News and Updates

News

31 October 2024: Powering Renewable Energy Opportunities (PREO) is excited to announce the winners of its latest innovation funding round, marking a significant milestone in extending the programme’s impact to Pacific Island Countries. Following a competitive call for proposals, seven innovative companies across six Pacific Island Countries (PICs) - Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu - have been awarded grants of between £53,000 and £200,000 each, totalling £918,100.

This catalytic funding will support the development of productive use of renewable energy (PURE) enterprises, enabling communities to test and prove income-generating activities and drive sustainable and inclusive economic development.

The funding award was announcedby Rt Hon David Lammy MP, Secretary of State for Foreign, Commonwealth and Development Affairs for the United Kingdon as part of a wider support package for Pacific Island Countries during the Commonwealth Heads of Government Meeting (CHOGM) in Samoa. This support is part of the Ayrton Fund for clean energy innovation via the Transforming Energy Access (TEA) platform.

Supporting and scaling pivotal innovations in Pacific Island Countries

Pacific Island Countries face significant climate vulnerability due to rising sea levels, increasing storm intensity, and changing weather patterns, which threaten their ecosystems, economies, and livelihoods. These nations, often reliant on expensive imported fossil fuels, are particularly susceptible to the impacts of climate change, making energy affordability and security a critical issue.

This cohort of innovative, renewable energy businesses presents a crucial opportunity for the region, enabling PICs to harness local resources such as solar energy to drive forward green growth and a just energy transition. By moving to sustainable energy solutions, PICs can enhance resilience, reduce dependence on imported fossil fuels and create green jobs, ultimately fostering inclusive economic growth and environmental sustainability in line with national plans and policies.

The seven companies selected to receive funding* will research and develop a range of solutions to harness renewable energy for productive uses. They include:

Fiji

SDG Changemakerswill test the viability of using solar-powered processing units in the coconut value chain in Fiji, while developing the downstream market of processed coconut by-products. They will manufacture a fit-for-purpose mobile processing unit and solar-powered dryers then test three business models with local farmers and communities including exchange, micro-financing and lease-to-own models.

Blackfrog Technologies will develop Emvólio, a patented rapid cooling technology for safe last-mile transport of vaccines, insulin, breast milk, bloodserums, medications and specimens with minimal thermal shock. Unlike conventional refrigerators, this technology is highly energy-efficient and stands to make a significant impact in the transportation of vital healthcare supplies.

Papua New Guinea

PNG Women in Agriculture Development Foundationaims to demonstrate the financial and technical viability of solar-powered cold chains in Papa New Guinea’s horticulture sector, with a focus on women as equal partners for empowerment and development.With this funding, they will deploy a solar generator, two solar-powered refrigeration systems and one solar-powered ice maker that will produce ice for post-harvest, protecting the integrity of produce.

Samoa

Sunshine Pacific will install a solar system to power a 16-acre commercial space for agri production, providing energy to an 8-acre hydroponics farm and an 8-acre poultry operation. This aims to demonstrate the financial and technical viability of the productive use of renewable energy solutions in agri-processing and will improve food security, create green jobs and support economic development.

Solomon Islands

Superflydesigns solar systems for remote areas in hot climates aiming to address the low electrification rate (25%) across the Solomon Islands. Superfly will distribute 100 Koolboks 208 litre solar-powered freezers on a PAYGO basis to rural fisheries and canteens across nine provinces in the Solomon Islands. The project will test whether PAYGO financing of improved cold chains between islands can viably boost returns for farming and fishing, attracting further investment and replication.

Tonga

Motu Juice is testing innovative off-grid portable mini-factories powered by solar energy and biomass boilers. The project involves testing a factory capable of producing 260,000 litres of coconut milk annually. Coconut milk is a staple in Tongan cuisine, but the country currently relies entirely on imports resulting in higher prices. Operating on a franchise model, Motu Juice will support local management to use their mini-factories to produce viable domestic supplies, which also expect to enhance disaster response, boost local employment, and foster community growth and skill development.

Vanuatu

Vanwods was established as a network dedicated to eradicating poverty by empowering women in rural villages with the opportunity to start, grow and maintain sustainable, income-generating micro-enterprises. With PREO support, the company will provide subsidised solar appliances – such as solar-powered deep freezers, sewing machines, and water pumps – to women-led micro, small, and medium businesses in the northern islands of Vanuatu – improving livelihoods through harnessing solar energy solutions for income generation.

Angus Vantoch-Wood, PREO Programme Director at the Carbon Trust, commented: “This expansion represents PREO’s first move beyond sub-Saharan Africa, bringing its mission to foster renewable energy-driven economic growth to the Pacific region. By showcasing the viability of innovative business models, PREO is driving productive demand for renewable energy, unlocking economic opportunities while strengthening climate resilience in some of the regions most impacted by climate change.”

This phase of PREO funding supports a broader mission to promote climate resilience, economic growth, and job creation. By strategically supporting innovative companies with catalytic grant funding and technical assistance, PREO helps scale impactful projects, enabling businesses to adopt clean energy technologies, improve livelihoods, and reduce reliance on fossil fuels.

PREO also receives funding from the IKEA Foundation, alongside the UK government and is managed in partnership with the Carbon Trust and Mercy Corps-Energy 4 Impact. Since its inception in 2019, the programme has awarded £8.9m to 54 SMEs in sub-Saharan Africa and the Pacific Island Countries.

News

£2.2 Million Awarded to Groundbreaking Initiatives as PREO Advances Commitment to Productive Use of Renewable Energy Solutions Across sub-Saharan Africa

The Powering Renewable Energy Opportunities (PREO) programme has committed over £2 million in catalytic grant funding for its fourth round, supporting diverse innovative business models across sub-Saharan Africa. Fourteen companies have been selected through a competitive open call, each focused on harnessing clean energy and driving a just, inclusive energy transition throughout the region.

This latest round of funding builds on a wider package of support that PREO has committed since its inception, having awarded over £5.94m to 34 companies across 11 sub-Saharan African countries, creating 467 jobs. The programme is backed by the IKEA Foundation and UK aid via the Transforming Energy Access (TEA) platform, in partnership with the Carbon Trust and Mercy Corps’ Energy 4 Impact.

More than 240 applications meeting the call’s core criteria were submitted from 29 countries, equating to a total funding request 17 times greater than was available. This response underlines the substantial demand for funding to support and scale innovative business models that drive the adoption of renewable energy solutions.

With each company receiving between £86,000 and £237,000 across 1-2 years, along with technical support, PREO is supporting the development of business models that showcase the viability of Productive Use of Renewable Energy (PURE) in agri-processing, cooling, solar irrigation, e-waste recycling, e-mobility, healthcare, and education.

Highlighted initiatives in this phase include:

• Simusolar, a Ugandan supplier of solar-powered agricultural equipment, enhancing productivity for smallholder farmers through solar irrigation solutions.
• AG Energies, offering a battery-swapping service for electric tuk-tuks and motorcycles in Tanzania.
• Jokosun, improving operations for local fishers in Senegal by providing hubs for charging and distributing batteries for electric boats.
• SLS Energy, implementing an ‘Irrigation-as-a-Service’ model with rechargeable battery packs and electric pumps for smallholder farmers.
• Farm Warehouse, piloting an e-commerce application for processed products from smallholder farmers while distributing productive use equipment and providing warehousing for produce.
• Chaji, installing fast EV chargers in commercial centres and developing financing options for electric three-wheelers in Nairobi and Mombasa.
• Hinckley E-Waste, developing second-life batteries to power telecom towers, reducing reliance on diesel generators in Nigeria.
• ICE Solar, providing rooftop solar solutions to Micro, Small, and Medium Enterprises in Nigeria through subscription models, while also training local youth.
• Drop Access, introducing VacciBox to market, a solar-powered cooling service for health facilities in Kenya, aimed at increasing vaccination rates and reducing vaccine waste.
• Acele Africa, repurposing 125,000 discarded lithium cells into second-life batteries for solar applications.
• Strathmore University, working with its spin-out company Evonet to validate Sunsafe, a mobile app designed to address inaccurate solar system sizing in rural Kenya.
• Mazi Mobility, conducting a study on battery swapping stations as a viable business model for e-mobility in Africa.
• Ecobora, implementing a Cooking-as-a-Service model and installing solar-powered cooking boilers in schools to replace firewood.
• Inter Ethiopia Solutions, enhancing access to renewable energy while refurbishing discarded electronic equipment.

Resilience, Growth and Livelihoods

This phase of PREO funding aligns with a broader mission to foster climate resilience, economic development, and job creation in sub-Saharan Africa. By taking strategic risks on innovative companies, PREO not only scales impactful initiatives but enables businesses to leverage clean energy technologies, improve livelihoods, and reduce dependency on fossil fuels.

Richa Goyal, Programme Manager at the IKEA Foundation said:
“With this latest round, PREO reaffirms its role as the only dedicated platform for testing business models that focus on productive use of renewable energy. The selected innovations have the potential to transform sectors by delivering first time clean energy access to businesses and institutions.”

Rhiannon Turner, PREO Programme Lead at the Carbon Trust added:
“We are excited to announce the latest line-up of new companies to be supported over the next phase of PREO. As demonstrated by the breadth of sectors and technologies represented there is an enormous opportunity to prove the viability of business models that will help drive income creation and improve livelihoods in sub-Saharan Africa.”

PREO is supported by the IKEA Foundation and UK aid via the Transforming Energy Access platform, delivered by the Carbon Trust and Mercy Corps Energy 4 Impact. Since 2019, the programme has made significant contributions to advancing productive use of renewable energy, and its latest report ‘Powering Prosperity: The socio-economic benefits of the productive use of renewable energy (PURE) in Africa’ highlights the impact of these interventions.

News

Few know better than farmers what it is to depend on the weather. In most areas of Zambia, there is no rain for almost half the year, falling mostly between December and April. And when the rains do come, they are increasingly unpredictable.

Unless you’re a commercial farmer and can afford the necessary irrigation during the dry season, this can leave you with only one annual crop. Land lays unproductive for months, and the only harvest is one of hardship. Farmers must find other ways to earn an income or stretch out what income they make. January to March are the most difficult months in rural Zambia. By then, farmers have sold their rainfed crop and used the money to buy what they need to plant anew in December, in time for the next rains. With funds in short supply, there are difficult decisions to be made – including not having the money to send children to school.

The wider context is that, according to the UN, Zambia is among the countries with the highest levels of poverty and inequality worldwide. More than half of the country’s population still lives below the poverty line, with a high proportion of those people living in rural areas. Access to energy is variable across the country. As highlighted by the World Bank, only one in ten households in rural areas have access to electricity, and economic growth can be closely linked with energy access.  

It was against this backdrop of particularly complex challenges that an enterprising group of farmers in Chipata, eastern Zambia, quite literally saw an opportunity for growth.

Their response was to band together and fill one hectare of usually empty fields with neat rows of verdant onions – with the aim of increasing their number of harvests, and bumping up the money they earned. To keep their crop watered in the dry season, they harnessed the power of the sun with solar-powered water pumps.

