Community ownership in large-scale renewables ultimately hinges on a practical question:
who finances the equity — and on what terms?
In Session 4 of the JustRE Alliance Community of Practice (CoP) on Community Ownership, we focused on the financial structures that determine whether communities participate as real owners of renewable energy projects, or remain equity holders in name only.
The session, hosted by Juan Pablo Cárdenas (JustRE Alliance), brought together two perspectives from different regions facing similar structural barriers:
Across contexts, a common pattern emerged: communities are expected to hold equity, but often under expensive and restrictive financing conditions that delay — or erode — the benefits of ownership.
The capital bottleneck: Financing community ownership across the project lifecycle
Juan Dumas grounded the discussion in a reality many Latin American communities recognize: energy projects are frequently developed on community lands without meaningful wealth creation locally. Meliquina’s response is to structure equity partnerships in utility-scale projects “from scratch,” with communities positioned as co-developers and eventual shareholders. But as soon as a community negotiates equity, the next bottleneck appears: capital access. Even where communities can “earn” equity through co-development, they are typically diluted at construction, and without affordable financing they cannot retain a meaningful stake and access to affordable capital becomes a key barrier.
The Community Equity Opportunity Fund (CEOF) responds to this challenge through a blended finance facility (targeting USD 40 million in its initial phase) designed to:
The sequencing is deliberate: avoid forcing communities to borrow high-cost capital at the riskiest moment. Instead, create a pathway into ownership once projects are operational and cashflows are stable.
The intended impact is wealth-oriented, building community assets and long-term dividend streams alongside profitable renewable energy projects that contribute to climate outcomes.
When ownership exists — but doesn’t pay
Bulelwa Ntshingwa highlighted a different market failure in South Africa. There, community equity participation is mandated. The issue is not access to shares — it is cost of capital and timing of returns.
Community trusts often finance their stakes at interest rates of 12–18%, combined with aggressive dividend “cash sweeps” that prioritize debt repayment. The result: communities may wait 15–20 years before seeing meaningful benefits.
Infra Impact’s Local Community Trust Fund addresses this by refinancing community debt in operational projects through a blended vehicle anchored by first-loss capital. The outcomes include:
In early examples, refinancing has significantly increased the share of dividends flowing to communities — immediately improving cash availability for education, healthcare, and local development priorities.
Key reflections
Three takeaways shaped the session:
As Session 4 made clear: community ownership is not only a governance challenge — it is fundamentally a finance design challenge. Aligning capital structures with community benefit remains central to delivering socially legitimate renewable energy at scale.
What’s next in the CoP
The CoP continues through July, moving from financing mechanisms into deeper questions of implementation in context.
Session 5: Community Ownership in Practice
Our next session will explore South Africa’s lived experience of community equity shareholders in wounded contexts — including how healing can be integrated leadership and build governance capacity over time.
Sign up for the Community of Practice here.
