DEPARTMENT FOR SCIENCE, INNOVATION AND TECHNOLOGY

Innovative Agricultural Cross-Subsidised Financing of Access to Clean Energy and Sustainable Cooling with Smart Agri-Centres in Uganda

Project disclaimer

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Description

In an EnergyCatalyst7 project, SVRG with Ugandan partners developed a game-changing approach to rural energy-access, economic-empowerment and agricultural-productivity. The SmartAgri-Centre(SAC) combines a50kW centralised solar-power plant with an integrated set of community productive use and agri-value-addition services, in a large central community hub. Feedback from the local community shows the social impact the Centre has brought, including improved environment, knowledge of farming practices, income, savings and positive impact on family life and education. In the first year of operation, analysis showed that the SAC services helped farmers quadruple average annual earnings (up from $800 to $3100), increase yields across a variety of crops, and reduce input costs by 30%. Across the community, in that year, the centre generated additional value of $211,500. GESI impacts were also apparent: the majority of the 110members of the newly-formed agricultural cooperative are women, and female farmers reported positive impacts from the SAC. 40% of Co-op board members, and 40% of the business committee are female. The SAC is designed to address specific priorities and needs of a community, so each is subtly different. But the average cost to SVRG and partners of providing the infrastructure, and years of community support/training is around$250,000. The data we have collected suggests that communities should be able to afford to repay this cost in less than 2 years from their increased earnings. Our challenge in scaling this solution is to determine the best business model and community engagement strategy for the community to be able to repay the costs of providing the SAC from their agricultural income. According to the data we have collected, the community earns enough to repay the costs in under 2 years. However, the mechanism for this is far from obvious. Individual farmers in these communities are highly risk-averse (as well as lacking financial skills and creditworthiness). Entering into contractual arrangements with 100+ separate farmers to ensure repayment would be unworkable. Alternative models (operating the centres ourselves and collecting revenues and taking a cut of agricultural earnings as a "benign middleman", or establishing/empowering a community cooperative to do the same, have other risk factors and disadvantages). In this project, SVRG and partners will construct and operate 6 of the SACs in new communities, trialling different business/repayment models, to establish the ones that will allow us to scale the roll-out of the technology to rural communities with the highest amount of success, impact and commercial return.

Objectives

In an EnergyCatalyst7 project, SVRG with Ugandan partners developed a game-changing approach to rural energy-access, economic-empowerment and agricultural-productivity. The SmartAgri-Centre(SAC) combines a50kW centralised solar-power plant with an integrated set of community productive use and agri-value-addition services, in a large central community hub. Feedback from the local community shows the social impact the Centre has brought, including improved environment, knowledge of farming practices, income, savings and positive impact on family life and education. In the first year of operation, analysis showed that the SAC services helped farmers quadruple average annual earnings (up from $800 to $3100), increase yields across a variety of crops, and reduce input costs by 30%. Across the community, in that year, the centre generated additional value of $211,500. GESI impacts were also apparent: the majority of the 110members of the newly-formed agricultural cooperative are women, and female farmers reported positive impacts from the SAC. 40% of Co-op board members, and 40% of the business committee are female. The SAC is designed to address specific priorities and needs of a community, so each is subtly different. But the average cost to SVRG and partners of providing the infrastructure, and years of community support/training is around$250,000. The data we have collected suggests that communities should be able to afford to repay this cost in less than 2 years from their increased earnings. Our challenge in scaling this solution is to determine the best business model and community engagement strategy for the community to be able to repay the costs of providing the SAC from their agricultural income. According to the data we have collected, the community earns enough to repay the costs in under 2 years. However, the mechanism for this is far from obvious. Individual farmers in these communities are highly risk-averse (as well as lacking financial skills and creditworthiness). Entering into contractual arrangements with 100+ separate farmers to ensure repayment would be unworkable. Alternative models (operating the centres ourselves and collecting revenues and taking a cut of agricultural earnings as a "benign middleman", or establishing/empowering a community cooperative to do the same, have other risk factors and disadvantages). In this project, SVRG and partners will construct and operate 6 of the SACs in new communities, trialling different business/repayment models, to establish the ones that will allow us to scale the roll-out of the technology to rural communities with the highest amount of success, impact and commercial return.

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Location

The country, countries or regions that benefit from this Programme.

Uganda

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