Renewable energy services for agribusinesses and value addition
Renewable energy services for agribusinesses and value addition
Type 3: Borderland with fragile context and underdeveloped regional integration infrastructure.
Business Model Description
Deploy solar-powered equipment for agro-processing and livestock processing activities such as milling, cooling, drying, and powering abattoirs through lease-to-own or pay-as-you-go models. Target cooperatives, processing hubs, abattoirs, and trader groups in off-grid and weak-grid areas. Partner with energy service companies and agri-focused financiers. Blend private investment with results-based financing and grants to reduce upfront costs and de-risk adoption.
How is this information gathered?
Cross-border investment opportunities with potential to contribute to sustainable development are based on Borderlands SDG Investor Maps.
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Region
Sector Classification
Renewable Resources and Alternative Energy
Alternative Energy
Borderland development need
Frequent outages and limited grid connectivity impede productive use of electricity for enterprises. In West Pokot, cooperatives report power cuts up to six times a week, increasing reliance on diesel generators and raising costs by as much as 300 USD monthly. These challenges restrict milk processing, cold storage, irrigation, and small manufacturing. Despite high solar potential, uptake remains low due to high upfront costs, limited infrastructure, and weak financing mechanisms. The inability to power rural businesses sustainably constrains job creation and local value addition. (18, 21)
Borderland policy priority
Karamoja’s KIDP3 promotes solar stations, mini solar water systems, and repairs to existing solar installations. It also supports biogas for cooking and lighting. West Pokot’s CIDP highlights solar tech innovation, clean jiko distribution, and technology transfer for sustainable off-grid energy. Both plans support awareness campaigns and training to accelerate adoption of solar and biogas solutions across public and private use cases. (1, 2)
Gender inequalities and marginalization issues
Women-led enterprises and agro-pastoral households struggle to adopt solar and biogas systems due to high upfront costs and limited financial tools tailored to their needs. Women's role in managing household energy is high, yet they remain underrepresented in energy project planning and technical training. Expanding access requires inclusive design and gender-sensitive financing mechanisms. (11, 12, 17)
Investment opportunities introduction
High solar irradiation creates favorable conditions for off-grid solar powering cold storage, irrigation, and dairy processing. Biogas has strong potential in agro-pastoral areas where animal waste is readily available. Investment in productive energy use can unlock SME growth, improve food preservation, and reduce fuelwood dependency. (11, 12)
Adoption of solar for productive use and biogas is limited by lack of affordable credit, insufficient technical capacity, and low awareness among end users. Most SMEs lack working capital for energy investments, and few service providers operate in remote borderland areas. Maintenance and after-sales services are also limited. (11, 12)
Solar Technology and Project Developers
Pipeline Opportunity
Renewable energy services for agribusinesses and value addition
Deploy solar-powered equipment for agro-processing and livestock processing activities such as milling, cooling, drying, and powering abattoirs through lease-to-own or pay-as-you-go models. Target cooperatives, processing hubs, abattoirs, and trader groups in off-grid and weak-grid areas. Partner with energy service companies and agri-focused financiers. Blend private investment with results-based financing and grants to reduce upfront costs and de-risk adoption.