The farmers’ story is as multilayered as the vegetable they nurtured – one of setback and success, lessons learned and solutions found. But at its centre is essentially the spirit of trying something new.

Planting a seed

The high value crop initiative’s roots lie in Good Nature Agro (GNA), a social enterprise in Zambia that started in 2014 with a mission to improve farmer incomes through the production of legume seeds, a crop grown in the rainy season. GNA has 4,400 local smallholder seed farmers on its books, 40% of them women. GNA seed growers have seen what they earn go from an average of US $113 per season in 2014, to US $591 in 2019. GNA’s hope for operation onion was that farmers could earn up to ten times their annual income without needing to expand the land they farmed.

To realise this ambition, GNA secured funding from the Powering Renewable Energy Opportunities (PREO) programme, supported by the IKEA Foundation and UK aid via the Transforming Energy Access platform. The resulting project – Multiply Harvests and Transforming Lives through Solar Powered Irrigation (MHTL) – was delivered with support from the Carbon Trust and Energy 4 Impact.

Growing in experience

In April 2022, after the rains had come and gone, and the farmers with GNA contracts had harvested their legume crops, their minds turned to onions. While usually working independently, farmers assembled in four groups with up to 10 people in each. The PREO grant was used by GNA to develop a financing package that included boreholes to be drilled for each farmer group and a host of other essentials the farmers would need. That included solar submersible pumps, drip irrigation kits, water tanks and tools, which the farmers agreed to pay back in three installments from the harvesting income over an 18-month period, ultimately gaining ownership at the end of the loan term. Grant money also went towards salaries for project staff and resources for training.

Farmers planted up the nurseries and by November, the drills had hit water, and the boreholes were in. But there was a hitch. There had been delays in drilling and the sourcing of drip irrigation kits, but the onions had already been bedded into the fields. To the frustration of the farmers, around half of the plants were lost due to the lack of water.

Farmers received training from GNA staff and the onion seed suppliers, along with the company supplying the solar pumps, on the most effective ways to use the equipment. Each group had a ‘champion’ charged with operating the equipment and carrying out basic maintenance. An agronomist was also on hand to provide advice, including how to spot pests and diseases.

Harvesting began in December and soon, 15 metric tonnes of ruby-red Syngenta Red African Queen and pearly-white Hazera Saturn onions were hanging in the thatched drying sheds built by the farmers. For the first time in the history of GNA, they were harvesting in December. For many farmers, it was the first time they had two harvests in a year.

But there were hard lessons to be learned. Not only was there the earlier delay that led to the harvest coinciding with the rainy season, once the rains were in full flow, some onions were lost in the drying sheds because of the weather. More spoiled in GNA’s warehouses, which had been designed for optimal storage of legumes, and were not well suited to storing onions. After more setbacks due to the quality of the onions and the way they were transported, and how far they had to be transported to market, the original buyer passed on the opportunity. As much as half of the onions produced were lost due to customer rejections and inadequate post-harvest handling methods. For the remaining onions, another buyer was found, but at a lower price. Despite these setbacks, it proved there was a market opportunity, as 8 tonnes of onions were sold, generating revenues of ZMW 64,000 (US $3,500) for the farmers.

Knowing their onions

Fast-forward to late 2023 and the group of farmers have just enjoyed their second solar-irrigated onion harvest using the knowledge gained from their previous experience. Even as the price of onions reduced to ZMW 7 (US $0.30) per kilo from ZMW 8 per kilo (US $0.35), the yields more than tripled. The set of four farmer groups harvested 50 tonnes of onions (compared to 15 tonnes in the previous irrigated season) and have successfully sold them to three buyers. As a result, by cultivating on just four hectares of land, the four farmer groups generated revenues of ZMW 350,000 (US $16,6000. This was 33% more than what they earned from the rainfed season earlier this year, where they cultivated at least 10 times the amount of land used for growing onions. The farmers plan to add a third irrigated crop to their portfolio in 2023: maize. GNA has also been enrolled as a supplier with Freshmark, which distributes products to major supermarket chain Shoprite. This means a continued demand for their crop moving forward.

Melina Banda and Limbikani Phiri are two farmers who have seen massive changes in their lives as a result of the project. “The big difference onions have made is receiving money in a time of year when one does not expect to receive money,” says Melina, a mother of four. “This was the first time in my life to make money in rainy season.” Melina adds: “Previously, after April and May when we harvest field crops, we had nothing to do but just stay waiting for rains. But now we are busy all year round working in our onion field.”

Limbikani, who lives in a household of 17 family members, has also seen an increase in what he earns. He says the family can now afford school fees and food, and they have been able to fence their farm. He has high hopes for the new harvest. “This year I am expecting 20 metric tonnes of onions and my income will be more than what I have made in all my farming life.”

Both farmers have also been able to hire workers to help them on their farms, further extending the benefits through creating additional employment opportunities in the local economy.

But it’s not just financially that the farmers have benefitted. Limbikani, who hadn’t used solar irrigation before, became one of his group’s champions and his confidence has increased. “I feel well trained and now I call myself an all-season farmer.”

For Melina, the feeling is similar. “The project has made us feel respected in the community as we are the only ones who have crops in the field this time of the year,” she says. “I have also learnt how to connect drips and people in my village get surprised to see a woman connecting drip lines and operating a pump.”

Another positive outcome of the project has been access to clean water from the boreholes. As Melina observes: “No more travelling a long distance to fetch water, and also less stomach diseases ever since the borehole was drilled.” Limbikani agrees: “We used to boil water for drinking but now the water is so clean.”

The farmers are clearly optimistic about one day owning their equipment too – along with the prospect of making a good income from their land all year round. “It feels very good,” says Limbikani, adding, “it's exciting to have three harvests in a year and for different crops.”

Increasing the number of harvests also gives farmers the reassurance of having a safety net in the face of climate change, when the weather during the rainy season can be unreliable. “The global warming has raised [the] temperature here and so just a few days without rains during the rainy season, we end up losing a lot of crop,” says Limbikani. Melina highlights that the opposite is true, too: “Like last year we had too much rains hence most [of the] crop started to rot…” She adds that because of the unpredictability, yields are “usually low compared to when I was young.”

As another cohort of farmers embark on the programme, expansion is on the cards. Maize, squash, garlic and ginger… who knows what other possibilities the future holds for these enterprising farmers. Perhaps it’s time the farmers adopted a new motto: when life gives you lemons, grow onions.

*Currencies accessed on Xe.com; Conversion rates are sourced from the time of transaction 

News

SokoFresh is a Kenya-based for-profit social enterprise specialising in affordable pay-as-you-go cold storage and market linkage services for rural communities engaged in perishable commodity production. The shortage of refrigeration infrastructure results in significant product and financial losses for farmers and food producers in off-grid markets. Through its services, SokoFresh aims to manage the entire logistics chain of high-value perishable produce, from farm to market.

Support from PREO in the form of a grant in 2021 played a pivotal role in establishing SokoFresh as the leading cold storage provider in Kenya’s horticulture value chain, following the successful pilot of its farm-level cold storage service, coupled with a digital market linkage platform that integrates small and medium-scale farmers into professional value chains.

Sokofresh collaborated with EcoZen, a developer of climate-smart deeptech who served as a technical partner, on the development of a cold storage prototype – capable of reaching temperatures as low as -18’C. This enabled SokoFresh to pilot its cold storage services for the fish industry. In April 2023, SokoFresh secured additional grant funding from PREO to assess the viability of cold storage as a service for small fisheries on Lake Victoria. While the pilot did not yield the anticipated results, it provided valuable insights and lessons that SokoFresh is eager to share in this interview.

Q: Could you elaborate on your intended project goal and what specific objectives you initially set out to accomplish?

A: SokoFresh, along with incubator and majority shareholder Enviu, invested funding from PREO with the aim of reducing food loss in the fish industry, by deploying sub-zero cold storage technology through a commercially viable model. The model was to provide both cooling as a service and market access to fisherfolk.

Our specific objectives were:

• Reduce food loss through the aggregation of fish from multiple beaches, store them in cold storage, and provide market linkage for the fish.
• Increase fishers’ incomes through supply chain interventions such as cooling, logistics, and use of crates, ensuring streamlined operations and connecting them to markets.
• Access to productive use of energy cold chain solutions, and activation of off-grid cold storages in identified regions.
• Develop a commercially viable proposition for SokoFresh with a clear pathway to profitability.

Q: How did your approach to the pilot evolve from the initial idea, leading to the testing of other business models?

We started by assessing the fish landscape in Kenya to pinpoint areas where cooling interventions would be most effective. We conducted an issue analysis focusing on the post-harvest fish loss, regional production characteristics, systemic gaps, and proposed pilot models. Following that, we developed three models for testing (Figure 1):

• Cold storage as a service
• Cold storage and market linkage as a bundled service
• Leasing the cold storage unit on a monthly basis.

Figure 1

To begin the pilots, we defined their scope. We chose tilapia as it is the most commonly farmed fish in Kenya, representing 80% of total fish production, indicating high availability and stable supply. Homabay County was selected as the initial pilot location because it serves as a primary landing site for fish, particularly tilapia. In addition, Homabay has the highest aquaculture concentration, with over 1,500 cages, due to its deep waters.

We then spent a few weeks observing and documenting beach operations. We quantified the boats at each beach, the volume of fish sold, and the buyers involved.

Once we identified the beaches with high activity, and the fishermen’s needs, we prioritised testing the ‘full-service’ business model, and ‘cooling as a service’ business model, reflecting the demand for such services. The results from this are detailed below.

After the full-service model was disproved, we moved to testing the cooling as a service business model. This was also disproved quickly, prompting us to pivot towards offering the lease solution.

Q: Can you tell us more about the three pilots and what you learned from them?

A: Sure. In piloting our first business model for ‘market linkage and cold storage as a bundled service’, we used lean methodology, which requires running experiments in cycles and using data to measure progress, before investing more resources into additional testing.

We leased space at the intersection of two beaches (also centrally located from other beaches) and began to purchase fish from over 100 boat owners across 7 beaches. We also engaged around 75 cage fish farmers as an option to provide cold storage as a service. Between June and December 2023, we made a total revenue of 18,000 USD and sourced 7,300 kg of fish.

Our pilots with this model showed that there was not sufficient demand for such a solution amongst fisherfolk at this time. The demand for cold storage & market linkage among 144 wild catch boat owners, over a period of 3 months was low. The average purchase of 8kg of fish per week despite high season, proved unsustainable. We were also faced with consistently low retention rates (average 10%, see Figure 2), indicating a lack of interest/ demand for our services.

Figure 2

As for the demand for cold storage & market linkage among 74 cage farmers, we found that 60% of them were vertically integrated. This means that they were able to harvest on-demand, as buyers came to offtake, indicating no need for our solution when you have just-in-time operations. In addition, each farmer could have several market options to choose from, which enhanced their bargaining power.

In piloting our second business model for cooling as a service, we also experienced a lack of demand for such a service due to low adoption and retention.  

