spectrum and quality of local retail facilities is

limited. Value-added in the agriculture sector is almost four times higher than the average for the

Province. This is mostly from vegetable, fruit and forestry production on commercial farms in the

western part of the Municipality. Agricultural productivity is low in the eastern part on the communal

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land where the proposed project is located. The current and projected economic growth rate in the

Municipality is approximately 1% per year and lower than that of the Province and the Country.

Table 5: Gross Value Added per Sector at Current Prices for Greater Letaba LM; 2013 Sector Amount R'm Sector %

Agriculture, forestry and fishing 477 9.7

Mining and quarrying 110 2.2

Manufacturing 230 4.7

Electricity, gas and water 1 0.0

Construction 108 2.2

Wholesale and retail trade, catering and accommodation 866 17.5

Transport, storage and communication 365 7.4

Finance, insurance, real estate and business services 1108 22.4

Community, social and personal services 395 8.0

General government 1279 25.9

Total 4939 100

Source: Quantec Regional Economic Database, 2015

3.5 Employment Profile

Greater Letaba Local Municipality has approximately 28,000 people in formal and informal employment.

The census listed 18,800 people as unemployed and another 7,900 as discouraged work seekers, who

would take a job immediately if they could find one. The strict unemployment rate is 40.3%, which is

higher than the comparative measure of 38.9% for the Province. This confirms the male absenteeism

noted above. The expanded unemployment rate, which includes discouraged work-seekers, rises to

49%, which is indicative of the availability of potential employees and the urgent need for job creation.

Table 6: Employment and Unemployment in Greater Letaba Local Municipality, 2011 Official employment status 2011

Employed 27 827

Unemployed 18 805

Strict Labour Force 46 632

Strict Unemployment Rate % 40.3

Discouraged Work-seekers 7 899

Expanded Labour Force 54 531

Expanded Unemployment Rate 49.0

Source: Stats SA, Census 2011

The Quantec Regional Economic Database indicates that only 14% of the formal labour force is classified

as highly skilled. This profile is consistent with education profile provided above. It is therefore likely

that labourers and security staff for the proposed project can be recruited from the local municipal area.

Local recruitment of managerial staff may be more challenging.

The unemployment rate within the six host communities is even worse than the municipal average at

64.2%. The census reflected almost 1,400 people as unemployed in 2011 and another 432 discouraged

work seekers. Project recruitment from host communities is therefore imperative.

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3.6 Household Income Distribution

Household income distribution is comparatively worse than the average for Limpopo Province. In

Greater Letaba Local Municipality, 64.8% of all households earn less than R19, 600 per year (R1, 633 per

month), which is considered to be indicative of absolute poverty. The comparative figure for the

Province is 55.5%.

Table 7: Household Income Distribution for Greater Letaba LM, 2011 Income Category 2011 %

No income 8 405 14.4

R 1 - R 4800 4 926 8.5

R 4801 - R 9600 9 259 15.9

R 9601 - R 19 600 15 123 26.0

R 19 601 - R 38 200 12 209 21.0

R 38 201 - R 76 400 3 812 6.5

R 76 401 - R 153 800 2 170 3.7

R 153 801 - R 307 600 1 419 2.4

R 307 601 - R 614 400 630 1.1

R 614 001 - R 1 228 800 132 0.2

R 1 228 801 or more 160 0.3

Total 58 247 100

Source: Stats SA, Census 2011 During 2011, the largest number of households (26% of the total) was in the R800 to R1, 633 per month

income group. Within the six host communities, the incidence of absolute poverty is higher than the

municipal average at 67% of all households.

3.7 Household Infrastructure

Almost all households in the host communities have access to electricity in their homes. This form of

energy is widely used for lighting, but more than 81% of host community households still use firewood

for cooking. This occurrence is likely to be associated more with affordability than with access to

electricity.

Although some households in the host communities have piped water in their homes or residential

stands, most of the residents (49%) have to use communal street taps that are located within 200

meters of their homes. Slightly less than 20% of households have to walk further than 200 meters to a

street tap. This is below RDP1 standards and worse than the provincial average, where 14% of

households have to walk further than 200 meters to a street tap.

