Energy 4 Impact assisted SunCulture – a company providing pay-as you-go, solar-powered drip irrigation systems and services – to devise an innovative strategy that de-risks the company’s business model by helping small farmers increase profitability through improved access to market. This pioneering approach is hoped to jump start a sustainable market for clean irrigation, while promoting the development of the agri-food sector in the country.
Only 25% of irrigable land is under irrigation in Kenya. Irrigation is key to improving agricultural production, thereby generating prosperity and employment in small farming communities. Solar-powered drip irrigation can save up to 80% of water compared to current practices. In addition, it significantly reduces the cost of labour, fuel and fertiliser, while improving crop quality and yields.
- says Samir Ibrahim, CEO and Co-Founder of Nairobi-based SunCulture.
While SunCulture’s ‘Pay-As-You-Grow’ model has succeeded in making their technology accessible to most farmers, its success depends on farmers being able to generate a steady income from the sales of their produce. This is often a challenge for small farmers, who struggle to keep their cash flowing consistently.
Energy 4 Impact has been working with SunCulture on addressing these barriers, especially in the areas of end-user financing and access-to-market for smallholder farmers.
- says Energy 4 Impact Head of Advisory, Shashank Verma.
Energy 4 Impact conducted a study, which looked at the horticulture value chain and related dynamics (players, prices and profit cycles) for selected crops and vegetables in a number of counties in Kenya. The study revealed that because most smallholder farmers in Kenya sell their produce at wholesale markets through brokers, their profit margin remains small. This, combined with the price volatility of horticultural produce in the wholesale markets, hampers their ability to pay for solar irrigation on a cash basis.
- says Shashank
This advisory work forms part of Energy 4 Impact’s Energy for Business Development (EBD) programme, funded by the World Bank, and providing advisory services and capacity building support for clean energy access to micro, small and medium enterprises in Kenya, Tanzania, Senegal and Uganda. It also supports the productive use activities of newly electrified villages, clean cooking and women’s economic empowerment. Advice and services include business consulting, customised projects, capital raising and partnership support.