Improving agricultural water management (AWM) is critical to increasing and ensuring food security and improved nutrition, especially given expected growing food demands and climate variability. A key component of AWM is ensuring that technologies and practices are sustainable, without the need for continued public funding. This report is the first in a series on business investment opportunities in AWM that offers conclusions on an adapted business model framework that considers returns for profit and socioeconomic development.
Business model scenarios and suitability: Smallholder solar pump-based irrigation in Ethiopia identifies and outlines three business model scenarios based on the value proposition to supply water to smallholder farmers for irrigated agricultural production. These business models for solar-powered irrigated agriculture are outlined as followed:
- Business Model 1: Individual Purchase
- Business Model 2: Outgrower or Insurer Scheme
- Business Model 3: Supplier Model with Bundled Financing
Additionally, a new methodology for mapping the suitability of solar energy based irrigation pumps is included within the scenario based report.
Through an analysis of potential gains and benefits, the scenarios suggest that direct purchase of solar pumps by farmers is feasible, and that out-grower schemes and pump supplier options with bundled financing offer promising solutions. The report offers development actors and investors evidence-based information on the suitability and sustainability of solar pump irrigation and Ethiopia, while also providing suggestions as to how smallholders can invest in individually owned, smallholder photovoltaic (PV) solar pumps.
To learn more, please view our technical brief on Mapping the suitability of solar energy-based irrigation pumps in Ethiopia or read the full report on Business model scenarios and suitability.