Sanitation in the host communities is a matter of concern, with 74% of households having pit latrines

without ventilation. This is below RDP standards.

1 Reconstruction and Development Programme, which describes service delivery standards in the country.

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4. DEVELOPMENT PLANNING CONTEXT

The proposed project is consistent with national, provincial and municipal development policy as

reflected in the extracts of policy documents that are provided below. The important issues emerging

from economic development strategies are the imperatives for alternative energy generation and for job

creation.

4.1 National Planning Context2

Historically, South Africa has relied heavily on non-renewable fossil fuels (primarily coal) for energy

generation purposes. This reliance remains a key feature of the current energy mix with just over 90% of

national electricity generation needs being met from non-renewable sources. Given South Africa’s

abundance of coal reserves relative to most other countries, it is not surprising that the energy mix

favours coal and it is to be expected that coal will remain dominant. However, relatively recent

imperatives with regard to global warming, other environmental impacts associated with ‘dirty’ fuels;

and energy security, have elevated renewable energy solutions to a far more prominent position both

within energy policy and in the economic development arena in general. This has happened at a rapid

pace particularly in response to the threats associated with global warming. Most governments in the

global community now recognise that the roll-out of renewable energy at an unprecedented scale will

be needed among a number of other actions to curb global warming. Targets for the promotion of

renewable energy now exist in more than 58 countries, of which 13 are developing countries. In

addition, the renewable energy industry is now a major economic player, with the industry employing

over 2.5 million people worldwide. Renewable energy companies have grown significantly in size in

recent years, with the market capitalisation of publicly traded renewables companies doubling from $50

billion to $100 billion in just two years from 2005 to 2007 (NERSA, 2009).

There may still be disagreement on the equitable sharing of responsibilities for curbing global warming

among nations. However, proposals tabled at the 2009 UN climate change conference in Copenhagen by

a group consisting of the United States, China, Brazil, South Africa and India indicate that key developing

nations including South Africa recognise that they will not be able to avoid significant responsibilities.

When one looks at the developing nations as a wider group, South Africa stands out as a country that is

going to have to introduce particularly significant measures as it is characterised by high levels of

greenhouse Gas (GHG) emissions relative to other countries at similar stages of development.

Du Plooy (2009) points out the following in this regard:

South African CO2 production doubled between 1980 and 2004 and is higher than that of Brazil,

which has more than four times the population, and only slightly lower than the UK.

South Africa’s economy is 5-10 times less carbon efficient (or its carbon intensity is 5-10 times

higher) than the US, UK or Japan. Regarding total emissions, South Africa is not nearly as significant

2 The first part of this section was extracted from a specialist economic assessment that was conducted by Dr Hugo Van Zyl (Independent Economic Researchers) for a similar photo-voltaic solar panel project in October 2010

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a contributor to climate change as China. However, South Africa is a far greater contributor to the

world’s C02 emissions than to the world’s GDP and on this score just about exactly equalled China in

2003 at 2.8 tonnes of C02 for every $1000 of GDP generated, compared to the US at 0.55.

South African emissions per capita are still half that of the US and slightly lower than Russia’s, but

three times higher than China’s and nine times higher than India’s.

South African energy policy has started to change from one that did very little to encourage renewable

energy to one that actively encourages it. The Government’s 2003 White Paper on Renewable Energy

has set a target of 4% of electricity demand (equivalent to 10,000 Giga-watt hours (GWh)) from

renewable energy sources in 2013 (DME, 2003)3. This target has been further refined to differentiate

among different forms of renewable energy.

The first Integrated Resource Plan (IRP1) was released in late 2009. Subsequently, the then Department

of Energy of South Africa (DoE) decided to undertake a detailed process to determine South Africa’s 20-

year electricity plan, called Integrated Resource Plan 2010-2030 (IRP 2010). The IRP1 and the IRP 2010

outline the Government’s vision, policy and strategy for the use of energy resources.

