Spotlight on REEEP - Powering Agrifood Value Chains

The agricultural sector plays a key role in the economic development of many low and middle-income countries. Through the modernisation of agricultural production systems, the productivity of these systems can be dramatically increased to meet the needs of growing populations.

However, such modernisation requires reliable access to energy. The use of appropriate renewable energy technologies, such as solar-powered irrigation pumps, can help provide sustainable and affordable energy services that can support the agricultural production process. Sustainable energy sources can not only help lift communities out of poverty, but they can also help create employment opportunities by developing the local value chains. Complementary business models and innovative financing schemes need to be developed to fulfil this potential and to enable the provision of clean energy services to low-income consumers.

Renewable energy and energy efficiency solutions aimed at developing agrifood value chains already face a number of challenges including high up-front investment costs, unreliable policy framework conditions, lack of standards and lack of awareness. The Renewable Energy and Energy Efficiency Partnership (REEEP) - an international multilateral partnership that invests in SMEs to accelerate market-based deployment of renewable energy and energy efficient systems in developing countries - recognizes the critical water-energy-food inter-linkages related to the agriculture sector and the pressing need for investment in agricultural value chains in low and middle-income countries.

In order to foster agrifood value chain development, REEEP designed a “multi-stage incubation programme for high potential ventures that pushes innovative business models forward while gaining critical insight into the ecosystem conditions that so highly influence success” (source: REEEP). According to REEEP, high potential ventures are those that provide clean energy solutions that can significantly contribute to increased prosperity and CO2 emissions reduction.. REEEP's 10th funding round, called Powering Agrifood Value Chains, includes eight ventures with innovative energy-based solutions designed to foster development throughout agrifood value chains. In order to keep track of the changes resulting from its efforts, REEEP has put together an extensive Monitoring, Evaluation and Learning Framework, which employs indicators such as job creation, number of individuals with access to energy, and productivity growth to help quantify the impacts of its activities.

One of the projects supported through REEEP’s Agrifood Value Chains portfolio is a revolving loan fund, set up by REEEP and NexusC4D, which provides affordable loans Cambodian farmers and SMEs so they can invest in clean energy technologies, such as bio-digesters and solar water pumps.  REEEP also supports two ventures offering solar powered irrigation solutions in Kenya. Where these pumps replace rain-fed agriculture, they allow farmers to produce more than one harvest a season, and to grow cash crops such as leafy vegetables to sell on the market, thereby increasing their disposable income.  When the solar pump is used as a replacement for a petrol-powered pump, as well as avoiding nearly 200 kg of CO2 emissions annually, farmers also save around USD 100 per year in fuel costs. They also gain access to electricity for, for example, mobile phone charging, and save time since a solar pump can be left alone while in operation, whereas a petrol pump needs to be monitored at all times while pumping. Besides, the growth of the market leads to additional local opportunities beyond the agricultural sector, since small business emerge to manufacture, assemble, repair and sell solar powered irrigation systems (SPIS). The solar-powered irrigation sector therefore targets multiple Sustainable Development Goals like SDG 1 (No Poverty), 2 (Zero Hunger), 6 (Clean Water and Sanitation), 7 (Affordable and Clean Energy), 8 (Decent Work and Economic Growth), 13 (Climate Action), and 17 (Partnerships for the Goals). A detailed impact assessment of REEEP’s support of the solar irrigation sector in Kenya can be found here: https://www.reeep.org/reeep-impaqt-case-study-solar-irrigation-kenya

Other ventures in the Agrifood Value Chains portfolio include pico hydro powered mills in Nepal, solar powered dairy refrigeration in Bangladesh, as well as solar powered agrifood processing in Nicaragua. For further information on REEEP’s other activities, please check out the organisation’s homepage: https://www.reeep.org/

To gain more knowledge on the topic of innovative financing and business models, please take a look at the recently-published GFSE Policy Brief #5 on the topic.