Earlier this month, a coalition of national governments, aid agencies, corporations and private funding organizations last month awarded $12.9 million worth of grants to 13 clean energy innovations targeting emerging market agriculture.
SunCulture, a company, creating solar-powered irrigation kits for smallholder farmers across several African countries, was one of these innovations receiving the largest grant at $2 million.
SunCulture designs and sells solar-powered irrigation systems and agricultural extension services that make it cheaper and easier for farmers to grow high-value fresh fruits and vegetables. The company claims its AgroSolar Irrigation kits result in yield increases of up to 300 percent and water savings of up to 80 percent.
AgFunderNews caught up with SunCulture’s CEO and co-founder Samir Ibrahim to find out more about impact funding in Africa and developing the technology.
You recently received grant funding from USAID’s Powering Agriculture: An Energy Grand Challenge for Development initiative. What will you do with this funding?
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
This funding will be used to scale up the distribution of SunCulture’s AgroSolar Irrigation Kit to three additional countries in three years. Currently, we only operate in Kenya, and at the end of the award we’ll be operating in Tanzania, Uganda, and Zambia, too.
How essential is this funding to the development of your project?
This funding is pivotal for our company. Grants such as these help catalyze private sector investment into the space by providing the investors with comfort and allow us to grow much quicker than we would be able to do otherwise.
What other sources of funding are available to you in your home market?
There are a lot of funds and donors putting money into sustainability in Africa, which is fantastic. In fact, according to a report put together by the global impact investing network and Open Capital Advisors with support from UKAID, DFIs have invested about $5.6 billion in East Africa in the last five years. And we’re sitting at the hub of all of this; more than half of all impact capital disbursed has been in Kenya, and at least 48 impact fund managers have staff placed in Nairobi, which is more than three times as many local offices as in any other country in the region.
While it’s great that there is so much money coming into the space, there are some issues. When a fund is created, investors create an investment thesis and then a mandate is set outlining future investment parameters. One problem we see is that these parameters are being set without speaking with implementers on the ground, so the negotiation is happening without fully understanding implementation. What that translates to is a lot of money coming into the space managed by a fund manager who then has to tick the boxes to justify an investment. We have had it happen to us many times; funds have offered us money on condition that we change our business model to make it fit with their mandate. This doesn’t make sense to us.
How did you come to develop this technology?
During his first visit to Africa in 2007, Charlie (SunCulture’s co-Founder and CTO) worked in Saint-Louis, Senegal where he lived with a Senegalese farming family. His hosts had a successful business exporting hibiscus flowers to Mexico, but were unable to keep up with demand because they lacked capital to invest in expanding their operations and local banks were unwilling to lend. This experience stuck with Charlie as he returned to the United States to study mechanical engineering and later to work with a commercial solar power developer. Eventually, he tired of working in the US and sought opportunities to get back to Africa and began researching the ideas behind what would become SunCulture.
Unlike in the US, where solar power has yet to reach “grid parity” and therefore requires subsidies, high energy prices and poor grid access in many parts of Africa mean that solar is often the cheapest and most appropriate solution. A number of companies have realized this in recent years and have capitalized on the opportunity to supply off-grid lighting and mobile phone charging products and services to millions of African consumers. While these services are in high demand, they fall short of providing a path out of poverty because their ability to improve productivity is limited. This realization led Charlie to investigate “productive use” solar applications where renewable energy could be used in innovative ways to boost productivity and empower consumers to improve their livelihoods. The sector with greatest demand for productivity improvement in Africa is agriculture, where farm yields are typically 50 percent to 75 percent lower than in other parts of the world. Large tracts of farmland across Africa lack reliable rainfall and are therefore in need of irrigation. However, only 4 percent of African farmland is currently irrigated compared to 40 percent in Asia. This is due to high energy and input costs. Using abundant solar energy provides an elegant solution to this problem.
After trailing various implementations of solar water pumps, it became clear that the existing models on the market were either too expensive or too low quality to suit the needs of Africa’s farmers. Therefore, in partnership with manufacturers in China and the United States, Charlie worked to develop an optimized solar pump that could provide water for a range of smallholder farmers, some with water as deep as 250 feet, with high-quality durable electronic and mechanical components so as to withstand the rough environments often encountered on African farms. The design for the pump includes a high-efficiency maximum power point tracking controller that adjusts the current/voltage of the solar panel to ensure maximum output. Additionally, he created a high-efficiency and easily maintained screw pump design. Following successful field trials in 2012, the company has sold over 450 irrigation systems across East Africa.
As far as you are aware, are there any other startups creating something similar?
There are a few companies that are using solar-powered water pumps for irrigation (in fact, some are Powering Agriculture awardees!), but our company differentiates itself by combining the cost-effectiveness of solar-powered water pumps with with the efficiency of drip irrigation and being a one-stop shop for smallholder farmers. When designing and building products for the world’s poorest people, it’s easy to forget that technology is just one part of the solution, that people need structures and systems that help them get maximum use from these products. So we do all of the installation, training, after-sales support, and agronomy support in-house, and we connect farmers to market and financing when they need it. SunCulture approaches farmers as a one-stop shop, giving them what they need to grow more while spending less.
How was the process with the Powering Agriculture Showcase?
It was great! The folks at USAID did a great job bringing relevant people to the showcase, and we appreciate the opportunity to showcase our company’s work.
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