The DoE announced a Renewable Energy IPP (Independent Power Producers) Procurement Programme

(REIPPPP) in 2011 as part of the implementation of the Integrated Resource Plan. It, envisages the

commissioning of 3725 MW of renewable projects (of which 1450 MW is to be with Solar photovoltaic

technology) and which must be capable of beginning commercial operation before the end of 2020.

The specific objectives and key principles of the REIPP Procurement Programme are to achieve positive

socio-economic outcomes through:

1. Job creation, to counteract the national unemployment crisis;

2. Increased local content inter alia by way of local manufacturing;

3. Fostering rural development and involving communities;

4. Education and the development of skills;

5. Enterprise development through the promotion of emerging businesses;

6. Socio-economic development; and

7. Participation by historically disadvantaged citizens and marginalized regions in the mainstream of

the industrial economy.

Solar energy does show substantial promise and South Africa is blessed with large areas where solar

radiation levels are high and well distributed (Holm et al., 2008). In addition, the solar sector seems to

show evidence of further technological advances.

A recent study4 by the Council for Scientific and Industrial Research (CSIR) found that solar photovoltaic

and wind energy projects generated benefits worth R4bn more than the R4.3bn in tariff payments that

3 To put this into context, Europe as a whole has renewable energy target of 20% by 2020. 4 Financial benefits of renewables in South Africa in 2015, CSIR August 2015

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were made by Government between January and June 2015. A total of 92 renewable projects with a

capacity of more than 6,200 MW had been procured by January 2015. The weighted average price that

was paid to operating renewables projects for the six-month period was R2.16 kWh. This cost is

dropping. The benefits referred to above also include prevention and delays in load-shedding.

In summary, the policy case for the urgent roll-out of renewable energy in South Africa has been made

at a national government level using compelling arguments that are in line with international policy

trends and with financial benefits. Targets that include solar energy have been set at least until 2020.

4.2 Limpopo Provincial Planning Context

The purpose of the Limpopo Development Plan (LDP), 2015-2019, is to:

Outline the contribution from Limpopo Province to the National Development Plan (NDP) and

national Medium-Term Strategic Framework (MTSF)5 for this period;

Provide a framework for the strategic plans of each provincial government department, as well as

the IDPs and sector plans of district and local municipalities;

Create a platform for the constructive participation of private sector business and organised labour

towards the achievement of provincial growth and development objectives; and

Encourage citizens to be active in promoting higher standards of living in their communities.

The LDP states6 that Government will commit to ensuring that the supply of energy and water is reliable

and sufficient for a growing economy, and that the responsibilities of municipal maintenance of

distribution systems are appropriately allocated and funded. Limpopo will give priority attention to

mitigate the risk of delays on the commissioning of new development projects due to electricity

constraints. The mitigation strategy will include fast-tracking the development of solar photovoltaic

projects throughout the Province, advocacy for and promotion of electricity co-generation, as well as a

provincial electricity conservation campaign.

Solar photovoltaic electricity generation is listed as one of the priority infrastructure projects in Limpopo

Province.

The Limpopo Department of Economic Development, Environment and Tourism will play a convening

and co-ordinating role with all stakeholders to implement the provincial Green Economy Strategy and to

roll-out the national Strategic Infrastructure Project (SIP 8) on Green Energy. During this MTSF period,

emphasis will be placed on waste recovery, alien vegetation control, solar photovoltaic projects, water

conservation and green settlement design principles. The Green Economy Unit in the Department will

use the 2013 Provincial Green Economy Plan to compile detailed implementation action plans for these

priorities. The Green Economy Unit will also be responsible to drive the provincial electricity risk

5 The National MTSF for 2015-2019 is the first five-year implementation plan of the National Development Plan, which has a longer horizon until 2030 6 Limpopo Development Plan, 2015; p66

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mitigation strategy by way of new solar photovoltaic projects as mentioned above, as well the

promotion of co-generation and a provincial electricity conservation campaign.

It is evident from this Plan that Limpopo Province actively encourages the development of solar energy

projects.

