A solar water pump can pay itself back very quickly. Photo credit: Winrock International/Bobby Neptune

By Chris Warren

Joshua Okundi’s five-acre farm is his classroom. A longtime schoolteacher who left his job to become a farmer in 2013, Okundi is an instructor to the constant stream of visitors who arrive at his home in Kendu, a small rural village in the western reaches of Kenya.

Visitors come seeking advice, seedlings, and a glimpse at technologies that can help them succeed.

Over the past two years, Okundi has exposed locals to the potential of solar-powered water pumps. Okundi was first introduced to the technology in 2015, when a representative from the U.S. Agency for International Development-funded Kenya Smallholder Solar Irrigation (KSSI) project brought a pump to show to a group of farmers.

Okundi instantly grasped why it was better than the diesel-powered pumps he had tried to use in the past. “Whenever there is sun, you can pump water,” he said. “Whenever a generator is running [the pump], you have to use fuel. And the pump usually gets broken. And if the cost of the damage is too heavy, that will render most of the crops useless.”

The benefits of a reliable pump that doesn’t require costly fuel are obvious in this part of Africa. With a climate that is typically hot and dry, agriculture has always been a challenge here. Climate change is making it even more difficult. As increasingly frequent, extended and severe droughts become the norm, the need for reliable irrigation is pressing.

Okundi now uses four pumps to irrigate his crops of tomatoes and corn and to replenish a small pond where he raises tilapia and catfish to sell in local markets. Besides witnessing the pumps in action, farmers with little money hear this important message: The pump pays for itself quickly.

Using a pump to grow just half an acre of tomatoes offers a quick payback. “Within three months, he will be in a position to start to repay with the profits,” he said. Winrock International, the NGO that implemented the KSSI project, performed ROI studies on two farmers who purchased solar pumps. The study found that one farmer could expect a gross profit increase of 350 percent after paying off a 22-month loan, and the other farmer was projected to enjoy a 235 percent increase after retiring a two-year loan.

Joshua Okundi surveys his crops. Photo credit: Winrock International/Bobby Neptune

The limits of energy access

The experiences of farmers like Okundi represent a different way to approach energy access in the developing world. Debates have long raged about whether the most direct route out of poverty can be found by extending centralized grids or by employing distributed energy resources, like solar and batteries.

But this either-or debate may be missing a critical component: Energy access alone does not guarantee vibrant economic activity. “Grid electricity got to people and 20 years later there has been no economic impact,” said Bikash Pandey, Director of Innovations, Clean Energy, Environment and Water at Winrock International. “Energy is not an end in itself, which is demonstrated by the fact that energy access has not had the kind of poverty impact that many have hoped for and expected.”

Solar water pumps are an example of a distributed energy approach to energy access that prioritizes productive uses that generate income for farmers.

“The increased income can be used to pay for the appliance within one or two years,” said Jennifer Holthaus, a program officer in Winrock’s Clean Energy, Environment and Water Group. “The farmer then has access to a device which increases her income [by a factor of] two or three times for the next 15 to 20 years.” By reducing the reliance on rainfall to irrigate crops, pumps also lessen the risk of drought-caused crop failures. This is critical when farmers are entirely dependent on crop yields to generate income.

The financial puzzle

Along with benefits to individual farmers, solar pumps also help address the continent’s overall lack of irrigation. Indeed, only 5 percent of arable land in Africa is currently irrigated, compared to 40 percent of Asia. Tapping into Africa’s groundwater using solar pumps would provide the reliable access to water necessary to feed the continent’s growing population.

Winrock’s Pandey sees a parallel with India’s successful efforts to expand irrigation. “India tripled food production since independence [in 1947] with only 5 percent more land in production,” he said. “It came overwhelmingly from increased irrigation from individual pumps, where the agency for irrigation was with the individual farmer and not the government. Nobody expects African governments to provide irrigation.”

What’s preventing African farmers from getting pumps is a familiar challenge: Their relatively high upfront costs (ranging between $300 and $1,200) put them out of reach of most farmers. Banks and other financial institutions in Kenya have also been slow to embrace full-scale lending. “Banks in Kenya are generally reluctant to invest in agriculture, and when they do provide a loan, they do so against collateral or a source of reliable income,” said Holthaus. “A school teacher can get a loan for the pump but not a farmer.”

Testing the financial waters

Far from the rural farms, in Kenya’s commercial and political capital of Nairobi, the microfinance company Juhudi Kilimo would seem a natural source of funding for solar pumps. Launched in 2009, Juhudi Kilimo’s business is financing Kenya’s smallholder farmers. It does so with two approaches, both of which are meant to address the reality that most of its customers lack the collateral and borrowing history mainstream financial institutions require.

One approach is asset financing, such as providing loans for farmers to purchase dairy cows. The organization also relies on a group lending model in which farmers work together to act as co-guarantors for any individual loan a farmer takes out. If one member of a group can’t repay a loan, the others must step up and contribute enough to cover the debt.