For fisherfolk during the off-season, the catch is sold as soon as fish arrives on the beach, eliminating any need for cooling. During peak season when fish is abundant, ice and chest freezers serve as viable alternatives, particularly for individual operations with narrow profit margins. In our pilots, we trained and signed up 10 fisherfolk, but only one person actually used our cold storage service, so we ultimately decided to discontinue it.  

As for the demand for cooling from off takers, we noticed that some micro traders attract better prices for fried fish compared to cooled fish, prompting them to value-add instead to extend shelf life. We also found that bulk buyers of fish have their own refrigerated trucks and use these to aggregate at shore and transport to markets, obviating the need for our solution.

In our final pivot, we trialled the lease model where the unit is leased to 3rd party suppliers. In this case, we had some traction.

There is demand for sub-zero leasing, mostly among meat/ fish aggregators who want to aggregate produce from multiple farmers. They sell locally and business is fast-moving. They also typically have market opportunities already activated. Currently we are in the process of contracting one client who is a fish farmer/ aggregator at Lake Victoria.

Q: Can you describe some of the challenges faced during the project and how Sokofresh/Enviu adapted to them?

A: We faced several challenges:

Delayed cold storage deployment – Our cold storages were delayed by nearly 5 months due to it being the first unit of its kind produced by Ecozen. We also had shipping delays. This affected pilot timelines significantly. Our work around for this was to use ice as a substitute, and sell fish purchased quickly. For experiments, this work-around was sufficient.

Logistics challenges – Refrigerated trucks were not easily available and when available they were very expensive. We adapted to this by identifying several logistics providers, travelling overnight, planning, and booking in good time.

High costs - The equipment, together with the ice required to ensure fish met required quality standards, comprised 61% of our direct operational costs. This disproportionate figure made the service offering unsustainable.

Lack of documentation on ownership of fish – A surprising discovery was that the fish were owned by boat owners (relatively enterprising and commercial) and all profits on fish efficiencies would be passed to them. This meant that fishermen who were our target beneficiaries would not benefit from Sokofresh’s solution, putting our impact goal at risk.

Seasonality challenges – We faced delays in experiments due to seasonality, as we had to wait months for peak season. This caused substantial delays in our work and conclusions.

Lack of market demand for Kenyan fish – What became evident during the experiments was the preference of Kenyan offtakers for fish from Uganda, perceived as higher quality compared to locally farmed fish, and also cheaper and more consistent. Kenyan-caught fish was primarily sold to micro traders who had a low threshold of price point. Our workaround for this was initially to activate strong business development consultants to help us unlock markets, however these did not produce any key leads.

Local dynamics on the beach – We also learnt of dynamics on the beach regarding access to the fish supply. One aspect is the high competition for fish especially during low season. Another is the tendency of boat owners not to sell their full catch to one client but to distribute fish sales among multiple buyers to keep them “warm” and mitigate risk from losing individual buyers.

Lack of accurate information on post-harvest loss – Whilst there is conflicting information regarding post-harvest loss for fish (thought to be between 40% and 10%), it was only during experiments that the actual lack of loss became apparent. Through market observation, fish purchases, and witnessing the sale of fish, it became clear that all fish, even those of poor quality (an unexpected discovery), were fried and sold. This finding from our experiments prompted us to question whether we were addressing a real problem and if there was demand for our solution in the market.

Q: What lessons can other companies and the broader sector draw from this project, and which unexpected lesson was the most surprising to you?

A: We learned that the industry operates primarily in an informal manner, with 78% of fish caught by small-scale fishermen who are extremely poor, and untrained. As it lands the fish is already purchased by informal brokers, who take it directly to markets. These informal middlemen provide 94% of market linkage. The absence of regulation in these operations makes it challenging to enforce quality control standards among both fishers and traders.

This informality translates into narrow profit margins within the industry. The limited profit margins provide limited opportunities to incorporate cold chain technologies and aggregation services. Ice is widely used as a cost-effective alternative for cooling, and with slim profit margins, it effectively addresses the cooling needs. Margins for aggregation and cold storage hover around 5%, presenting a formidable barrier to market entry. Larger companies circumvent this challenge by vertically integrating their operations, encompassing fishing, aggregation, value addition, and sales to the final consumer.

The problem of aggregation is solved through cage farmers, who supply volumes exceeding 300 kg. Interestingly, in several instances, cage farmers were observed to sell their produce at prices higher than the offtake prices, indicating a lack of demand for market linkage solutions.

The ability to directly impact small-scale fishermen is limited as they are typically employed by boat owners. Therefore, any increase in income for fishermen would rely on a trickle-down effect to benefit small-scale fishermen.

Q: How will you use the findings from this pilot to continue SokoFresh's impressive trajectory moving forward?

Moving forward, we'll use the sub-zero cold storage units to trial the lease model and assess its traction, not necessarily within the fish industry, but also in other sectors that could be a lucrative option or new business line for SokoFresh.

News

An open call, announced today, is offering grant funding up to £200,000 per project to support productive use of renewable energy (PURE) enterprises to demonstrate and strengthen their business models to scale their impact in Pacific Island Countries.

The open call marks the first expansion of Powering Renewable Energy Opportunities (PREO) beyond sub-Saharan Africa, widening its focus to include Pacific Island Countries-focused projects, with the support of UK aid through the Transforming Energy Access (TEA) platform. This opportunity is the second of three planned PREO funding rounds, with over £7m dedicated for catalytic grants over next four years to support innovative, renewable energy-based projects, working to improve incomes, build climate resilience and reduce reliance on fossil fuels.

Proposals for projects to be delivered in any of the following countries: Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, Vanuatu, will be considered for selection to receive grant funding between £50,000 – £200,000. To be eligible, projects must be locally-relevant, addressing demonstrated needs of the population in the target country. They must also be targeting the commercial viability of a productive use of renewable energy (PURE) product and/or service – encompassing for example agricultural, commercial and industrial activities that generate income and are powered by renewable energy.

Angus Vantoch-Wood, Senior Manager at the Carbon Trust, leads the delivery of the programme.

 “Over the past four years PREO has proven to be an effective springboard for African innovators focused on accelerating the productive use of renewable energy. The impact of PREO-supported projects on local job creation and emissions reduction has demonstrated what is possible through catalytic funding and tailored support, and paves the way for the further expansion of this impact. We are excited to be on the cusp of broadening the focus of PREO to Pacific Island Countries though this latest funding opportunity.”

PREO’s mission is to support enterprises harnessing renewable energy to improve incomes, build climate resilience and reduce reliance on fossil fuels. Since the programme’s inception in 2019, it has successfully awarded over £5m in grant funding from UK aid and the IKEA Foundation to 34 projects across 12 sub-Saharan African countries. Alongside grant funding, the programme has also provided technical assistance to a further 20 companies through dedicated sector specialists and will continue to provide this alongside the new round of grants. Across the 34 projects supported so far with catalytic grants, a total of £24m in public and private follow-on capital has been raised. 

An example of PREO’s impact is Ashden Award-winning enterprise SokoFresh, which provides farm level cold storage-as-a-service, coupled with a digital access-to-market platform to integrate small and medium scale farmers into commercial-scale supply chains. PREO funded SokoFresh’s first two cold hubs for horticulture, and subsequent expansion into fishing. The Kenyan company has demonstrated a 27% reduction in post-harvest losses and generated 13 jobs as a result of this project. Following the success of the PREO-funded project, SokoFresh has been able to expand its reach and set up cold storage hubs in five additional counties in Kenya: Garissa, Nyeri, Makueni, Kiambu and Tharaka Nithi.

Denis Karema, Co Founder and CEO at SokoFresh said;

“Support from PREO has been crucial in the start-up phase of SokoFresh. Coming out of the research phase, PREO gave us the opportunity to set up the first pilots. We were able to purchase the first 2 cold storages with the contribution of PREO funding, build an MVP for the market linkage platform, and get the concept from ‘on paper’ into reality. Once we were up and running, it was quite easy to convince others of the need and viability of what we’re doing. PREO was absolutely catalytic to proving the concept in real-life and bringing us to the next stage.”

Interested innovators should visit the PREO website to download the full application pack.

Since 2019, PREO has been supported by the IKEA Foundationand UK aid via the Transforming Energy Accessplatform and delivered by the Carbon Trustand Mercy Corps Energy 4 Impact. For more on PREO’s impact to date, download the latest report ‘Powering Prosperity: The socio-economic benefits of the productive use of renewable energy (PURE) in Africa’

News

Immediate release: 30 November 2023: An open call to innovators, out today, is offering a share of €3.6million to help scale start-ups which support people and the planet.

This is the first of three rounds of funding planned through Powering Renewable Energy Opportunities (PREO), with over €8m in grants available over the next four years to support innovative, renewable energy-based projects, improving livelihoods and aiding job creation. The initial open call will concentrate on businesses focusing on Africa with future rounds expanding PREO’s geographic reach to Asia and the Indo-Pacific regions.

To be eligible, applicants must be piloting a new, or pivoting an existing business model and be able to demonstrate the viability of a solution that focuses on the productive use of renewable energy, with the grants used to scale these business models and innovations. Priority sectors include agro-processing, cooling, solar irrigation, e-waste recycling, textile production, e-mobility, education, healthcare, ICT and street lighting.

PREO’s overall mission is to help businesses harness clean energy to improve incomes, build climate resilience and reduce reliance on fossil fuels. Since the programme’s inception in 2019, it has successfully awarded over €6.3m in grant funding to 34 projects across 11 sub-Saharan African countries, leading to the creation of 467 full and part time jobs.

Alongside grant funding, the programme has also provided technical assistance to a further 20 companies through dedicated sector specialists and will continue to provide this alongside the new round of grants.

Jono West, Director of Partnerships at Mobile Power, a company that received a PREO grant to help scale up its off-grid electric vehicle services.

He said, “PREO’s funding and technical support was invaluable to undertaking those early field trials. This enabled us to iterate the technology and business model. As a result, we have developed a business model that is attractive to taxi riders growing our rental numbers to over 500,000 every month and 2,000 new customers every week.”

Contributing to PREO’s impact is Ashden-award-winning enterprise SokoFresh, which provides farm level cold storage-as-a-service, coupled with a digital access-to-market platform to integrate small and medium scale farmers into commercial-scale supply chains.

PREO-funded SokoFresh’s first two cold hubs for horticulture, and subsequent expansion into fishing. The Kenyan company has demonstrated a 27% reduction in post-harvest losses and generated 13 jobs as a result of this project.

Jon Lane, Associate Director at the Carbon Trust, leads the delivery of the programme.

He said, “PREO has been extremely effective over the past four years, providing a real boost for African innovators focused on accelerating the productive use of renewable energy. Seeing the impact that PREO-supported projects have made in increasing job creation and reducing emissions is inspiring and sets the tone for more success in this next phase.  Further funding from the IKEA Foundation alongside the existing commitment from UK aid via the Transforming Energy Access platform demonstrates this value and a commitment to future innovators and we are excited to be expanding our focus to Asia and the Indo-Pacific in the coming phase.”