4.3 Greater Letaba Municipal Planning Context

The Greater Letaba Municipality LED strategy7 (December 2006), has technically expired, but has not yet

been reviewed. The strategy recommends that tourism, agriculture and community development

support should be the three primary thrusts to transform the local economy from its dominant

subsistence mode to higher levels of productivity and standards of living.

There is no mention of renewable energy, largely because it was not considered a priority at the time

when the LED strategy was compiled in 2006. The anticipated LED strategy review is likely to encourage

renewable energy generation, especially in view of the hot local climate.

It must be emphasised that the proposed project falls under the jurisdiction of the Modjaji Traditional

Authority. All project development proposals have to be directed through Traditional Authority channels

for approval, without which community acceptance and support may not be forthcoming. These

channels include the representatives of each of the villages that are adjacent to the proposed project.

5. ECONOMIC ASSESSMENT The national and local economies will benefit from civil contractor work, labour and building materials

that will be required on site if the proposed project goes ahead. On the whole, a share of approximately

40% of total CAPEX (investment costs) will be sourced within the country. This share is likely to increase

once there is a specific and competitive industry in the Republic of South Africa and in Limpopo Province

that is able to supply PV modules and other technological components.

The installation of additional solar electricity generation capacity at progressively declining costs per unit

represents a significant benefit for the South African economy, both from a financial perspective and in

terms of infrastructure availability.

After approval, the project will take approximately 15 months to be built and could have a lifetime of

25-30 years. Approximately 100 people are expected to be employed during the construction period,

although this number can increase to 150 for short spaces of time during peak periods. During the

operational phase, the power plant will require a permanent staff of approximately 38 people. That

impact will be positive considering of the strategic priority for employment creation in the Municipality.

7 Compiled with assistance from the Limpopo-EU LED Programme

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Approximately 50% of the operational costs will be locally procured in Mopani District and Limpopo

Province. This will be mostly for compensation of employees and for maintenance work by local sub-

contractors, which will have a positive economic impact for 25-30 years.

A significant additional economic benefit is the experience that will be gained with regard to solar

electricity generation in Limpopo and in South Africa, considering that this forms part of a national

strategic plan, but from a low base. This experience will be essential for the roll-out of the strategy, for

efficiency improvements and for the establishment of a local manufacturing supply chain for equipment

requirements. Furthermore, the project will also make a contribution towards reducing the carbon

emissions per unit of electricity generated in South Africa, albeit very small to start with.

Subsidies that were offered by the Government in the form of a tariff for solar-generated electricity that

will be supplied into the national grid, represented a significant cost associated with previous rounds of

bid proposals. During Window 2 of the REIPP Procurement Programme, the tariff amount was capped at

1,400 R/MWh (1.40 R/kWh) in the case of photovoltaic projects, which is close to the current domestic

retail price8 of electricity. However, the caps have been removed for Windows Three and Four of the

bidding process, due the competitive nature of previous bids. The net benefits are now convincingly

positive as indicated in the CSIR 2015 report on the financial benefits of renewables in South Africa.

The proposal will not have any negative implications for the tourism industry in Greater Letaba Local

Municipality because of the site location adjacent to the existing Eskom Substation and the several

adjacent settlements on communal land that do not compete with current tourism activities or

undeveloped tourism potential in the Municipality.

The proposed site is currently being used for communal grazing, but the carrying capacity is very low at

20ha/livestock unit. This implies that grazing for 8 cows could be lost if the operational site is fenced off.

It will be important to obtain approval from livestock owners by way of a community resolution that the

new land-use is agreed to. Consideration could also be given to assistance towards the improvement of

alternative grazing fields to compensate for the loss of 160 hectares of communal grazing land.

In summary, the proposed project will enable the national and provincial governments to accelerate the

implementation of their strategic objectives for renewable energy and create new local jobs in the

process. A significant additional benefit is the declining cost per unit of solar electricity generation.

