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How a solar plant is changing the fortunes of a small-town economy

The railway town of Touwsrivier is hardly the thriving economy it once was. But the presence of a solar plant will hopefully be the catalyst needed to reignite the small town’s economy.

Located in the Cape Winelands District in the north eastern part of the Western Cape, Touwsrivier is known as the passageway between the Karoo and the Boland. The national railway which runs through it used to be operational until the late 1990s, and it was responsible for most of the economic activity in the community, according to town manager Neville Fourie.

After Spoornet (Transnet) withdrew, banks and businesses followed suit as there was no longer a business case to stay. The community has been struggling to revive its economy since, said Fourie who was speaking at an investment summit, at a conference centre not too far from Touwsrivier on Friday.

Fourie along with other representatives from the Breede Valley Municipality, some residents of Touwsrivier and businesses and potential investors gathered together to chart a way forward for the community.

There is a second chance for Touwsrivier to become a thriving economy, through the presence of the CPV1 solar power plant.

The 36 MW power plant, owned by independent power producer (IPP) Pele Green Energy, created over 600 job opportunities in Touwsrivier through its construction in 2013, explained Russel Johnson, a member of local government responsible for community development.

The plant which has been running since 2015, has a 20-year licence to operate. The task of the Touwsrivier community is to ensure that the economy will remain sustainable long after the plant reaches the end of its lifetime, explained Fumani Mthembi, the managing director of Knowledge Pele.

Knowledge Pele is an agency part of the Pele Energy group of companies, which focuses on the social-development aspects of the IPP’s investments. Mthembi is one of the four founders of Knowledge Pele, which has been in existence since 2009 and has been operating in the renewable energy space.

Mthembi explained to Fin24 how the concept of “social impact investing” is meant to work in Touwsrivier.

Social impact investing is different to Corporate Social Investments – which usually involve an asset being handed over to a community without anyone really taking ownership of that asset, eventually rendering it useless in a matter of years. “This is why all over the country there are computer centres gathering dust,” Mthembi said.

Knowledge Pele instead enters into co-investment vehicles with communities. Through a community trust, Touwsrivier can take ownership of its assets and be responsible for the returns.

For example, there is a hydroponic farm (a method of farming without using soil and with limited exposure to elements which could destroy crops) being established in the community, it is set up by the socioeconomic development budget provided from the anchor asset – CPV1.

A hydroponic farm located in Touwsrivier.

Fumani Mthembi, MD of Knowledge Pele speaks to pupils alongside the hydroponic farm in Touwsrivier, which will provide job opportunities. (Photo: Supplied)

The hydroponic farm, a small commercial venture, is powered by a rooftop solar power system at the Touwsrivier primary school and will pay for the electricity it uses through the returns generated from its produce, Mthembi explained.

“Over a nine to 12-year period, it will have paid back the value of the system to the community trust. That allows us to reinvest in the next thing [next industry],” she explained. This is useful for Touwsrivier because the problem is there has been an absence of reinvestment capital.

The social impact of the farm is that it is a source of job creation. At least two people would be permanently employed at a farm, and others from the community can participate in other areas of the value chain by providing the packaging and distribution services for the produce, she explained.

The rooftop solar panel system was set up through online crowdfunding. The primary school where it is located will benefit by also being able to draw electricity. It is a no-fees school and can do without the electricity expense, said Mthembi.
The solar panel unveiled at Touwsrivier Primary Sc

The rooftop solar system was unveiled at Touwsrivier Primary School on Saturday, October 13. (Photo: Supplied)

Much like the discovery of gold set off the financial and other sectors which diversified the Gauteng economy, the same thing must happen in Touwsrivier, said Mthembi.

“One of the challenges in our country is that we have not really given small towns due investment attention. We have not yet arrived at a place where we recognise that a place like Touwsrivier is itself a microcosm economy. It is complete and should operate as a self-sustaining system.”

Mthembi stressed the importance of the community taking ownership of its future economy, and that it needs to identify what the other emerging industries may be. The sustainability of the town depends heavily on the diversification of its economy.

Economic diversification will ensure that Touwsrivier is not constrained by a single resource.

Following breakaway sessions throughout the day, community members presented plans to lift various aspects of Touwsrivier’s economy. Among the proposals made include developing its tourism industry and suggestions were made to create a tourist attraction by establishing a heritage route and even a fossil route.

The youth also made their representations – asking for more opportunities for skills training especially in artisanal work.

Small business owners also gave their views in terms of the challenges they are currently facing. They identified the existing infrastructure of the railway as an asset that can be used again.

Fourie who spoke to Fin24 after the day’s session said he was optimistic about the future of Touwsrivier, especially after having heard the inputs from the different community members to “revive the situation”.

He said it is important now to start implementing some of the plans and that there needs to be continuous monitoring of the initiatives.  



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