Innovators can use PREO grant funding for activities including covering the upfront capital costs of initial field units, operational expenses, building capacities, and designing information systems. As a result, the innovators have the potential to successfully demonstrate positive unit-economics, refine and improve their business model, and gather critical business data needed to back up the business plan and attract sufficient commercial capital that would otherwise materialise far more slowly.

Across the 34 projects supported so far, a total of €26m in public and private follow-on capital has been raised. For example, Roam, a Kenya-based e-mobility company has gone on to secure significant further funding. In 2021, during its PREO project, Roam closed a $7.5m (USD) funding round, the largest ever for an African electric mobility start-up, as well as opening an electric motorcycle assembly plant in Nairobi. The company was also  a finalist in the 2022 prestigious Earthshot prize and is named one of TIME’s 100 Most Influential companies for its efforts towards electrifying transport in Africa. 

Since 2019, PREO has been supported by the IKEA Foundation and UK aid via the Transforming Energy Access platform and delivered by the Carbon Trust and Mercy Corps Energy 4 Impact.

The IKEA Foundation has committed a further €7.2m alongside the existing £5m commitment from the UK Government via the Transforming Energy Access platform to PREO for another four years, with additional calls planned for 2024 and 2025.

Jolanda van Ginkel, Programme Manager Renewable Energy at IKEA Foundation commented, “PREO is supporting companies across Africa to test, build and replicate renewable energy solutions that deliver results for people and the planet. The IKEA Foundation is proud to support the programme and welcomes today’s open call to sub-Saharan African innovators. We look forward to its expansion to Asia and the Indo-Pacific in coming rounds.” Interested innovators should visit the PREO website to download the full application pack

News

In the arid region of Somaliland, rain-fed agriculture dominates the farming landscape, as irrigated farms make up a small fraction of cultivated land. However, mounting water scarcity, a consequence of climate change, is making rain-fed farming increasingly unfeasible. Moreover, surging energy costs have placed irrigation, typically powered by diesel-based systems, beyond the means of local farming communities. This situation puts pressure on food security and underlines the urgency for affordable, sustainable crop irrigation solutions, especially as food demand surges.

Established in 2016 in Somaliland, ClearSky Power is dedicated to addressing the escalating energy needs of the region through advanced renewable energy solutions. In February 2021, the company was selected to receive support from PREO in the form of a grant, to demonstrate the financial viability of selling solar photovoltaic drip irrigation systems to local farmers on Shariah-compliant financing terms - a previously unavailable option for renewable energy products. This approach combined productive-use technologies with tailored financing, ongoing servicing, maintenance, and support for additional value-enhancing applications. The project's goal was to shift from expensive diesel-based power to decentralised solar energy – curbing energy costs, boosting farm productivity, and optimising water usage.

Over two years, the project has achieved significant success, prompting the company to set its sights on scaling up. ClearSky Power aims to expand its impact by deploying solar photovoltaic drip irrigation systems across an additional 20 farms.

In an exclusive interview, Frederic Caron, the Managing Director at ClearSky Power, shared insights into the project's accomplishments and the valuable lessons learned from its execution.

Q: What were ClearSky Power's objectives for this PREO project, and have they been realised according to the original plan?

The significance of smallholder farmers in Somaliland's economy cannot be understated, as their ability to yield successful harvests directly impacts the region's food security. When these farmers face production challenges, Somaliland's population is left with no choice but to resort to costly imported produce. In an effort to bolster farming communities, ClearSky Power sought the support of the PREO programme with a multi-faceted vision:

• demonstrate the technical and financial feasibility of photovoltaic powered drip irrigation systems for Somaliland's agricultural landscape;
• establish a financially sustainable and scalable model involving local banks directly financing farm owners to procure irrigation systems and facilitate a two-year payback period;
• construct a compelling business case supported by a comprehensive proof-of-concept to be shared with Microfinance Institutions (MFIs) and the broader spectrum of investors in clean-energy agriculture.

In practice, ClearSky Power has successfully designed and implemented photovoltaic drip irrigation systems for over 10 Somaliland farms, with projections to extend this number to 20 by the end of December 2023. Furthermore, we have initiated dialogues with MFIs and financial intermediaries to galvanise financial backing tailored to farmers' needs. Recognising that traditional banks often regard farming as high-risk, thereby offering farmers less favourable financial terms due to a lack of familiarity with both the sector and the technology, ClearSky Power has directly extended financing to farmers with a two-year repayment timeline. The opportunity to engage directly with farmers during both the implementation and financing phases has allowed us to develop a deep understanding of the technical, financial and economic aspects of this pioneering project.

Q: Can you elaborate on the challenges encountered during the project and provide insights into your suggested strategies moving forward?

The implementation of our project encountered several challenges that prompted us to adopt creative solutions:

1. Stringent MFI terms – Securing upfront capital for investing in new technology remains an ongoing challenge for farmers. Among the farmers involved in the project, 90% opted for financing. However, despite our efforts to collaborate with local banks and enhance financial access, we found that MFIs impose strict conditions that are unfavourable to farmers. MFIs lack financial products specifically tailored for the agricultural sector, applying instead conventional financing terms. These include credit assessments based on credit history, a process that clashes with the reality of farmers relying on seasonal harvests for their livelihoods. Additionally, MFIs require collateral beyond their farmland, along with a guarantor to sign a notarized agreement in the event of payment default.  These conditions have proven to be too onerous for farmers.

To move the projects forward, ClearSky Power opted to provide farmers with direct financing options, structured with monthly repayments. ClearSky Power developed its own financing terms and made them as simple as possible for farmers to understand. These involve different ways of evaluating creditworthiness, taking into account farmers' capability and commitment to achieving a steady yield; and using the installed system equipment as collateral in case of payment default. Going forward, ClearSky Power would support the adoption of more efficient terms and procedures for equipment repossession, along with enhanced credit-worthiness checks.

2. Late loan payments – While nearly half of our clients stand as testament to the successful extension of financing, the other half struggle to adhere to timely monthly payments. It's not uncommon for these clients to commit to payment dates. However, we often find ourselves in the position of having to chase payments or dealing with instances where payments fall short of overdue balances, and occasionally, no payment is made at all. This dynamic underscores a broader issue: despite our proactive communication through phone calls and face-to-face interactions, clients in financial constraints tend not to fulfil their commitments. This obviously has an adverse effect on ClearSky Power’s cash flow and monthly budgeting for overheads. It also taints the records of diligent farmers who have adhered to payment schedules or exceeded expectations, compromising our ability to showcase their creditworthiness to local micro-financing and lending institutions for potential project funding.

In light of this, we have formulated a 3-step action plan. First, we engage existing loan customers with outstanding balances, highlighting the impact of delayed payments, and reiterating their contractual obligations. The second step involves collaboratively setting a date for balance settlement, accompanied by clear guidelines. Finally, if balances remain unsettled beyond the agreed due date, the third step entails potential disconnection of services. While this strategy has yielded promising outcomes, including partial payments and balance clearances from some clients, a complete resolution to this issue is yet to be found. ClearSky Power also plans to strengthen its systems with remote monitoring and remote shutdown capability as a way of enforcing on-time payment.

3. Difficulty in Data Gathering – We faced some difficulty in gathering Key Performance Indicator (KPIs) data on incremental earnings. Farmers are not used to sharing their income statements and revenues and most of them are unwilling to share any data regarding revenue growth. To address this, we adopted a tailored approach, engaging farmers individually. We also conducted surveys covering farm aspects like land expansion and crop yield, enabling us to collect essential KPIs from initially reluctant farmers.

4. Marketing Challenges – Some challenges have come up during the marketing campaigns. Many Somaliland farmers are reluctant to make upfront payments when goods or equipment haven't arrived in the country yet. They would rather personally interact with all the equipment needed for the project before they commit to anything. ClearSky Power has found a solution to this by first identifying potential customers then importing essential inventory items. Secondly, our early market research highlighted a demand for case studies that substantiate the credibility and reliability of our systems. While this initially slowed our market penetration, farmers’ concerns eased following successful initial installations and live demonstrations. ClearSky Power intends to leverage these case studies to develop a more compelling marketing campaign.

Q: What are the key achievements of the project? To what extent does solar pumping contribute to enhancing the livelihoods of Somaliland farmers and what are the essential factors for realising this potential?

1. Women entrepreneurship at the nexus of agriculture and clean energy

In Somaliland, 80% of the local crop sellers in markets are women. After farmers harvest the crops, women entrepreneurs take the lead in selling produce such as lemons and watermelons at local markets. Traditionally, farmers give their produce to women on credit to sell, and women pay back the farmers while keeping a proportion of the revenue. However, recent diesel price fluctuations have made it difficult for farmers to wait to be paid, prompting tighter payment schedules for these women entrepreneurs. Solar pumping has helped by boosting farmers' yields and providing a steady harvest all year, ensuring a reliable food supply. Additionally, with affordable payment plans for solar pumps and reduced pumping costs, farmers have become more flexible and can afford to wait longer for collecting payments from women sellers, strengthening their position in the local food market. This combined effect of improved year-round yields through sustainable pumping solutions has fostered women's entrepreneurship and brought about positive community impacts.

 2. Enhanced agricultural yields and productivity

The PREO-funded project has revealed that solar pumps are responsible for a 40% increase in agricultural yields and heightened land productivity. Agricultural yields vary widely, depending on rainfall, insect infestations, and other natural phenomena, but solar pumping has helped to mitigate some of these challenges. The shift from diesel to solar energy has allowed farmers to pump more water throughout the day and strengthen their crop fields. In addition, the ability to operate the solar-powered pump for a prolonged period has also enabled them to expand the cultivated area, previously limited by the prohibitive cost of diesel. The farmers involved in the project now enjoy stable and improved agricultural production owing to enhanced yields from existing plots, the year-round diversification of crops, expansion of cultivated areas, and a rise in cropping cycles.

Remarkably, one of the supported farmers has doubled their farming land, while almost half of the other farmers have increased their farmland by at least a third. This expansion also applies to cash crops, as two-thirds of the farmers have integrated these crops into their farming plots. Reliable water access through solar pumping has been crucial for nurturing these extra crop types.

3. Increased revenues for farmers

The significant upfront cost of solar water pumping often led small-scale farmers to choose diesel- generators for their pay-as-you-go cost structure. However, improved financing options now enable farmers to overcome this adoption barrier. This shift has not only increased income from better agricultural production but has also resulted in savings through decreasing dependence on fuel.  Even farmers with limited generator use were previously spending between $100 and $300 USD per month on fuel. Additionally, the enhanced yield and consistent harvest have created extra income sources for farmers. Most of the farmers have witnessed a 40% rise in revenue. On average, each farmer enjoys an additional monthly income of $200 USD, along with a monthly reduction of $300 USD in fuel consumption.

4. Reduction in greenhouse gas emissions

 The farmers involved in the PREO-funded project have transitioned away from, or considerably minimised their reliance on diesel-operated systems for their farming operations. Initially, farmers with diesel generators were consuming around 100 to 400 litres per month, leading to emissions of about 1/3 to 1 ton of CO2 per farmer. This decreased reliance on fossil fuels in agriculture is crucial for the environment and aligns with Somaliland's move toward cleaner energy sources.