There will be no significant costs at the national level in the form of subsidies and no significant threats

to the local tourism industry. Priority must be given to local community residents during the recruitment

process for the construction and the operational phases. A community resolution via the Office of the

Traditional Authority will be needed for the proposed project, because it is located on communal land.

8 R1.35/kWh in the Greater Letaba Local Municipality from July 2015 for more than 600kWh, which could increase beyond R1.50/kWh by the time the project becomes operational in 2017

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6. ADDITIONAL SOCIAL BENEFIT FOR THE MUNICIPALITY Renewable Solutions Business Enterprise (Pty) Ltd intends to make a corporate social investment in the

proposed project area in addition to the investment in the solar plant. A range of options are being

considered, including support for single unemployed mothers. Incentives for the mobilisation of

volunteers for community development work are also being considered. Greater Letaba Local

Municipality and the relevant village representatives of the Modjadji Traditional Authority will be

consulted about the configuration of the corporate social investment initiative. The intention is to

distribute the economic benefits of the project beyond employees, government and business.

7. OTHER CONSIDERATIONS As indicated in the spatial assessment, there are several reasons why the site that has been identified

for the proposed project is well suited for a development of this nature.

Firstly, the available radiation allows electric energy production to be internationally competitive, due to

the latitude and the climatic conditions that are found in the eastern part of Limpopo.

Secondly, the site is adjacent to an Eskom sub-station from where the solar energy can be transmitted.

The area is therefore already disturbed and the project is unlikely to contribute significantly to any

negative impacts on the tourism potential of Greater Letaba Municipality. The visual impact of long rows

of solar panels can be mitigated by landscaping.

The site can be accessed from an existing road and it is mostly flat, which is ideal for the proposed

project. Soil, geological and ecological conditions on site are appropriate and the required rezoning is

feasible from a spatial perspective.

The site is within 5km of several settlements, which will allow the bulk of the labour force to be locally

recruited. More skilled managerial staff may prefer to live in Giyani, Modjadjiskloof or Tzaneen towns,

which are between 49 and 75km from the site. Higher order integrated human settlement needs of

prospective employees, such as managerial housing, major shopping, higher education, as well as

advanced health and recreation facilities, are available in these towns.

Building materials for construction, as well as operational requirements for the Project, can also be

procured from these towns.

The fact that the site is on communal land implies that traditional community structures have to be

consulted, from the local Induna to the Chief of the Modjadji Traditional Authority. A resolution from

this Authority is essential as an indication of community approval.

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8. POTENTIAL IMPACTS ASSOCIATED WITH THE PROPOSED PROJECT 8.1 Construction Phase

The following socio-economic impacts may arise during the construction phase of the proposed project:

The national and local economies will benefit from civil contractor work, labour and building

materials that will be required on site. On the whole, a share of approximately 40% of total CAPEX

(investment costs) will be sourced within the Country.

Socio-economic benefits for local population due to job creation (especially in the lower skilled

levels);

Training and capacity building with enhancement of the skills of individual workers;

Local procurement for building materials, goods and services (catering and security);

Access to capital funding is more complex on communal land, but legal procedures have been

established for this purpose;

There should be no significantly negative impacts provided that priority is given to local residents

during the recruitment process, market-related wage rates are paid, support is continuously

obtained from the Traditional Authority and prescriptions from the Environmental Practitioner

regarding the construction site are adhered to.

8.2 Operational Phase

During the operational phase the following impacts and issues are anticipated:

Contribution to the generation of “green energy” which could reduce South Africa’s dependency on

coal generated energy and the impact of such energy sources on the bio-physical environment;

Lower cost per unit of electricity;

Positive marketing of the Municipality and District as a development area for renewable energy

investments;

Employment opportunities with benefit for unemployed individuals within local communities, in

compliance with the Government’s new “green economy” growth path;

Skills development and capacity building during the life of the facility;

Local procurement for building material, goods and services (catering and security) and for

maintenance work by local sub-contractors;

The presence of permanent security personnel will contribute to local safety and security;

Access to municipal services is more complex on municipal land, which implies that the operating

company may have to be self-reliant in this regard. This can cause tensions if the service levels are

much lower in adjacent communities. The potential risk will have to be managed in conjunction with

the Traditional Authority and the Local Municipality.

