East Africa agricultural value chain opportunity scoping for productive use of decentralized renewable energy

opportunity scoping
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Situation

To deliver the most significant impacts for African smallholder farmers who are the most affected by climate change crises, it is essential to make targeted investments in promoting decentralized renewable energy (DRE) and climate change solutions. Using this lever can also help improve the performance of high-potential agriculture value chains and market systems that are commercially attractive and offer opportunities for smallholder farmers—including women and youth—to sustainably improve their incomes, livelihoods, and resilience to climate change-induced shocks while fostering a supportive policy environment and ecosystem.

The climate change solutions program of a global foundation has the goal to assist developing countries mitigate and respond to the negative impacts of climate change. A major focus of the program is supporting practical solutions that increase the commercial use of renewable energy in rural areas in developing countries, where nearly 1 billion people lack access to electricity. The foundation required a high-quality study to provide insights into how to sustainably increase the adoption of decentralized renewable energy technologies and climate change solutions in the agriculture sector in Kenya, Tanzania, and Uganda.

Industries
Strategy, Data & Insights
Market Analysis & Opportunity Scoping
Smallholder Agriculture Development
Public Policy
Program Design & Business Development
Agribusiness & Food Systems
Climate Action
Electric Power & Clean Energy
Engagement

The foundation engaged ORI to develop structured selection criteria and carry out extensive primary and secondary research to arrive at the highest impact value chains for philanthropic investment via productive use of energy. In addition, the foundation required a detailed stakeholder map, potential implementation partners, and a scan of the enabling environment as it relates to the development of DRE technologies. In delivering this engagement, ORI drew on its extensive experience conducting large-scale and complex studies, and our thought-leading insights. We took a structured approach to identify, longlist, shortlist and prioritize agriculture value chains with strong potential to generate measurable impact by supporting practical DRE and climate change solutions in East Africa.

ORI supported the foundation’s goal by:

  • Framing the rationale for focusing on agriculture value chains.
  • Building study methodology, a comprehensive assessment framework, and screening criteria for examining attractive value chains. Criteria included the value chain’s market potential, opportunity for inclusion, food security and nutritional value, climate vulnerability, and opportunity to harness the power of renewable energy solutions to deliver climate change resiliency, among other things.
  • Collating the findings from the Foundation’s recent program evaluations, which yielded several lessons and recommendations.
  • Conducting extensive research, analysis and screening of a universe of value chains to develop a longlist of twenty high-potential value chains across the three countries.
  • Undertaking further research, analysis, and interviews with industry actors and stakeholders to arrive at a shortlist of seven highest-ranking value chains and market systems.
  • Carrying out detailed analysis to arrive at the four highest priority value chains with the opportunity to fully leverage solar energy solutions for better market participation while achieving broader social and development impact outcomes.
  • Developing intervention strategies that would best catalyze transformative outcomes and designing a regional program. This was to unlock the highest-impact opportunities for decentralized renewable energy and climate change solutions, ensuring the proposed solutions are practical and impactful.
  • Investigating the capabilities of stakeholders and partners and recommending those best suited to work with the foundation.
Outcomes
  • ORI helped the foundation better understand the “demand side” of DRE technologies and climate change solutions in agriculture—and to select and confirm the four most attractive value chains for development support.
  • The Foundation actively participated in the ORI program design framework, demonstrating their commitment to the project. The Foundation also engaged vetted implementation partners in each country and more deeply explored the potential of each partner to deliver the various aspects of a scale-up program.
  • Integration of best practices in gender equity and inclusion by building on ORI’s program design expertise and experience leveraging the power of DRE technologies in underserved, off-grid rural locations. Example use cases at micro- and small-scale were solar water pumps for irrigated vegetable production and solar drying or cooling solutions for fruits and vegetables as a market pathway. Such technologies can play a vital role in reducing vulnerability to climate-related shocks while enhancing incomes for women.
  • For rural enterprises—including dairy co-operatives and milk collection centers—an example of solar energy use case is milk chilling at the co-operative level. Rural-based milk chilling solutions help reduce the perishability of the product and enable farmers and their co-operatives to negotiate more favorable terms with off-takers, increasing farmer incomes while catalyzing re-investment by farmers in productivity-enhancing technologies.
  • The Foundation deepened its strategic anchors in funding decisions, including (a) focus on solutions that can be utilized in high-value agricultural value chains, (b) promotion of DRE technologies in value chains that are supported by strong market demand, and (c) tackling the sustainability of grant-supported interventions via scaling business and revenue models without dependence on grant funding.
  • The findings underscored the significant potential of the proposed intervention strategies to drive transformative change and deliver tangible benefits to the communities in East Africa.