Q: What insights can your project offer to your company, as well as others in your industry, and the broader sector?

1. Women as early adopters

The pivotal role of women as early adopters of solar-powered drip irrigation remains a cornerstone of the project success in the community. Our first pilot centred around a woman-owned farm, and it has formed the backbone of our model’s proof of concept. Women often are seen as trusted advisors in many key aspects of Somali society and those venturing into entrepreneurship are often regarded as pioneers in their respective domains. Initially, during the early stages of the PREO-funded project, we had difficulty with getting interested clients to commit. However, following the solar installation on Amina's farm we have seen a major surge of requests with many directly expressing their desire a system “just like Amina’s”. This remarkable shift has not only positively transformed community perspectives on the solution but also ignited a surge in new installations, significantly contributing to the overall project's success.  Therefore, it is crucial for the design and implementation of solar-powered drip irrigation initiatives to recognise women as catalysts for driving agricultural and clean energy solutions.

2. Service and Maintenance and after sales-support

Another key lesson we've learned revolves around the importance of delivering post-sales support. Providing comprehensive after-sales support, encompassing staff training and service maintenance, is crucial for the success of projects bridging clean energy and agriculture, particularly during critical farming periods.  As demonstrated by our maintenance trips, having trained on-site staff and continued service and maintenance significantly enhances system performance and reliability. This, consequently, elevates the value proposition for farmers considering solar-powered drip irrigation solutions.

3. Importance of clear and concise contracts

A significant insight gained from this project is the value of maintaining concise and straightforward contractual agreements with farmers. Given their limited familiarity with the technology and financing intricacies, farmers often struggle with, or are deterred by, lengthy contracts. Instead, they favour condensed versions that focus on essential terms. This underscores the need for brief contracts, even when detailing aspects like payment default.

4. Loan repayment schedule is farm-specific

In farming communities, harvest times vary. Some harvest crops all year, while others do so only at specific times of the year. This leads to different income patterns, with some farmers having steady income throughout the year, while others are getting money only occasionally. This impacts payment plans. Farmers with occasional income might struggle with regular payments. So, it's important to adjust repayment schedules based on their harvest cycles. One solution is milestone payments aligned with harvest periods, instead of spreading payments equally throughout the year.

Q: Looking to the future, what are your plans for developing your project?

1. Financing Engagement

Throughout the duration of the PREO-funded project, ClearSky Power has strived to engage local lenders in facilitating financing the farmers. But, as previously mentioned, local financial institutions are often unwilling or unable to extend loans to customers lacking credit histories and guarantors, or in the absence of compelling business propositions and comprehensive proofs-of-concept that underpin farmer funding requests. The development and implementation of customer financing innovations by local lender institutions is pivotal to ClearSky Power’s mission to scale-up clean energy technologies and farmer-oriented solutions. In light of this, ClearSky Power aims to use the success of the first and second rounds of PREO-funded installations as compelling models for banks to validate more certain paths to profitability in farmer financing.

Sharing knowledge and experiences gained through the first two phases of the project with MFIs is a pathway to achieving that goal. ClearSky Power has continued throughout the project to collect and analyse financing data, findings and lessons derived from these initiatives. These assessments encompass an evaluation of farmers' repayment capacities, the optimal scheduling for loan repayment, adaptable strategies for payment collection, payment default avoidance strategies and holistic insights into loan-related challenges to prevent them from becoming barriers to success.

Moreover, ClearSky Power intends to harness project-based concessional finance to catalyse additional investments in solar-powered drip irrigation by developing and designing farmer friendly finance loan products in collaboration with MFIs.

Meeting these goals and attracting additional solar-powered drip irrigation investments will establish the necessary foundations for a thriving clean energy and agriculture market within the country.

2. Facilitating the expansion of solar-powered drip irrigation across other regions

ClearSky Power aims to capitalise on its PREO-funded project experience and reputation to advance the synergy between clean energy and agriculture, specifically through solar-powered drip irrigation. One significant challenge we encountered is building trust within the farmer community regarding the added value of drip irrigation technology. To address this, we’ve demonstrated drip irrigation solutions on one farm and we’re currently implementing a second farm model demonstration.

We anticipate a shift in farmer behaviour, where they opt for full systems rather than standalone components like water pumping alone. This evolution will enable ClearSky Power to seamlessly integrate comprehensive solar-powered drip irrigation systems into the burgeoning market demand for solar pumping. The company's expansion plan includes reaching 60 more customers within the next three years across three regions: Awdal, Darasalam area (Maroodi Jeex region), and Togdheer region.

3. Research

Recognising the significance of reliable, clean and affordable energy in increasing agricultural productivity, ClearSky Power plans to undertake research to determine the optimal size of a generation plant that provides base load power for water pumping and additional power for additional energy services in the agricultural cycle. This includes evaluating the marginal cost of additional energy production and exploring potential surplus energy utilisation.

News

In September 2022, Kampala-based social enterprise Bodawerk completed their PREO-supported field trial of farm mechanisation services powered by renewable energy in rural northern Uganda. The trial tested the deployment of their multi-purpose electric tractor which provided local smallholder farmers with access to machinery for their ploughing, tilling, threshing, milling, and grain transport activities. This initiative enabled Bodawerk to better understand how well their mobile mechanisation services meet the needs of low-income farmers, particularly around cost savings and improved productivity.

Specialists in developing circular energy solutions in the field of lithium-ion batteries, Bodawerk was founded as a social enterprise in 2017 to bring beneficial products and services to low-income customers. Smallholder farmers in remote, off-grid regions of sub-Saharan Africa typically struggle to afford the high upfront costs of labour-saving machinery, which can be difficult to source and runs on expensive and polluting diesel fuel. To address these challenges, Bodawerk pioneered the ‘AgrE-Hub’, which brings a range of farming technologies within reach for smallholder farmers as a one-stop service-based business.

Charged at a standalone solar PV station, the Bodawerk system entails electric tractors transporting cutting-edge lithium-ion batteries over long distances whilst also being powered by them, enabling smallholder farmers to pay flexibly for mechanised services at a low cost and at a suitable point in their agricultural cycle. Mechanisation powered by clean energy provides a vital means for farmers to improve their livelihoods by reducing time spent on preparing the field and post-harvest processing, whilst also enabling them to get fresh produce to market quicker. Further benefits include less waste, reduced manual labour and fuel cost savings.

PREO interviewed Bodawerk’s Chief Operations Officer Janos Bisasso as the pilot was coming to an end to find out about their experience and capture some of the key lessons learned.

Q. Can you elaborate on what you intended to achieve through the PREO project and Bodawerks’ initial targets?

Smallholder farmers in sub-Saharan Africa are unable to access affordable mechanisation services as grid connectivity is typically poor and affordable off-grid mechanisation is usually unavailable. The PREO project aimed to assist Bodawerk in addressing these development challenges.

With support from PREO and co-financing from the DOEN Foundation, Bodawerk International Limited set up an AgrE-Hub in June 2019 in the Apac District of Northern Uganda. The objective of the project was to facilitate the productive use of renewable energy within agricultural mechanisation services.

To pilot the concept, Bodawerk established an AgrE-Hub comprising of the E-Trak and the AgrE-Hub:

The E-Trak is a low-cost, multi-purpose tractor that can provide agro-processing services. These services ploughing, tilling, threshing, milling, grinding and transportation services using a multi-purpose electric tractor. The Battery pack is a li-ion battery pack charged through a Bodawerk-owned standalone Solar PV station. During scaleup, we plan to purchase electricity from rural mini-grid operators thereby improving their utilization instead of building in-house infrastructure.

The AgrE-Hub structure allows for the use of E-Traks as mobile power stations that serve farming communities within a 50km radius of the solar PV station and enables low-cost farm mechanisation as a service.

Q. What were the key service packages that Bodawerk designed and delivered through the PREO project? What problems did they solve for the smallholders?

The goal of agricultural mechanisation was to reduce the manual labour required by farmers and increase their crop yields, while also improving the sustainability of farming practices. Bodawerk implemented a categorisation system for our services, dividing them into four major categories: field services (such as ploughing and tilling), hub-centric services (such as threshing, milling, and grinding/pasting), transportation services and energy-as-a-service. This categorisation allowed us to effectively track our activities and streamline the data-labelling process. Furthermore, it has also enabled us to communicate more clearly with our clients and stakeholders about our services and how they fit into our business operations.

The pilot featured the following services available to clients and stakeholders:

Field services

Farmers were able to hire ploughing services to facilitate early planting which leads to decreased incidences of pests and diseases, resulting in higher yields.

Hub-centric services

Farmers were able to access value-added services for their produce at a convenient local hub, avoiding the need to transport crops to distant processing locations. Reduced transportation costs resulted in lower production costs and increased profitability for farmers.

Transport services

Electric tractors are more cost-effective than gasoline-powered vehicles. They have lower operating and maintenance costs, making them an attractive option for farmers who need affordable transportation. By having access to affordable transportation, farmers were able to transport their goods to local markets more efficiently.

Energy-as-a-service

Providing energy-as-a-service to customers through smart lithium-ion battery technology offered several benefits to farmers and small businesses. By powering small-to-medium enterprises such as welding and fabrication businesses, retail shops and restaurants, energy-as-a-service created opportunities for farming households to engage in income-generating activities. This can help farmers to diversify their income streams and improve their financial stability. Smart lithium-ion batteries are portable and can be easily transported to different locations, particularly beneficial for farmers needing to move their energy source from one location to another.

Q. What were the most significant challenges that Bodawerk faced in implementing the project?

Some of the key technical challenges that we faced included, imported equipment purchased for tractors that were tested on arrival and we, unfortunately, ran into mechanical issues during operation. These issues required a considerable amount of time, knowledge, and skills to modify and retest the equipment ready for operation. Another challenge came from operating just two tractor prototypes at a time as we sometimes encountered breakdowns in parallel. This led to lengthy recovery processes from the field as we were then without a tractor to pull the broken one back down to the hub. We also experienced several technical challenges with the tractors. To overcome these barriers, our project engineer and his team had to repeatedly conduct repairs under the guidance of the Chief Technical Officer at the head office.

In addition to the technical issues, we also faced significant capacity constraints, including skills gaps among our staff which became evident during the implementation of the mechanisation activities, which we did by training the workforce with tailor-made resources.

It also became evident that there was a need to allocate and train more resources in machine operation to meet the increasing demand for agricultural mechanisation services in our area of operation. For instance, during the land preparation season, the team trained in ploughing also handled other activities such as grinding or milling if customers had requested those additional services at the same time. Without enough trained staff in place, a specific service has to be prioritised, causing delays in production. This challenge highlighted a significant need to allocate more budget to training personnel, materials, and facilities.

Lastly, smallholder farmers also reported challenges around not having enough money to pay for services upfront, yet the Agr E-hub did not offer more flexible payment options for customers such as credit or instalments.

Q. What challenges did Bodawerk face in building a commercially sustainable model in the provision of farm mechanisation services? What solutions might allow you to achieve business viability?