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9. PLAN OF WORK FOR EIA 9.1 Literature Analysis and Review

A full literature analysis and review will be done during the EIA phase of the project in order to provide further demographic, social and economic information related to the study area.

9.2 Consultation with I&APs

During the EIA Phase, additional information will be acquired through the public participation process and consultation with interested and affected parties.

9.3 Comparative Analysis with Other Studies and Reports

Further information required for the definitive socio-economic impact assessment will be gathered by benchmarking against other studies and reports for similar projects.

9.4 Variables

The following aspects will have to be assessed as part of the socio-economic impact assessment:

Population;

Individual and family impacts;

Community organization and needs;

Integration between local residents and newcomers.

The above mentioned variables will be related to the construction and operational phases of the proposed development.

9.5 Rating of Social and Economic Impacts

During the EIA phase, all the anticipated social and economic impacts will be rated according to the following parameters:

Extent;

Intensity;

Probability;

Effects;

Duration;

Significance.

9.6 Reporting

The Social Impact Assessment Report may include the following issues:

Description of the social environment including but not limited to demographic and socio-economic

features, current and future land-use, infrastructure requirements etc.;

Description of the local economy;

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Connections and liaison of the proposed project with integrated development planning processes in

the area;

Further and more detailed assessment of social and economic impacts described in the present

report as well as their evaluation;

Possible mitigation measures and proposals for enhancing positive impacts connected with the

development proposal;

Conclusions and recommendations.

10. SUMMARY AND CONCLUSION

The purpose of this report was to document socio-economic issues at the conceptual level that should

be considered as part of the environmental impact assessment of the proposed Bolubedu Photo-voltaic

Solar Park, which is in Greater Letaba Local Municipality, located in the eastern part of Limpopo

Province. This report is one of several documents that consider the environmental impact of the

proposed project from different perspectives.

Relevant development planning documents were used and reference was made to recent

environmental impact assessments of similar projects at other locations in the country. Experts who are

working on other elements of the Bolubedu Solar Park Environmental Impact Assessment were also

consulted.

A 75 MW Photovoltaic Solar Plant is being proposed by Renewable Solutions Business Enterprise (Pty)

Ltd. The proposed site is located 50 km south-west of Giyani town and adjacent to the Eskom Bolobedu

Substation. The Site is 200 hectares in extent, of which approximately 160 hectares will be used for the

solar plant activities, which include photovoltaic panels and buildings required for office and storage

space, as well as a workshop.

The plant will comprise of several long rows of photovoltaic panels that convert sunlight into electricity,

which will deliver energy into the adjacent Eskom distribution network. Project construction could take

15 months to complete and the facility will have a lifetime of 25-30 years. Almost 100 people are

expected to be employed during the construction period, although this number can increase up to 150

for short spaces of time during peak periods and drop to 50 during off-peak periods.

The national and local economies will benefit from civil contractor work, labour and building materials

that will be required on site. On the whole, a share of approximately 40% of total CAPEX (investment

costs) will be sourced in South Africa.

The installation of additional solar electricity generation capacity and the falling unit cost of solar energy

represent significant benefits for the South African economy.

Approximately 50% of the operational costs will have a local economic return (mostly for wages and

maintenance work by local sub-contractors), creating positive economic impacts for 25-30 years.

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During the operational phase the project is expected to employ approximately 38 people. That impact

will be positive in view of the high unemployment rate, especially among the youth.

Staff remuneration, maintenance equipment and consumables are likely to be the primary operational

expenses. Rates and taxes will accrue to the local municipality and company tax will accrue to the

national government.

Greater Letaba Local Municipality has a population of approximately 213,000, of whom more than

11,000 live in six settlements in close proximity to the proposed project site. Giyani is the closest large

town and is located 49km to the north-west. Education levels in this Municipality are worse than in the

rest of Limpopo.

