Global Best Practices for Including Ethnic and Rural Communities in Renewable Energy Projects

An invitation for Colombia to undertake a long-term national effort to adapt and test co-development and community equity participation models in large-scale renewable energy projects that contribute to the country's energy sustainability. This includes developing accessible financial mechanisms, strengthening capacities, and designing incentives that promote the application and replicability of these models.

Enabling communities to participate in the co-development of projects planned for their territory and establishing their equity participation through structured tools—allowing them to receive the benefits of renewable energy projects rather than just being recipients of impact mitigation resources—is a necessary shift in the development model and in the relationships companies establish within territories.

To this end, FIP, Meliquina, and ConnectEP, with funding from UK PACT (Partnering for Accelerated Climate Transitions), developed the document "Global Best Practices for Co-development and Equity Participation of Ethnic and Rural Communities in Large-Scale Renewable Energy Projects," which brings together the development, lessons, and international frameworks that can be adapted to the Colombian context.

"Despite the differences with other countries that have traveled this path for more than 30 years, there are also many similarities we can learn from. This model works when a community is clear about what it wants, envisions itself as a partner in a renewable energy project, and drives it forward in accordance with its values. It also works when there is a corporate partner willing to invest time and resources to build trust and design that project together, and even help the community secure the capital to guarantee its participation," says Juan Dumas, co-founder and partner of Meliquina.

The commitment of the three organizations is to open the path toward innovative, participatory, and socially sustainable renewable energy projects.

The analysis was based on experiences from countries such as Canada, Nepal, South Africa, Australia, and Argentina, which demonstrate the political, regulatory, institutional, and financial conditions necessary to enable community participation as partners in the development and equity of renewable energy projects. "These models strengthen the social legitimacy of projects, streamline the procurement of permits and licenses, and generate sustainable socioeconomic benefits, provided they are supported by clear regulatory frameworks, appropriate financial incentives, and robust processes for organizational strengthening," Dumas adds.

The compiled experiences reflect varying degrees of participation:

In Canada, for instance, regulatory and financial incentives facilitate Indigenous co-ownership through guarantee funds, concessional loans, and capacity-building programs. Meanwhile, in Nepal, the local public stock offering strategy allows residents to invest directly in hydropower projects, generating trust and social backing. The case of South Africa imposes community equity participation as a mandatory requirement, viewing it as a Constitutional Right.

For the Colombian and Latin American context, the knowledge and application of these models is still incipient; therefore, the lessons gathered in this document offer a guide to adapt them flexibly, thereby integrating market logic with perspectives of social justice and cultural autonomy. "We identified the genuine willingness to innovate, access to capital for communities, capacity building, clear governance mechanisms, and regulatory incentives for the voluntary adoption of these models as critical success factors," explains Cesar Barco of ConnectEP.

Methodology for Implementation in Colombia

The three organizations also propose a staged methodology to implement co-development models in Colombia, which comprises three phases: identifying communities with potential to be partners; assessing governance, environmental conditions, and pre-feasibility to establish participatory agreements, territorial exclusions, and funding sources; and feasibility to legally structure participation through transparent vehicles that ensure clear ownership and fair returns.

"It is also important to have complementary regulatory and financial incentives, such as including community co-ownership criteria in energy auctions and creating guarantee funds and specific credit lines to acquire shares, alongside capacity-building programs to ensure real empowerment," Barco adds.

Lastly, the document underlines that the quality of relationships between actors—based on trust, transparency, and respect for each other's values and decision-making systems—is fundamental to prevent community participation from being reduced to a formal formality. "We have understood the need to reduce the asymmetries that exist in initiatives promoting territorial-level development, which for years has led us to confrontation between companies and communities, overcoming it transactionally. Balance implies promoting a vision among communities as partners and participants in their own development, and in companies, the need to apply market logics in relationships," adds Juanita De la Hoz, Director of Responsible Business Conduct at FIP.

Six Key Messages and Learnings

Community participation as partners in the development and equity of renewable energy projects offers a concrete opportunity to advance toward a just energy transition, where communities move from being opponents or recipients of marginal benefits to becoming active partners.

The energy transition in Latin America could represent an economic opportunity for the poorest communities, but it is marked by territorial tensions. Incorporating communities as partners allows for better alignment of community and corporate expectations, attracts investment, and promotes inclusive, lasting development models.

Community equity participation is not just a financial mechanism, but a tool to share decision-making power and wealth, transforming historical relationships among companies, communities, and the State.

Meliquina's methodology for the co-development of renewable energy projects with communities proposes integrating community participation from project identification through to feasibility, with clear agreements, shared governance, and a fair valuation of community contributions.

Community participation in project development and equity is strengthened by capacity-building processes and financial mechanisms such as trusts, which organize resource management and ensure they contribute to collective well-being and long-term development.

International best practices teach Colombia five essential factors for adopting this model: innovative leaders, access to capital, community and corporate capacity building, solid governance based on trust and co-responsibility, and voluntary regulatory incentives that reward real participation and avoid formal imposition.