By Nelisiwe Mabutyana, Head of Finance: SPM
The true legacy of infrastructure projects lies not only in what is built but in how those projects uplift and empower the people around them. At SPM, this belief is more than aspirational — it underpins how we assess long-term project viability, social license to operate, and ultimately, return on investment.
I’ve seen firsthand how local partnerships — when treated as strategic inputs rather than compliance requirements — can safeguard investment timelines, reduce execution friction, and unlock measurable shared value.
Why Community Partnerships Are a Risk Mitigation Strategy
In the infrastructure and energy sectors, delays and disruptions caused by community resistance or misalignment can add millions to project costs. According to the World Bank, community-driven development initiatives implemented across more than 20 countries have consistently led to faster project implementation and improved service delivery — from water infrastructure to education to local governance.
The data tells us what project finance practitioners already know: meaningful community inclusion lowers long-term costs. It strengthens stakeholder confidence, speeds up permitting, and contributes to operational stability. It’s not just a moral imperative; it’s a material one.
Moreover, a strong local skills base reduces recruitment costs, increases productivity, and supports continuity. For every skilled job created, 2.5 additional jobs are generated in surrounding services and non-tradable sectors. That’s economic multipliers at work — and they directly affect project sustainability.
The Return on Community Investment
From a financial perspective, CDD should be viewed through the same lens as any capital allocation decision — measured by both its direct yield and long-tail value. Social value assessments have found that every R1 invested in local development can yield up to R3.40 in economic and social return.
Consider the long-term cost avoidance: less reputational risk, fewer disruptions, improved contractor performance due to local loyalty, and community co-ownership of outcomes. These factors have real implications for total lifecycle cost, IRR, and NPV modelling in our capital projects.
In the UK, community finance initiatives funded nearly R6 billion worth of projects in underserved areas in a single year — creating or preserving over 8,000 jobs. In markets like South Africa, where access to capital is a systemic barrier for small enterprises, the opportunity for infrastructure players like SPM to fill part of that gap — whether directly or through intermediaries — is a strategic differentiator.
What SPM Is Doing Differently
We’ve embedded community engagement into our operational model — not as an afterthought, but as a strategic design principle.
What always stands out to me when reviewing post-project reports and supplier onboarding data is the measurable improvement in cost performance and supplier reliability when local businesses are included early. The numbers tell a powerful story about what trust and shared value can deliver.
That means:
- Local Hiring Strategies: We develop labour pipelines with local training partners, creating a workforce that understands the environment and reduces reliance on imported skills.
- Local Procurement Mandates: We onboard and mentor SMEs into our supply chain, driving economic inclusion and supplier diversification, which is increasingly important from a procurement risk perspective.
- Skills Development Programmes: Through collaborations with vocational institutions, we align training with project timelines and technical requirements — boosting productivity and creating lasting economic value.
A Proven Example: Buffelsdraai Reforestation, eThekwini Municipality
One of the most compelling examples of community-driven infrastructure in South Africa is the Buffelsdraai Landfill Buffer Reforestation Project in Durban:
- It has restored approximately 580 hectares of degraded land using indigenous species.
- As of 2023, the initiative had supported over 500 community-based “tree-preneurs” and created hundreds of permanent and temporary jobs.
- It’s also expected to sequester more than 40,000 tonnes of carbon over 20 years, while enhancing biodiversity and protecting nearly 200 bird species.
The project has received national and international recognition for its climate mitigation, biodiversity restoration, and inclusive socio-economic impact. It demonstrates the power of aligning infrastructure goals with ecological regeneration and local livelihoods.
We’ve witnessed how results like these can shift community sentiment — from skepticism to genuine partnership — and significantly reduce tensions or disruptions around project assets.
The Road Ahead
As we continue to grow, our financial models will increasingly include social value metrics, local spend tracking, and skills development KPIs alongside traditional cost and schedule metrics.
Community-driven development is not a soft initiative. It’s a material strategy that drives cost efficiency, enhance operational durability, and aligns infrastructure investment with inclusive growth.
We measure success not just in infrastructure delivered, but in the lives improved, businesses supported, and relationships built along the way. Our work doesn’t end when a project is completed — the real value lies in the partnerships we leave behind: stronger communities, resilient supply chains, and local skills that endure. That’s the SPM way.
