A photo voltaic revolution in African agribusiness

Each farmer that has ever labored the soils has relied on the facility of the solar.

However farmers world wide are more and more trying to harness the solar in one other method – by producing electrical energy from photo voltaic photovoltaic panels.

In Africa, farming in giant elements of the continent, notably in additional distant rural areas, continues to happen with little or no mechanisation. With no means to energy equipment, farmers are unable to pump water for irrigation, or use refrigeration to retailer produce, or perform actions similar to milling, drying and different types of value-added processing.

This example leaves rural communities caught in a low-income lure. “There’s a direct connection between the vitality poverty actuality and meals poverty actuality,” says Carlos Sordo, senior product supervisor for productive makes use of of renewable vitality at GOGLA, an trade group for off-grid photo voltaic.

Even the place energy is accessible for farms and agribusinesses, it’s typically provided by diesel mills which might be costly to function, in addition to extremely polluting.

As in different sectors, solar energy is usually probably the most real looking solution to deliver energy to agribusinesses in areas that lack grid entry. However scaling up the expertise in order that Africa’s 250m farmers can take pleasure in the advantages of a dependable energy provide will likely be removed from straightforward.

Energy battle

Shortly after graduating from faculty, Nigerian entrepreneur Onimisi Charles Atere launched a digital market entry enterprise geared toward Nigerian farmers. As he engaged with farming communities, he realised the depth of the vitality difficulties within the sector.

The reliance on diesel for powering primary mechanical processes struck Atere as illogical, provided that Nigeria boasts a few of the world’s greatest circumstances for photo voltaic vitality. “I began considering, how can we assist these farmers faucet into this considerable pure useful resource,” he tells African Enterprise. The end result was his resolution to launch a brand new firm, Nimsy Agro Photo voltaic Idea, to offer solar-powered irrigation pumps and different agricultural tools for farmers in northern Nigeria.

The corporate made a “large breakthrough” final 12 months when it obtained a serious order from the US-based non-governmental organisation Heifer Worldwide, which subsequently led to elevated curiosity from different prospects.

Essentially the most primary problem dealing with firms like Nimsy Agro is that farmers battle to afford the upfront price of investing in solar-powered tools.

Atere has tried to deal with this downside by partnering with Heifer Worldwide to ascertain a lease-to-own mannequin, during which farmers pay for his or her tools in instalments over two years.

Nimsy Agro, which lately gained first prize within the Africa Vitality Entrepreneurship Awards from the Sustainable Markets Initiative and Octopus Vitality, now has plans to increase its providing past its present base in Northern Nigeria. “Our long-term plan is to have the ability to attain at the least a million farmers with our photo voltaic agricultural merchandise throughout Nigeria and sub-Saharan Africa throughout the subsequent 5 to 10 years,” says Atere.

A key think about nudging farmers in the direction of utilizing photo voltaic vitality is the rising prices of diesel. In Nigeria, the removing of diesel subsidies in 2023 led to a sudden tripling of vitality prices. Habiba Ali, founding father of Sosai Renewable Energies, one other Nigerian firm that distributes a variety of photo voltaic merchandise and programs, says this has helped spur demand for photo voltaic alternate options.

“Individuals use much more cash shopping for gasoline,” she says. “And so once they see an possibility, they really do go for it.”

Ali provides that solar energy can have a variety of makes use of for smallholder farmers, which might doubtlessly allow rural areas to maneuver up the worth chain. “We will even have milling and processing throughout the group in order that they don’t must promote their produce rapidly to middlemen, who really take advantage of cash. They’ll really add worth to those meals crops of their group and promote at a premium.”

Crossing wires

One of many elements holding again progress in extending photo voltaic vitality is a scarcity of coherence in policymaking round vitality entry and vitality prices for agribusinesses. “There’s at all times been a fragmentation between the agricultural sector and the vitality sector in Africa,” warns Sordo. “Ministries don’t speak to one another.”

The shortage of coherence can be seen amongst improvement companions. The World Financial institution, Sordo says, works with each vitality and agriculture ministries, however runs “related programmes with very completely different designs,” that he says find yourself worsening fragmentation.

As an instance the dearth of joined-up considering, as a part of the World Financial institution-led Mission 300 initiative, which goals to deliver electrical energy entry to 300m individuals in Africa by 2030, 12 African international locations have agreed nationwide vitality compacts. These compacts comprise detailed methods for attaining electrification. But seven of the 12 international locations don’t even point out agriculture of their compacts, whereas three different others make solely superficial references to the sector. Solely Malawi and Zambia pay vital consideration to electrifying agriculture of their compacts.

Neglect on the policymaking stage interprets right into a ignorance about photo voltaic vitality amongst agribusinesses. “The precise physique of the issue is almost all of the agri trade in Africa wouldn’t have a clue about companies offered by vitality firms,” says Sordo.  

Whereas he does consider progress is being made, notably with solar-powered irrigation, and expects an extra acceleration within the coming years, Sordo emphasises how extra “sensitisation and consciousness elevating” is required for stakeholders all through the sector. 

Monetary sustainability

One of many key duties is guaranteeing firms providing photo voltaic vitality companies may be financially viable. Sordo notes how grants from donors typically favour firms that serve smallholders. Whereas that is priceless, he means that firms in search of a “wholesome portfolio of shoppers” may also have to search for prospects amongst larger-scale agribusinesses.

“Having anchor prospects offering anchor demand is unquestionably priceless to the monetary stability in the long run,” says Humphrey Wireko, managing director at CrossBoundary Entry, a blended finance platform for mini-grids. “A number of the greatest prospects on the mini-grids are people who’re operating milling machines and issues of that nature.”

“As a way to make a mini-grid worthwhile, you want individuals to be utilizing electrical energy. You want individuals to be utilizing machines,” Wireko continues. This, he admits, is way from straightforward. Financing entry to tools might help, however solely up to a degree, provided that demand for agricultural equipment is usually extremely seasonal.

CrossBoundary Entry has simply launched a venture to take a position $20m in mini-grids in Madagascar alongside renewable vitality firm ANKA, with the intention of connecting 62,000 individuals to electrical energy by subsequent 12 months.

“To develop into a greater buyer on the grid, you’ll want to earn cash, and to earn cash, you’ll want to have a dependable, sturdy and sustainable enterprise,” says ANKA’s CEO Camille André-Bataille. To assist tackle the monetary problem of working mini-grids in rural areas of Madagascar, the corporate began creating an “‘”AgriGrid”’” idea in 2017. This goals to create a “virtuous cycle” the place solar energy is used to construct agribusiness enterprises and stimulate demand for energy so mini-grids can function sustainably.

Finally, the potential advantages of solar energy for Africa’s farmers are apparent – however make entry to solar energy financially viable stays much less sure. In a continent the place sunshine is never in brief provide, scaling up options to this downside will likely be essential if Africa is to lastly fulfil its promise to develop into an agricultural powerhouse.