The irony of Africa is its enormous energy challenge for its growing population. Despite the continent’s endowment with enormous natural resources that could well address the current unmet energy needs. The growing population requires innovative solutions to ensure that rural communities access energy sources for enterprise growth. About 645 million people in sub-Saharan Africa lack access to electricity with majority residing in rural areas and engage in agriculture as their predominant economic activity.
Agriculture contributes over one-third of the gross national product (GNP), and employs more than two-thirds of the labour force - about 70 percent of the population living in rural areas. In order to realize the great potential in agriculture, linking rural populations with off-grid energy sources is imperative for agricultural productivity and food security.
Solar energy is a practical option for farmers, especially in arid regions, enabling them to power their farm irrigation systems. Using the sun to irrigate farmlands is a simple innovation that allows farmers to produce crops over the dry period whilst conserving the available water resources.
The correlation between solar energy and irrigation systems is one way in which businesses can benefit from these market segments vis-à-vis supporting governments to spur development in rural sub-Saharan Africa. Bloomberg New Energy Finance (2017) estimates that by 2040, wind and solar will make up almost half of the world’s installed energy generation capacity, up from the current 12 percent, and account for 34 percent of all the power generated. This presents an opportunity for African farmers to lead the march towards renewable energy use at the farm level.
In addressing the risk involved in financing such businesses, the Africa Enterprise Challenge Fund (AECF) runs a series of competitions under the Renewable Energy and Adaptation to Climate Technology (REACT) portfolio. A successful beneficiary of the RECT competition is Future Pumps, a Kenyan-based company that received support to commercialise a low-cost, irrigation pump powered by solar known as the Sunflower Pump. Future Pumps uses a competitive retail pricing model and a structured distribution channel, that trainins partners in Kenya to assemble and install the product. By supporting such businesses, AECF is able to cushion their risks as they venture into the solar irrigation systems space and ultimately supporting farmers to increase crop production in Africa.
Agriculture offers important rural development opportunities. By increasing access to solar irrigation systems, farmers will be able to produce crops during the dry season and shift from overreliance on rain fed production. Ultimately, this increases their disposable incomes allowing rural farmers to spend more on education, housing and social welfare priorities. This has a multiplier effect on rural economies, spurring rural development and improved standards of living.