The urgency of the climate crisis is being felt across sub-Saharan Africa. As droughts and floods become more frequent and severe, harvests fail and traditional rain-fed agriculture becomes increasingly unreliable.
Irrigation could be key for farmers who want to ensure food security for their families and earn an income from their crops. However, according to the British think tank ODI, only 4 to 6 percent of agricultural land in sub-Saharan Africa is currently irrigated. Irrigation is largely concentrated in the more developed African countries and among large-scale commercial farmers.
If solar-powered irrigation systems are rolled out on a large scale, they have enormous potential. They work for small farmers, who, according to the UN Food and Agriculture Organization, account for 80% of farms in sub-Saharan Africa. But they also replace expensive and polluting diesel pumps and, if managed correctly, can contribute to efforts to properly manage scarce water resources in the long term.
Battery option
Drip irrigation can direct water where it is needed most, and battery energy storage allows farmers to water their plants in the evening, minimizing losses through evaporation. Farmers can also use systems to charge small devices such as mobile phones, giving them real-time access to accurate weather forecasts and agronomy advice.
With widespread access to irrigation, we could see an increase in the productivity and profitability of land in sub-Saharan Africa, allowing farmers to expand beyond subsistence levels and aggregate their crops to sell to larger markets. A recent article in the Financial times noted that Africa has 60% of the world’s available agricultural land and, with a growing population, has the labor needed to cultivate this land. With support around land tenure, seed selection, soil health, fertilizers, access to finance and, crucially, water, Africa has the potential to not only feed its own population but also export products to support global food security, the FT said.
As I see it, there are three key challenges in rolling out solar irrigation pumps at the scale necessary to meet farmers’ needs and at the pace required by the escalating climate crisis.
Payment problems
Above all, there is the problem of affordability. Farmers must be able to afford the initial cost of a solar irrigation system as well as the duration of its use. Compared to the diesel-powered irrigation pumps that many farmers use today, the total lifetime cost of solar-powered irrigation systems can be significantly lower. We estimate that farmers can save 40% to 60% on irrigation costs.
As we see in the off-grid solar sector, taking a pay-as-you-go (PAYG) approach – or, in our case, pay-as-you-grow – has the benefit of allowing farmers to pay for their systems pay. over time, as their income increases due to better harvests.
However, this model’s reputation has been tarnished by the use of harsh sales practices designed to force customers to sign up for systems regardless of affordability. To avoid this, training is key and it is critical to separate sales and credit teams, aligning key performance indicators and compensation to ensure there is a balanced approach between customer acquisition and the portfolio health. It’s also critical that sales agents get paid their commission over time so they have an incentive to help screen potential customers.
Pump costs
It is also important to structure payment plans based on the customer’s needs, using a variety of methods to better understand their circumstances, including identity verification and cross-checking potential customers’ credit histories through the Credit Reference Bureau. We also use a proprietary credit scoring algorithm.
Even with proper pre-sale care, there is always a risk that customers will fall behind on payments. Dedicated relationship managers with advanced training and business intelligence are critical in providing after-sales support, monitoring customer accounts and providing personalized support if they spot early signs of concern. As a last resort, having the technical capacity to seize systems helps create controls on lending.
Appropriate payment plans are important, but so is keeping the initial cost of solar pumps low for customers. To this end, SunCulture is pioneering the use of carbon revenues. We are the first African solar water pump company to be certified by Washington-based sustainability standards organization Verra. SunCulture believes this route will become an increasingly established source of income for irrigation, nature-based solutions and initiatives in the wider climate adaptation sector. For that change to happen, someone has to go first.
Besides affordability, maintenance is the next major challenge, especially in remote and rural areas where farms are difficult to reach and the availability of skilled technicians is limited. By managing the lifecycle of pumps, from design to manufacturing, financing, installation and maintenance, companies can work with farmers to ensure pumps can continue to function season after season in often challenging local conditions.
Maintenance issues
Internet-of-Things (IoT) technology allows trained teams to monitor pump performance and perform maintenance remotely. This is complemented by strategically located sales and service centers and a distributed team of field engineers who can quickly respond to maintenance issues, expand local capacity and minimize downtime for farmers who rely on irrigation for successful harvests.
Here again, solar-powered irrigation has the advantage over diesel pumps because the fuel source is plentiful and locally available. Fewer moving parts also mean that solar irrigation systems are less likely to break down than their diesel counterparts.
Finally, there is the matter of attracting sufficient financing to ensure that solar irrigation companies can become profitable, expand their portfolios and expand into new jurisdictions. In the past, this has been a sticking point with smaller off-grid energy and irrigation companies failing to raise sufficient financing and thus going bankrupt, leaving customers in the lurch.
At SunCulture we have been working to address this by seeking to raise sufficient funds for our ambitious scale-up program, which will position us well to maximize and diversify our revenue streams across multiple countries and hundreds of thousands of customers. In light of this, we recently announced the closing of a $27.5 million Series B financing round that was oversubscribed. SunCulture is fortunate to have a wide range of new investors, including Reed Hastings, InfraCo Africa Limited, Acumen Fund, the Schmidt Family Foundation and others.
The challenges are real and complex, but we cannot afford to wait for the perfect model. Farmers need solutions now and we strive to provide these solutions.
About the author: Samir Ibrahim is CEO and co-founder of SunCulture.
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