Upon analysing the agriculture ecosystem, we assessed that the revenue generation over a period of 18 months amounted to approximately UGX 15,000,000 (equivalent to roughly 4,000 USD) per AgrE-Hub. We found that this amount was relatively insignificant considering the costs of acquiring and maintaining the necessary assets and infrastructure.  Considering this, we determined that the revenue generated would not be sufficient to justify investment into these assets.

If we were to present a scenario where a less energy-dense battery had already been fully amortised, and then integrated into our agricultural hub system, this could be more economically viable and would present an opportunity to utilise the battery at a lower overall cost. If the initial use of the battery is within the e-mobility sector, which has high energy requirements, then after 2-3 years when the batteries no longer achieve their full capacity of 4kWh, we can repurpose them for use in agriculture mechanisation services. At this point, the battery would have already been written off and can be used for stationary storage in service provision.

Bodawerk’s core business model is battery manufacturing and building a network of swap stations for electric motorcycles, with plans to expand into rural communities in Northern Uganda. As we progress, we aim to revisit our business case for providing agricultural mechanisation services by integrating learnings generated from the PREO-supported project. Such learnings include using amortized batteries from e-mobility businesses and leveraging pre-existing infrastructure such as e-mobility charging stations which we believe provides a more practical use case.

News

Ecobodaa is a Kenyan start-up with a vision; to replace the country’s 1.3 million polluting petrol motorcycles with locally designed and assembled electric motorcycles, cutting emissions and improving air quality.

This vision has just received a significant boost, with Ecobodaa becoming one of five sub-Saharan African start-ups to secure a share of nearly £900,000 in grant funding.

The funding comes from PREO the Powering Renewable Energy Opportunities programme. The programme is funded by the IKEA Foundation and UK aid from the UK government via Transforming Energy Access (TEA) and delivered by the Carbon Trust and Energy 4 Impact.

To qualify, projects must demonstrate their contribution to “Productive Use of Renewable Energy” which means their business models generate local, economic, and social value, with the potential to scale operations.

Ecobodaa’s hopes to have 1000 e-bikes in operation by the end of the year and its work will help hundreds of small business owners, as most of the country’s motorcycle riders operate as taxis, known as boda bodas.

Riders have been reluctant to trade their fossil-fuelled bikes for electric alternatives, due to the high upfront capex cost of batteries which often require large down payments.  

While cheaper in the long run, the upfront cost of each battery is anywhere from six to eight times the cost of a tank of gas.

Instead, Ecobodaa are removing this barrier to ownership by offering a lease-to-own payment plan through a digital platform which riders can use to make micro pay-as-you-go (PAYGO) payments on motorcycles and batteries.

PREO funding will enable the company to trial this technology for a fleet of 50 electric motorcycles in Nairobi.

Jon Lane, PREO Programme Manager, said: “We are proud to be supporting five early-stage productive use of renewable energy companies creating pioneering solutions in e-mobility, sustainable cooling and low emissions power. Through PREO the financial and advisory support will accelerate the progress needed to support these companies to prove and scale their business models, creating positive impact socially, economically and environmentally across sub-Saharan Africa. In the past, this support has led to organisations securing investment to grow their operations further. We look forward to seeing how this group of organisations will develop in future.”

The other four successful projects also receiving funding are SokoFresh, Hinckley Associates, Charm Impact and TRī.

SokoFresh is a Kenya-based social enterprise which provides affordable cold storage for rural communities to reduce waste and financial losses for farmers.

TRīoffers affordable electric three-wheelers to professional drivers in Tanzania on a lease-to-own scheme, aiming to support small business owners and decarbonise the country’s transport.

Hinckley Associates is creating lithium battery packs to power fridge freezers across Nigeria during power cuts, replacing petrol and diesel generators.   

Charm Impact is a peer-to-peer impact investment platform, which provides loans to local clean energy companies. So far, they have provided 23 loans, improving energy for more than 350,000 people across seven countries.

The five recipients join a cohort of 29 previously supported private sector and non-profit enterprises to previously receive a share of £5.5 million in PREO grant funding.

This funding has helped these projects scale and go on to raise a further £24 million in public and private capital. 

News

Electric motorcycles are set to be a dominant force in sub-Saharan Africa’s sustainable mobility transformation, but continued investment in start-ups tackling barriers across the value chain will be critical to maximise the full potential, says a report recently released by the Powering Renewable Energy Opportunities (PREO) programme.

Two-wheelers are quicker and more easily manoeuvrable than four-wheeled vehicles, especially across sub-Saharan Africa, where countries often have poor-quality roads. Motorcycles also provide stable income opportunities. The Charging Ahead – Accelerating e-mobility in Africa report from PREO outlines the market opportunity for e-motorcycles to become a driving force in the African e-mobility sector as, according to analysis by Mordor Intelligence, the market for motorcycles in Africa was worth US$3.65bn in 2021, and is projected to grow to US$5.07bn by 2027.

However, to accelerate progress in the e-mobility sector and meet the demands of a rapidly expanding customer base for two-wheelers, there are a number of challenges that need to be addressed. These include improving the availability of durable hardware, reliable charging infrastructure and access to high-quality battery solutions.

According to industry estimates, more than 90% of electric motorcycles sold in sub-Saharan Africa are imported from China and India and are not built for African conditions. Poor grid infrastructure means baseline electricity access is not reliable enough to support renewable battery recharge networks, and the electricity supply is weak. In addition, high-quality battery suppliers prioritise global buyers able to order at volume, which leaves small start-ups out of the picture.

The report examines how three PREO-supported companies – Roam (previously Opibus), Mobile Power and Zembo – are successfully addressing each of these barriers, and together are providing the solutions needed to support an enabling ecosystem to accelerate progress across the entire e-mobility sector. 

Durable hardware – Roam is a Swedish-Kenyan company that manufactures robust electric motorcycles in Kenya. The company is demonstrating that with the support of local manufacturing and assembly, the final price of electric motorcycles can be lowered to compete with ICE (internal combustion engine) vehicles while also customising the product to local conditions. Roam has now acquired the capacity to fully design the vehicles and manufacture 35% of them in-house with a goal to reach 70% in the next three to five years. 

The company plans to expand beyond Kenya to other African markets through strategic partnerships, raise US$17.5 million in equity and debt for working capital and hopes to supply Uber with 3,000 electric motorcycles for its delivery services across sub-Saharan Africa.

Reliable charging infrastructure – Ugandan company Zembo has developed a solution to enable the roll-out of e-motorcycles in areas with weak and unreliable access to electricity by using solar energy to charge the batteries.

In Uganda, Zembo operates 27 battery-swap stations for electric motorcycles, considered one of the largest networks in the region. It sells motorcycles to taxi operators on a pay-as-you-go basis and provides batteries-as-a-service through its battery-swap network. 73% (personnel cost – 55%, rent – 18%) of the monthly cost of operating a swap station is fixed cost in nature, delaying profitability and slowing down expansion. 

Zembo’s scale-up strategy involves expanding its network using risk-sharing mechanisms such as franchisee models, and reducing personnel costs by deploying automatic swap cabinets. The company is also installing solar power solutions for off-grid areas and hybrid power for on-grid areas with weak or unreliable grids. This will enable batteries to be charged even in areas that are not on the grid and during grid blackouts. Zembo plans to expand its fleet to more than 2 000 motorcycles and 60 swap stations by 2025. 

High-quality battery solutions – Mobile Power operates in Sierra Leone, Liberia, the Democratic Republic of Congo and Nigeria and is tackling the scarcity of high-quality battery technologies for small-scale businesses. The company has developed clean energy storage products (lithium-ion batteries) that it offers to businesses and individuals through a rental model. Since 2017, Mobile Power has grown its rental business to 500,000 rentals every month and is gaining 2,000 new customers every week at its peak growth periods. 

Mobile Power is now replicating its rental model in the mobility sector and generator replacement sector by leveraging the same technology components: batteries, battery management systems and battery charging hubs. The company has now reached a stage whereby it can manufacture robust batteries tailored to African conditions at scale for its in-house use and satisfy the demand of its electric mobility peers. Mobile Power’s pay-per-use battery-swap model enables customers to access the service based on their needs.

Jon Lane, PREO Programme Director, comments: “Investing in e-motorcycles provides a path to more sustainable and equitable growth across African communities and addresses the urgent issue of climate change. Through our work with several start-ups, we have identified opportunities for a full ecosystem of solutions that address challenges across the value chain. We hope this report demonstrates the impressive progress being made by companies in the e-mobility sector and will act as a call for investors, policymakers and partners to engage and collaborate to help meet the scale of the challenge.”

PREO is funded by the IKEA Foundation and UK aid (via the Transforming Energy Access platform), and is delivered by the Carbon Trust and Energy 4 Impact. To date, it has supported 27 productive-use-of-energy enterprises across 11 countries in sub-Saharan Africa, four of which are in the e-mobility sector. 

Click here to download PREO’s Charging Ahead – Accelerating e-mobility in Africa report: https://preo.designdev.website/charging-ahead-accelerating-e-mobility-in-africa/ 

News

Over the past two years, PREO has delivered critical technical assistance (TA) support to 17 private sector companies, from pre-revenue start-ups to global market leaders, operating in the e-mobility, solar irrigation, cold storage, and financial services sectors across sub-Saharan Africa. As well as supporting a portfolio of PUE innovators with business model demonstration grants, PREO has provided TA to non-portfolio companies to broaden its reach and impact. The aim of TA is to address knowledge gaps, improve the business viability of the companies, and enhance potential investment performance for private investors.

A recipient of PREO’s TA is mobility as a service company eMo Bodaboda, based in Dar Es Salaam, Tanzania. PREOs technical assistance to eMo Bodaboda has been fundamental in realising the opportunity for self-employed taxi drivers to improve their livelihoods by avoiding the high fuel and maintenance costs of internal combustion engines (ICE). At the same time, through the reduction of air pollutants and greenhouse gas emissions, electric motorcycles bring further local and global gains for the environment. In this piece, we outline how PREOs’ technical assistance to enterprises and organisations such as eMo Bodaboda significantly improves their viability, productivity and wider impact.

eMo Bodaboda viability evidence building to expand their network in Tanzania

One million fossil fuel-powered two-wheelers are said to be in use across Tanzania today, presenting a vast market opportunity for e-motorcycle businesses. Founded in 2021, Tanzanian start-up eMo Bodaboda provides electric motorcycles manufactured in China and Pakistan, of a similar design to the common motorcycle models in Tanzania. eMo Bodaboda has tested selling to several market segments, but is focused on motorcycle-taxis, which currently make up the vast majority of the fleet in Tanzania typically driving roughly 100 km per day.

eMo Bodaboda has been piloting their single-battery electric motorcycles in Dar es Salaam since August to develop their business case for expansion. For founder Erick Mome Morro, electric motorcycles represent a major opportunity for self-employed taxi drivers to improve their livelihoods by avoiding the high price of fuel and regular maintenance costs of motorcycles with internal combustion engines.