It’s a business model that has worked well. Juhudi Kilimo has 24 branches across Kenya and has distributed over 50,000 loans to farmers. Juhudi Kilimo began investigating whether there was demand for solar pumps in 2014. In 2016 the company worked with Winrock on a small pilot project to raise awareness and provide technical demonstrations of the pump to farmers.

The pilot only resulted in five farmers buying pumps. But there were important lessons learned. Two big ones: The pump made financial sense only for commercial farmers, and those who did take out money to cover the high upfront cost were able to pay the loans back quickly. “For smallholder farmers who are doing an acre of tomatoes or vegetables, they are able to get back the investment in one and a half cropping cycles. That means they only need to use the pump less than a year and they are able to get back their capital,” said Samwel Tobiko, a senior marketing officer at Juhudi Kilimo.

But favorable economics aren’t enough. Research conducted for Juhudi Kilimo showed the profound impact a person’s income level has on their decision-making. “The lower your income levels are, the more short-term oriented you are because you have more pressing problems. You have children to feed, you don’t know where your next meal is coming from, you are worried about school fees,” said Elvin Walela, a senior partnership officer at Juhudi Kilimo.

Walela believes that dynamic may begin to change through increased awareness of the rapid payback of pumps, and if solar pump manufacturers can drive down costs to equal their diesel-powered counterparts.

A solar water pump can pay itself back very quickly. Photo credit: Winrock International/Bobby Neptune

Pump priming

Juhudi Kilimo is embarking on a new effort to drive interest in pumps. The company is optimistic because it is now offering a cheaper version that can pump water over longer distances. Juhudi Kilimo is also making the pump available as part of a larger suite of products aimed at helping farmers manage their overall water needs. It’s an approach the company is calling “smart water solutions,” and it includes the pump, water tanks, irrigation kits and other technologies.

Juhudi Kilimo’s first foray into solar pumps was limited to one branch and lasted just over a month. Its new initiative will last more than a year and be available in six counties, each one with a different climate. “Who knows, if the first pilot was in another county, we might have sold 50 pumps. It could be that we didn’t try the right place,” said Walela.

Juhudi Kilimo is also investing in marketing and hiring staff dedicated to selling its bundle of water solutions. These new hires will be able to form groups of farmers, and will also have the power to distribute loans. These water solution experts will be given sales targets to meet and financial incentives to motivate them. “If they are able to sell, it just shows with more commitment from people we entrust to sell the product, it is possible,” said Walela.

The farmer’s bank

Co-Operative Bank is the second-largest bank in Kenya as measured by number of customers (about 6 million) and third based on assets. It was created to serve the financial needs of smallholder farmers.

Co-Operative Bank has also made initial efforts to explore demand for solar pumps. The bank’s foundation worked with Winrock to run a pilot program that both tested the technology and elevated the awareness of its benefits among farmers who already work closely with Co-Operative Bank to secure funding for seeds, fertilizer, and other farm necessities.

The pilot project with Winrock validated that the technology itself was durable and operated as expected. But the pilot project wasn’t sufficient for the bank to begin making loans on a large scale. “The pump has worked, we know that for sure now,” said Paul Karugu, who works for the Co-Operative Bank Foundation. “Can it be done on a large scale? Can we see the kind of repayment we expect?”

To test that proposition, the Co-Operative Bank Foundation is partnering with the MasterCard Foundation on another pilot program that will attempt to distribute loans to about 2,500 Kenyan farmers over the next three years. The initiative will be rolled out through some of the bank’s 12,000 cooperatives, which distribute loans to members using a group repayment approach. As part of the pilot with MasterCard, the Co-Operative Bank Foundation will also seek to educate farmers about financial literacy and how to utilize technology for their own financial needs.

Karugu is hopeful that demand for pumps will increase and other banks will offer loans. “Kenya, in a way, likes innovations. New things, they take them. If it works well, it spreads like a bush fire,” he said.

Cultivating a future

If the use of pumps does spread like a bush fire, one of the places it will ignite is on a hillside a few kilometers from Joshua Okundi’s farm. Here, Michael Ouma has planted over 300 mango trees, passion fruit plants and oranges, as well as pumpkins and other vegetables.

Ouma was one of Okundi’s students and has remained under his tutelage since graduating from university with degrees in international relations and crisis management. Ouma never imagined that farming was in his future. But like so many other young Kenyan college graduates, it has been difficult for him to land a job.

These days, Ouma is pondering a future as a farmer. The one ingredient he would need is water. At the moment, Ouma relies on a number of hand-dug cisterns that hold rainwater. After a recent spate of autumn rains, the cisterns are full. But that’s not always the case. Ouma points at a tract of land with dozens of dead paw paw fruit trees to show what happens when droughts are long and there’s no irrigation.

What Ouma would like to do — if he can get the money together — is hire someone to dig a well that accesses the plentiful groundwater. With that and a solar pump, he sees a bright future for his land and for himself. “You can see I have abundant room to grow. I have a lot,” he said. “When I have that constant supply of water, that is just gold.”

***

Chris Warren is a freelance writer based in Arkansas. The reporting trip to Kenya was funded by Winrock International.

LEAVE A REPLY

Please enter your comment!
Please enter your name here