Value Chain Cluster Development in Ilembe

United Nations Industrial Development Organisation (UNIDO), funded by the State Secretariat for Economic Affairs (SECO) of the Swiss Confederation

With the sugar value chain as one of the focus areas, the UNIDO-led Value Chain and Cluster Development (VCD) Component is integral to the Programmatic Approach for Local Economic Development in the iLembe District of South Africa. Overall, the programme aims at contributing to the improvement of the economic future of the area and the quality of life of the District’s inhabitants. OneWorld was part of the multi-disciplinary team mobilised by UNIDO to assess the renewable energy opportunities for stimulating the green economy within the sugar value chain. Specifically, OneWorld conducted a pre-feasibility study of the potential for renewable energy within the sugar sector value chain in the area.

With the primary objective of stimulating job creation and enterprise development, the research explored the feasibility of expanded cogeneration in the sugar mills, in small- and large-scale ethanol production, and in grower Cooperative level biogas energy projects in the area. Depending on the scale and entry points of these initiatives, expansion of the growers and SMEs in the sugar value chain is a sought-after result, along with increased revenues for the farmers. Research and stakeholder consultation has demonstrated clear alignment of these objectives with local, provincial and national Government policies that seek to resolve South Africa’s triple challenges of poverty, inequality and unemployment. The research and consultation processes simultaneously validated the underpinning assumption that decentralised energy models in South Africa have the potential to create exponential jobs on the back of structural economic change.

As part of this project, Belynda Petrie, completed a feasibility assessment, through participatory analysis, to assess the opportunities for small to medium scale enterprise and smallholder development for renewable energy opportunities within these VCs. The focus of the assessment was on exploring the feasibility of expanded cogeneration in existing sugar mills, small- and large-scale ethanol production, and potential for grower cooperative level biogas energy projects.