Whilst eMo Bodaboda’s pilot received positive customer feedback the company needed more in-depth and robust data to develop a business case. PREO’s technical assistance in economic and emissions modelling has been pivotal in enabling eMo Bodaboda to better understand the comparative costs and benefits of their electric motorcycle versus regular motorcycles with combustion engines. This exercise has helped the company in building a strong body of evidence to attract partners and the funding needed to expand its fleet and secure a share of the fast-growing e-mobility market.

How PREO built eMo Bodaboda’s economic and emissions modelling tool

Electric motorcycles are a CAPEX-intensive business, so to deliver at scale and to attract potential investors, eMo Bodaboda requires a substantial capital injection to acquire a fleet of vehicles, build out its team and develop stronger charging and maintenance infrastructure. To build evidence around the optimal business model for the company, financial modelling was required to evaluate the potential cost savings for the typical taxi driver seeking to save on operational expenses by converting to electric motorcycles.

When PREO was approached by eMo Bodaboda, their focus had been on the day-to-day operations of running a pilot programme and exploring potential partnerships, so they had not yet developed the internal capacity for emissions and financial modelling. With its team of experienced consultants, PREO was well positioned to provide the complex evidence eMo Bodaboda needed to prove their vehicles’ benefits to investors and customers.

PREOs technical assistance fell into three main areas, emissions modelling, financial modelling and interviewswith drivers to gain feedback about their experiences using the motorcycles.

Key Findings:

• Emissions modelling – found significant improvements in pollutant emissions coming from switching from an internal combustion engine motorcycle to an eMo Bodaboda electric motorcycle
• Financial modelling – found dual-battery motorcycle-taxi’s, can make the same revenues as ICE motorcycles, yet gain a 2.5x increase in weekly take-home pay as drivers save nearly 80% on their energy costs by switching to electricity
• Driver interviews – found significantly improved user experience as e-motorcycles meant reduced noise, exhaust, and vibrations, which made for a more pleasant driving experience

A set of key recommendations were formulated by the PREO technical team. eMo Bodaboda is now actively investigating dual-battery motorcycle models and focusing on finding a suitable partner to operate their battery-swapping stations.

PREO Programme Manager Arun Gopalan says:

We pride ourselves on providing a suite of technical, commercial, and business advisory support that are critical but not commonly available to PUE enterprises. These range from business model advisory and go to market strategy, to unit economics modelling, feasibility studies, technical design and market assessments. In many cases PREO’s TA has acted as “technical” safety net for PREO projects, preventing cost overrun, running controlled pilots to demonstrate business models, and facilitating capital raise for PUE enterprises.

News

Lack of irrigation, refrigeration and access to markets are responsible for the loss of over a third of the crops produced by smallholder farmers in Malawi, making it hard to earn a decent living through agriculture. Women farmers are particularly vulnerable, as they must also contend with limited access to land and financial resources, in addition to shouldering family care responsibilities.

To overcome these challenges, Practical Action Consulting, in partnership with African Mini Grids (AMG) and Modern Farming Technologies (MFT), and with the financial support of Powering Renewable Energy Opportunities programme (PREO), is piloting an innovative farming business model that integrates and improves each stage of the agricultural value chain. Their proposed approach seeks to enable women farmers to increase their yields by growing crops in greenhouses using solar drip irrigation, and to preserve their produce in a solar-powered chilled plant, drastically reducing post-harvest losses. It also aims to establish new market linkages with an array of wholesale buyers, enabling the women farmers to sell their produce at higher and more reliable prices, and reducing risks and single buyer monopolies.

Progress has been rapid since the outset of the project: two thirds of the 45 planned greenhouses have already been constructed across three sites near the village of Chintheche in rural northern Malawi and are operational after only five months. In addition, 90 out of the 135 selected women farmers have been trained in modern crop growing practices and smarter harvest and post-harvest techniques. To help modernise their enterprises, farmers have also been given support on improving business and financial management, as well as safeguarding and safety standards.

The supported farmers are now producing much higher volumes of vegetables (a 4.5-fold increase since the start of the project) which are being refrigerated in an MFT-owned energy efficient, solar-powered chill plant before being sold in bulk to wholesale buyers. Whereas the farmers used to sell their produce directly to neighbours and small local markets, they are now achieving better prices through contracts signed by MFT with eight buyers, including large retailers, local supermarkets, hotels and restaurants. Through improved access to more lucrative markets, the farmers have seen an increasing rise in profits and their income.

With the implementation partners recouping their investment by selling the produce at a marked-up price, the project started to break even in September 2022. As more farmers are onboarded and production levels increase further over the coming months, the projected profitability of this business model will help demonstrate its replicability.

With a rent-to-own scheme in place, the farmers will eventually own the greenhouses themselves which will enhance their profits and widen their scope for business expansion. At the same time, MFTintends to reinvest their share of the profits in the construction of more greenhouses to meet the higher capacity of the supported farmers and potentially enrol more women farmers.   

The next few months will be critical as more data will allow PAC to gauge the full impact of the project and its potential for replication and scaling. PAC particularly hopes to see MFT achieve greater reach and impact as a social enterprise, as more women farmers improve their livelihoods through the project. The ripple effect of benefits for the wider community will also become increasingly apparent as the higher volume of produce sold boosts local food security, drives the local economy forward and generates additional employment opportunities for buyers and transportation companies.

News

Last month the PREO programme showcased the exciting contributions it’s making within the productive use of energy space at COP27.

COP27 took place on 6-18 November in Sharm el-Sheikh Egypt marking the 27^th UN Climate Change Conference of the Parties. During the largest annual gathering on climate action, we shared insights from the PREO programme’s technical assistance and financial support made possible with UK aid funding from the UK government and IKEA Foundation.

PREO

‘Health, Wealth, and Environmental Prosperity – Investing in Productive Use to Power Decarbonization’ –11 Nov, 10:30am EET- this dedicated PREO panel explored how enabling clean, reliable, and affordable energy is vital in creating an inclusive transition for underserved communities. Panellists included David Aitken, Director of Innovation, Carbon Trust, Ms Gabriela Elizondo Azuela, Practice Manager ESMAP World Bank, Makena Ireri Director of Clean Energy Access Research East Africa, CLASP and Christopher Emmott, Associate Director of Investing in Energy Access, Acumen.

During the session, Carbon Trust’s David Aitken drew upon the critical need to power homes and businesses to unlock improved income, better health, build better economies and enhance diversity and inclusion, ‘when we talk about the productive use of energy we can look at how technologies and solutions such as water pumps for irrigation, crop processing mills, for agricultural produce, cooling solutions for preserving food, and charging solutions for e-mobility and a whole range of innovative technologies are working to transform innovations to deliver economic, social and environmental benefits for a just energy transition’.

Moderator, Felicity Tolley from Energy Saving Trust, then brought the panel to a close with a call to action for ‘increased investment and funding so we can work towards closing the energy access gap by 2030’.

Showcasing the impact of cooling facilities for productive use we closed out the session with a video shining a spotlight and capturing the daily operations of PREO company SokoFresh. 

Register here to access the full session and more from COP27s SDG7 Pavilion

The PREO programme was also featured in the following COP27 sessions which can be watched via the links below:

Session: The Powering Healthcare Energy Compact: building global momentum and lessons learned in India – 12 Nov, 13:30 EET

Link to recording: SEforALL COP27 - SpotMe

Session: UNFCCC Side Event: Accelerating Clean Energy Innovation To Drive Sustainable, Equitable Growth In Developing Countries – 14 Nov, 11:30-13:00 EET

Session: SDG7 and Cooling for All: Delivering Solutions at the Last Mile #ThisIsCool – 16 Nov, 16:30 EET

Link to recording: SEforALL COP27 - SpotMe

COP27 debrief recording:

News

Heifer International Uganda held a ground-breaking event in Kiboga district last week to mark the start of engineering works for the solarisation of five dairy cooperatives’ milk collection sites planned across the central and southwestern Ugandan milk shed under the PREO-supported Solar for Sustainable Income in Dairy project. The solar facilities will replace inefficient, polluting, and expensive diesel generators, thereby reducing post-harvest losses and increasing profitability for small-holder farmers.

Many milk collection points across Uganda are off-grid so, to preserve the milk collected in the cooling tanks they rely entirely on diesel-run generators, which account for 40% of the dairy producer organisations' operating costs. The collection points that are connected to the main electricity grid also make heavy use of back-up generators during the frequent power outages that can last up to eight hours a day.

PREO support

With € 1M funding from PREO and Heifer International, the Solar for Sustainable Income in Dairy project aims to demonstrate that solar-powered technologies have the potential to transform rural dairy value chains at the national scale. Access to adequate, affordable, and sustainable energy for milk storage at the dairy cooperatives can increase the volume of saleable output and on-farm returns for millions of low-income dairy farmers. Through this project Heifer International Uganda will also seek to mobilise collaboration between key players, such as solar technology suppliers, impact investors, dairy cooperatives and processors, to hasten the widespread adoption of solar technologies in rural dairy production at the national level.

Ground-breaking event

The event that took place in November at Dwaniro Dairy Farmers cooperative’s Migina milk collection and chilling centre, was attended by representatives from local and national government as well as the dairy and solar technology sectors.

Johnson Kwesigabo, the Dwaniro Dairy Farmers Cooperative’s Chair, told attendees how nearly half of the cooperative’s operating costs go into purchasing fuel for their diesel generators. Despite their collection centre in the nearby village of Dwaniro being connected to the national grid, it still relies primarily on generators because of unreliable power supply. The greater affordability and reliability of solar power for their chilling units will drastically reduce severe milk waste.

William Matovu, the Country Director of Heifer International in Uganda, underscored the urgent need to improve the cost-effectiveness of dairy processing and storage. “Skyrocketing fuel prices are curbing the growth of the dairy value chain due to increased operating costs. The installation of solar PV systems will significantly reduce costs for producers whilst also cutting carbon emissions from generators by 90%. With enhanced efficiency resulting in greater volume of output, renewable energy is set to increase incomes for all actors in the dairy value chain.”

With an estimated 5,300 MW power generation capacity by means of hydropower, biomass, solar, geothermal, peat and wind the Ugandan industry is well positioned to achieve growth through renewables energy access. Speaking at the launch, Dr Isabirye Brian, the commissioner for renewable energy at the Ministry of Energy and Mineral Development, highlighted government efforts to drive the clean energy transition. “Whilst the full energy potential of renewables has yet to be realised, the government is keen to promote the use of climate-friendly energy through tax breaks and consumer subsidies as well as rural electrification projects.”

Innovative financing model

Through PREO’s support, the Solar for Sustainable Income in Dairy project is also pioneering a financing model called the Power Purchase Agreement (PPA) that enables dairy cooperatives to avoid the upfront costs of buying solar energy generation and storage and pay only for the electricity consumed. The ten-year PPA also gives dairy cooperatives the option to purchase the solar-powered units at any point from the financier who takes on the technology risks. Arun Gopalan, Project Manager at Energy 4 Impact, stresses that “innovative financing models are needed to scale up productive use of energy opportunities in the dairy value chain in sub-Saharan Africa. We want more dairy producers to benefit from clean energy without being disincentivised by the steep initial cost of these systems or concern about their possible obsolescence a few years down the line. The Off-grid dairy cooperatives that are part of the Solar for Sustainable Income in Dairy project are expected to save as much as UGX 2 bn (~Euros 511,000) over the life of the energy assets. Greater uptake of such systems will encourage financiers to invest more in the development of solar assets for dairy cooling”.

