Speaking at a side event of the International Off-grid Renewable Energy Conference (IOREC) currently under way in Nairobi, three experts in the solar power sector decried the lack of capital from banks for the agricultural industry.

 

Kenya general manager Charles Ahenda-Bengo said a lack of capital is the single biggest problem for farmers wanting to invest in renewable energy farming technologies, such as solar pumps.

 

"Banks in Kenya are risk averse when it comes to funding agriculture. If banks could fund just 40 percent of the required funds, this would be ideal," he said.

 

His sentiments were echoed by Sunculture Kenya co-founder Charlie Nichols, another entrepreneur in solar irrigation solutions, who said that in addition to roping in banks to become partners in agri-business, government could also provide subsidies.

 

"If the government gave just 30 percent support to farmers in subsidies, it would be great for farmers," said Nichols. Currently, the only subsidies the Kenyan government provided for farmers was for purchasing fertilisers.

 

Ahenda-Bengo said his company, which provided solar irrigation solutions to farmers, sold its solar pumps at US650 each, a price that was too high for most Kenyan farmers.

 

"We have tried approaching local banks for partnerships but they indicate that they do not want to take the risks that come with agriculture,"he said.

 

However, he recognised government effort in incorporating large-scale agriculture as one way of ensuring food security, saying that in the last budget the government had announced it would put at least one million hectares under irrigation.

 

Nichols decried the lack of reliable data as another big problem for entrepreneurs wanting to invest in solar irrigation solutions in Kenya.

 

In contrast to Kenya and Africa, the Indian subcontinent had made big strides in solar irrigation, Rajasthan state representative Raghav Agarwal said.

 

The Indian government fully supported the solar irrigation programme by paying at least 86 percent of the costs for farmers, especially small-scale farmers.

 

"For the larger farms, the banks in India are readily funding farmers for solar irrigation. Farmers in India are already enjoying the benefits as most of them have seen their income go up four fold," Agarwal said.

 

The unreliability of electricity and the high cost of diesel in India were factors that had encouraged the quick uptake of solar powered irrigation.

 

Participants at the event believed the Indian government was over-subsidising agriculture and this might not be sustainable.

 

At the close of the conference, various researchers in solar irrigation warned that financing solar powered irrigation was an expensive venture and should be viewed as a long-term investment. 

 

Participants heard that even developed countries such as Germany and the United States spent billions of dollars to subsidise solar energy projects in their own countries.

 

Source : www.sabc.co.za