The Greater Letaba local economy is small and stagnant, with government being the largest sector,

mostly in the form of expenditure on the compensation of employees. The unemployment rate of more

than 40% is above the high unemployment rate of the Province and the Country.

The proposed project is consistent with national and provincial development policy as reflected in the

extracts of policy documents that are provided in this report. It creates an opportunity to launch the

implementation of the national renewable energy generation programme, with particular reference to

solar energy. These development policy commitments can be incorporated into the local economic

development strategy after due consultation with the municipality when the revision is done. This

revision is overdue.

Important economic benefits of the proposed project include the experience that will be gained with

regard to solar electricity generation in Limpopo and in South Africa, considering that this forms part of

a national strategic plan, but from a low base. This experience will be essential for the roll-out of the

strategy, for efficiency improvements and for the establishment of a local manufacturing supply chain

for equipment requirements. The project will also make a contribution towards reducing the carbon

emissions per unit of electricity generated in South Africa, albeit very small to start with.

The following socio-economic impacts may arise during the construction phase of the proposed project:

The national and local economies will benefit from civil contractor work, labour and building

materials that will be required on site. On the whole, a share of approximately 40% of total CAPEX

(investment costs) will be sourced within the country.

Socio-economic benefits for local population due to job creation (especially in the lower skilled

levels);

Training and capacity building with enhancement of the skills of individual construction workers;

Local procurement for building materials, goods and services (including catering and security);

Communal land ownership does add a layer of complexity to the raising of project funding, but there

are systems and procedures to deal with this matter.

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During the operational phase the following impacts and issues are anticipated:

Contribution to the generation of “green energy” which could reduce South Africa’s dependency on

coal generated energy and the impact of such energy sources on the bio-physical environment;

Positive marketing of Greater Letaba Municipality as an attractive area for renewable energy

investments;

Employment opportunities for the benefit of unemployed individuals within local communities, also

in compliance with the Government’s new “green economy” growth path;

Skills development and capacity building during the life of the facility;

Local procurement for operational materials, goods and services (catering and security) and for

maintenance work by local sub-contractors;

The presence of permanent security personnel may be beneficial to the overall safety and security

situation in the area;

A reduction in the unit cost of electricity;

Access to municipal services could be complicated as a result of communal land ownership and large

differentials in service levels between the project and surrounding communities may cause

dissatisfaction.

Renewable Solutions Business Enterprise (Pty) Ltd intends to make a corporate social investment in the

proposed project area in addition to the investment in the solar plant. A range of options are being

considered, including support for single unemployed mothers. Incentives for the mobilisation of

volunteers for community development work are also being considered. Greater Letaba Local

Municipality and the relevant village representative of the Modjadji Traditional Authority will be

consulted about the configuration of the corporate social investment initiative. The intention is to

distribute the economic benefits of the project beyond employees, government and business.

In summary, the site that has been selected is suited for the proposed project, which will enable the

national and provincial governments to launch the implementation of their strategic objectives for

renewable energy. Secondly, the socio-economic impacts of the project will be positive for the country,

the Province and the Municipality, provided that the recommended mitigation measures are

implemented. A community resolution regarding the proposed project must be obtained from the

Modjadji Traditional Authority in conjunction with the relevant village representatives, because the

proposed project site is on communal land. Risks of negative impacts can be managed if close liaison is

maintained between the Municipality, the Traditional Authority and the Project.

A more detailed socio-economic analysis will be conducted during the EIA phase.

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11. REFERENCES

CSIR, 2015. Financial benefits of renewables in South Africa in 2015 Department of Mineral Resources, 2010. Draft Integrated Resource Plan, Rev2 Greater Letaba Local Municipality, 2006. Local Economic Development Strategy Limpopo Office of the Premier (2015). Limpopo Development Plan Quantec Regional Economic Indicators, 2015 Statistics South Africa, Census 2011 and 2001. Van Zyl, H (2010). Waterberg Photovoltaic Plant Environment Impact Assessment: Economic Specialist Study; Prepared for Savannah Environmental