Coming to an end in June 2023, this two-year project is expected to increase the volumes of procured, bulked, chilled and sold milk. It will not only boost the incomes of dairy farmers working with the five supported cooperatives, it will also encourage the wider dairy industry to embrace the use of renewable energy systems at key stages in the value chain.

About Heifer International

Since 1944, Heifer International has worked with more than 39 million families around the world to end hunger and poverty in a sustainable way. Working with rural communities across Africa for 48 years, Heifer International supports farmers and local food producers to strengthen local economies and build secure livelihoods that provide a sustainable living income. 

For more information, visit heifer.org

News

Good Nature Agro (GNA) has been granted €160,000 by PREO (Powering Renewable Energy Opportunities) to improve the productivity and profitability of small farms in Zambia through the introduction of an irrigation-based contract farming system. Solar-powered irrigation will boost the incomes of subsistence farmers by enabling them to multiply their harvests by growing during the dry season, GNA will further support farmers in diversifying their crop portfolio to incorporate crops that fetch a higher price at market. Using their cultivated land more efficiently, the programme will also help in preserving forest land from being razed by farmers for agricultural use.

With approximately 3.8 million hectares of arable land, Zambia has the potential to become an agricultural powerhouse, yet small local producers are typically held back by lack of machinery, agronomic knowledge and access to market. The majority of subsistence farmers across the regions in which GNA operates produce low-value maize. Their farmland typically remains idle during the dry season between May and October in the absence of proper irrigation. This standstill in productivity for six months of the year has a detrimental impact on the earning capacity of farmers, significantly undermining food security in Zambia.

To improve the livelihoods of small-scale Zambian farmers, GNA will support their diversification into high-value legumes such as soya beans and ground nuts, using quality seeds initially grown at the Good Nature Foundation Farm and then supplied by contracted smallholder seed producers. Some farmers will also be supported in moving into high-value horticultural crops such as onions. The funding will further support field officers in providing advisory to farmers on which crops are most suitable for their land and how to maximize yields with suitable inputs whilst maintaining soil health.

GNA takes a ’full farm’ approach to engaging and supporting each farmer. Funding from PREO will enable GNA to give farmers hands-on training at successful horticultural farms in the initial phase of the project. The farmers will then be organised into groups at seven sites where they will have access to water from freshly drilled boreholes as well as equipment including solar submersible pumps, water storage tanks and irrigation kits. Irrigation will allow farmers to make the most of their existing farmland by adding one or more growing seasons to their expanded range of crops, increasing their crop and profit margins. GNA will subsequently purchase the farmer's produce directly at centralised buying points within the farming communities, reducing their transport costs and adding to their bottom line. It’s projected that this contract farming system will enable farmers to earn more than double their current annual income.

To ensure the growth and resilience of farmer livelihoods, GNA will help modernise their operations through training including financial literacy, digitization of records and making digital payments. It will also explore the deployment of a ‘grower rating’ system to help improve farm productivity. A grower rating is a score given to each farmer based on data such as quality of crop and adoption of best practices. This score then determines the farmer’s credit limit for the next season. There is potential to incentivise these grower ratings into financing opportunities for equipment that further unlocks the productive capacity of the six month dry season.

For more information on Good Nature Agro, visit: goodnatureagro.com

News

In September 2022, IKEA Foundationcoordinated a series of site visits in Kenya bringing together partners with a stake in energy and agricultural projects to see the progress made by projects, including two portfolio companies supported by PREO. Aiming to inspire greater engagement and collaboration in future, the organisation, which provides co-funding to PREO, led a broad delegation on the trip which included CLASP, SNV, AGRA, Kilimo Trust, Energy Saving Trust, World Vegetable Center, Practical Action and GIZ. It provided an excellent opportunity for the PREO team to showcase how 4R Digital and SokoFresh are driving efficiency and growth in the agri-food sector through technological innovation.

At their pilot site at Wendy Farms in Gikambura, digital solutions specialists 4R Digital outlined how the company received PREO support to develop and trial a business and payment model in the market which aims to make high quality solar pumps more affordable for smallholder farmers. Their proposed payment plans will offer innovative pricing mechanisms such as pay-per-litre and seasonally adjusted repayments through digital technology whilst also bundling value-added services such as soil moisture analysis. The company aims to reduce costs for the end user by leveraging the supply chain infrastructure of project partner Davis & Shirtliff whose size and reputation are key to making a real impact in East Africa.

Nora Bergin, Senior Project Manager at 4R Digital comments, “We were pleased that the delegation quickly grasped the potential of digital payments to make solar irrigation more affordable for subsistence producers. Needless to say, many of these implementing organisations are highly knowledgeable about the needs of local farmers and future collaborations with them could enable us to expand our range of products and scale up operations. Tapping into their networks would help us reach low-income farmers in remote rural areas, currently reliant on rainfall or diesel pumps and unable to afford the high upfront cost of solar-powered kits, with payment plans specifically tailored to their enterprises”.

4R Digital also invited Davis & Shirtliff to demonstrate the PAYGO solar irrigation systems from their range most suited to local smallholder farmers. Philip Holi, Technical Director at Davis & Shirtliff explains, “We were keen to show the partners that our solar pumps have the range, capacity and robustness to handle the high silt loads typically found in the region whilst maintaining good flow and pressure performance.”

The delegation also visited SokoFresh’s cold storage hub in Kiganjo to see their first-mile solutions in operation as local producers were in the midst of an avocado crop aggregation. The team demonstrated the solar technology powering the cooling units and its efficacy in maintaining produce quality. Denis Karema, CEO of SokoFresh explains, “The perishability of harvested crops is a huge liability for smallholder farmers in sub-Saharan Africa where the lack of cooling solutions results in losses up to 50%.” The reliability of their cooling units have enabled a drastic reduction in the rate of loss to under 2%.

The SokoFresh team showed the partners how the company has optimised the pathway by which produce gets from farm to market. Providing cooling as a pay-as-you-go service at their hubs on a seasonal basis has not only removed the affordability barrier for farmers who cannot meet the upfront costs of buying their own refrigeration units, but the company also offers transportation logistics and market linkages that aggregates demand for produce, unlocking economies of scale for participating farmers. Denis Karema adds, “By offering a ‘one stop shop’ for smallholder farmers above and beyond affordable and reliable cooling, we are bringing game-changing solutions to market with the potential to create vital social change in agriculture-based economies”. Initial support from PREO enabled SokoFresh to successfully test a risky business model and the company was pleased to show the resulting solutions in action to potential collaborators.

Jolanda van Ginkel, Programme Manager at IKEA Foundation, says, “It was exciting for us to see that both 4R Digital and SokoFresh have been very keen to develop their products and services through field testing and listening to end-users.” Farmer leads were on hand to testify how the affordable irrigation and cold storage solutions offered by the two companies have led to a significant improvement in their earnings. Hosting a delegation of partners on this series of site visits comprised a first for the IKEA Foundation and for them it underscored the importance of bringing together projects and people that share a passion for driving agricultural development in sub-Saharan Africa. As Jolanda van Ginkel explains, “We returned home highly energised and full of ideas about how existing partnerships can be strengthened and where future collaborations make the most sense. We want to continue forging connections between our brilliant partners who each bring unique strengths and expertise to the mix. In the end, we are all working towards the same goal of helping smallholder farmers become more resilient by increasing incomes, improving soil health, reducing costs, and improving nutrition.”

News

Zembo has launched the first intercity e-corridor for e-motorcycles in Africa. By installing charging stations along the 120km Kampala-Masaka highway in Uganda, this one-of-a-kind project will help to prove that solar-powered e-mobility is a viable, climate-smart alternative to petrol-powered motorcycles, and will demonstrate the vast potential for expanding in off-grid Africa.

Zembo is a start-up company that provides sustainable e-mobility solutions for Africa. With the financial support of PREO and GIZ, the company has built a pioneering e-mobility corridor between the capital Kampala and the next large provincial town of Masaka – the first route for e-vehicles outside the capital. The PREO grant fund has enabled Zembo to operationalise the e-corridor by recruiting drivers, training them and financing the sale of e-bikes in the catchment area of the corridor.

In Uganda there are more than 700,000 motorcycle-taxis, commonly known as boda boda, most of which run on petrol. It is estimated that 5% of the Ugandan population relies on this business as a main source of revenue.

Zembo makes electric motorcycles, and its rent-to-own model enables low-income boda boda drivers to own their electric bike after two years. Data shows that a Zembo electric motorcycle increases profitability for boda boda riders by 60% compared with petrol motorcycle after the two-year lease period. The electric motorcycles also reduce CO₂ emissions by up to 97% as well as cutting noise pollution.

Zembo’s battery swap service also makes it possible for drivers to exchange a discharged battery with a recharged one in their network of solar-hybrid charging stations in Kampala. The company operates 27 charging stations in Kampala and has more than 250 electric motorcycles on the road, transporting 800 passengers per day and seeing 10,000 battery swaps a month.

While Zembo’s stations in Kampala meet most of the needs of urban boda boda drivers, the lack of charging stations in peri-urban and rural areas has limited their working area. The new intercity corridor, made up of three solar-powered and one solar-grid hybrid charging station at intervals of 30 kilometres, will enable electric motorcycle drivers to extend their service and increase their daily income.

“This location was chosen after surveying our drivers, many of whom have village homes in Masaka area (and in towns such as Mpigi),” explains Titus Kimbowa, Director at Zembo. “It represents a good economic opportunity for them, offering the possibility to service long-haul trips to higher-paying customers.”

The new infrastructure especially impacts low-income boda boda drivers whose daily revenue is typically €5. By going from Kampala to Masaka (120km) on an electric bike, a driver will save around 3€ of petrol and 276 kg of CO₂ per trip.

Following the opening of this new route, Zembo, with funding from PREO, plans to increase their fleet by six e-motorcycles per off-grid station serving the villages in the surrounding areas. This will also create 20 new battery swapper and technician jobs.

Zembo’s strategy is to position itself as a leading battery swap operator in the country. The company plans to create a nation-wide network of recharge stations, including across off-grid areas where it is challenging for drivers to find affordable fuel and even more challenging to find electricity. Solar has the advantage of being available everywhere in Uganda, making it possible to implement recharge stations anywhere. Building and operating these first off-grid stations will be key to prove that the economic operation is possible and scalable to other intercity routes beyond Uganda.

We’ve already proved that our business model is profitable in urban on-grid areas. Now, this PREO-co-funded project will give us the opportunity to prove that our solar-powered solution is viable and replicable in off-grid areas as well. We’ll then be in a strong position to unlock private investments to expand to other African countries.

Titus Kimbowa, Director at Zembo

For more information visit www.zem.bo