Business model scenarios and suitability: smallholder solar pump-based irrigation in Ethiopia. Agricultural Water Management – Making a Business Case for Smallholders

Abstract

Research ReportsThe publications in this series cover a wide range of subjects-from computer modeling to experience with water user associations-and vary in content from directly applicable research to more basic studies, on which applied work ultimately depends. Some research reports are narrowly focused, analytical and detailed empirical studies; others are wide-ranging and synthetic overviews of generic problems.Although most of the reports are published by IWMI staff and their collaborators, we welcome contributions from others. Each report is reviewed internally by IWMI staff, and by external reviewers. The reports are published and distributed both in hard copy and electronically (www.iwmi.org) and where possible all data and analyses will be available as separate downloadable files. Reports may be copied freely and cited with due acknowledgment. About IWMIIWMI's mission is to provide evidence-based solutions to sustainably manage water and land resources for food security, people's livelihoods and the environment. IWMI works in partnership with governments, civil society and the private sector to develop scalable agricultural water management solutions that have a tangible impact on poverty reduction, food security and ecosystem health.

Establishing irrigation potential of a hillside aquifer in the African highlands

“…Worqlul, Collick, Rossiter, Langan, and Steenhuis () showed that in the Gilgel Abay basin less than 0.1% of the potential irrigable land could be irrigated with the available surface water resources. The greatest weakness in these studies is whether sufficient surface or groundwater is available for planned irrigation (Otoo, Lefore, Schmitter, Barron, & Gebregziabher, ).…”

Improving the availability and effectiveness of rural and “Micro” finance for small-scale irrigation in Sub-Saharan Africa: a review of lessons learned

“…Giordano et al (2012) estimated that investments in motorized pumps could benefit some 185 million farmers and generate net revenues of around USD 22 billion 9 . Otoo et al (2018) estimate the potential area that could be irrigated by solar photovoltaic (PV) pumps in Ethiopia to be between 1.1 and 6.8 Mha, depending on assumptions about depth to groundwater. Small motorized pumps, and more specifically solar pumps, have the additional potential benefit of being useful for multiple purposes, by women as well as men (Burney et al 2013;Nigussie et al 2017).…”

“…Farmers more often rely on informal lenders, especially relatives and friends or their own resources, as found in Ghana by Namara et al (2014). Community-based semi-formal lenders are growing in importance in many countries, but often do not offer medium-term loans that would support the purchasing of equipment such as pumps (Otoo et al 2018;Ayele 2015). Financial service providers face high costs and risks in lending to a dispersed population of smallholders; but providing credit for irrigated agriculture has the advantage of reducing risk and seasonality compared to rainfed farming, and pumps may be offered as collateral for the loan.…”

“…In medium-and low-potential areas, the availability of financing for SSI investments is even more limited. Otoo et al (2018) also found that few MFIs in Ethiopia offer financing for irrigation equipment that is affordable and tailored to such large purchases; at the time of writing, these typically range from around USD 75 for manual water-lifting equipment to USD 600 for solar pumps (without energy storage) depending on the country and local markets.…”

“…Recently, substantial attention has been focused on the potential for expanding the use of solar PV irrigation pumps (Burney et al 2013;FAO-GIZ 2015;IRENA 2016;Otoo et al 2018). Otoo et al (2018) analyzed how the growing demand for solar PV irrigation pumps could be met in Ethiopia, given the current weaknesses in the private sector value chain, and limited public finances and capacity. They use a business model framework to identify opportunities for private market chain actor investments that would not require substantial donor input but would bring long-term benefits.…”