Business Case
Market Size and Environment
< USD 50 million
Over 100 cooperatives and agri-processors across Karamoja and West Pokot lack reliable energy, relying on costly diesel. Their unmet energy needs for cooling, milling, and drying define a clear, scalable market for solar-powered productive-use systems across the borderland. (26)
Indicative Return
> 25%
Solar-powered agri-use systems reduce diesel OPEX by up to 70% and enable year-round production. When deployed via pay-as-you-go or leasing, and anchored to cooperatives, they generate 20–35% ROI within 2–4 years, supported by industry benchmarks and ongoing initiatives. (26)
Investment Timeframe
Short Term (0–5 years)
Productive-use solar investments reach breakeven within 2–4 years. Year 1 covers site selection and setup, year 2 sees revenue generation, and years 3–4 bring ROI recovery. This mirrors rollout cycles in similar rural energy projects targeting agri-businesses. (26)
Ticket Size
< USD 500,000
Market Risks and Scale Obstacles
Capital - CapEx Intensive
Capital - Limited Investor Interest
Business - Supply Chain Constraints
Expected Financing Model
Blended financing (risk sharing and public support)
IOA Business Criteria
Demand from over 100 cooperatives and processors across the borderland shows strong market potential, with diesel replacement offering quick savings and productivity gains. (26)
Targets solar-powered equipment for agro-processing (cooling, milling, drying) through PAYGO or lease models, focusing on cooperatives and rural processors. (26)
Can scale through anchor clients and bundling with energy service providers; aligns with regional trends in solar for productive use in agri-value chains. (13, 14, 15)
Models used by SolarGen or Zeronet in similar East African rural contexts show viability of solar for agro-enterprises using blended finance. (20, 22)
Impact Case
Sustainable Development Need
Most agri-processors in the borderland rely on costly and unreliable diesel generators, limiting productivity and increasing operational costs for cooperatives and trader groups. (13, 14, 20, 22)
Lack of access to affordable, clean energy hinders post-harvest handling and value addition, contributing to high food losses and limited income generation. (13, 14, 20, 22)
Karamoja and West Pokot are mostly weak-grid and off-grid areas. Less than 1% of households are grid-connected in parts of Karamoja, and no viable power alternatives exist for rural enterprises. (13, 14, 20, 22)
Gender & Marginalisation
Women-led cooperatives often lack reliable power for small-scale processing, limiting income diversification and access to markets. (20, 21)
High upfront costs of solar-powered equipment exclude marginalized groups (especially youth and women) from adopting productive-use technologies. (21, 22)
Energy poverty disproportionately affects women, who spend long hours collecting fuel and working in poorly lit, low-productivity environments. (14, 21)
Expected Development Outcome
Solar-powered systems enable agro-processors and cooperatives to expand operations, reduce losses, and increase earnings through consistent and cost-effective energy access. (13, 14, 15)
Renewable energy for processing stimulates value addition and off-farm employment, particularly in youth- and women-led enterprises. (13, 14, 15)
Gender & Marginalisation
Solar-powered processing reduces labor burden and enables women-led cooperatives to expand income-generating activities such as dairy, milling, and poultry. (20, 22)
Pay-as-you-go models and cooperative-based distribution lower barriers to energy access for pastoralists and underserved rural households. (20, 22)
The deployment of renewable energy systems creates opportunities for youth in installation, maintenance, and entrepreneurship, supporting local employment and skills development. (20, 22)
Primary SDGs addressed
7.1.1 Proportion of population with access to electricity
7.2.1 Renewable energy share in the total final energy consumption
8.2.1 Annual growth rate of real GDP per employed person
13.2.2 Total greenhouse gas emissions per year
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Without targeted efforts, women and low-income groups may lack access to solar leasing due to financing barriers, deepening existing inequalities.
Installation of solar systems on communal land could trigger disputes if community consultation and benefit-sharing are not ensured.
Improper disposal of solar equipment (e.g., batteries) can lead to environmental hazards, especially in regions lacking recycling infrastructure.
Introduction of external energy companies may displace or crowd out local informal energy providers if partnerships are not inclusive.
Impact Risks
High upfront costs and weak financing mechanisms may limit adoption by cooperatives and traders, delaying access to clean energy and limiting productivity and income growth.
If women and marginalized groups lack targeted support, they may be excluded from leasing and training opportunities, reinforcing existing inequalities in energy access and business growth.
Improper disposal of solar equipment or lack of local capacity for maintenance may lead to environmental harm and reduce long-term sustainability of renewable energy systems.
IMP Impact Classification
What
Expands energy access for agri-processing, boosting productivity, reducing carbon emissions, and enhancing rural livelihoods.
Who
Directly impacts cooperatives, processors, and trader groups in off-grid areas; indirectly benefits rural communities and smallholder farmers.
Risk
Limited financing, supply chain gaps, and lack of technical capacity may delay adoption and reduce impact.
Enabling Environment
General Policy Environment
Karamoja Integrated Development Plan 3 (KIDP3): Prioritizes agro-industrialization and climate-smart agriculture, including promotion of solar-powered processing, irrigation, and storage to improve food security and resilience in off-grid areas. (1)
West Pokot County Integrated Development Plan (CIDP): Emphasizes renewable energy access for agro-processing, promotion of off-grid solar solutions, and development of energy-efficient technologies for rural economic growth. (2)
Uganda Energy Policy (2023): Advocates for expanding renewable energy to unserved communities, including solar mini-grids and solar-powered agricultural equipment, to drive inclusive rural industrialization. (27)
Kenya Energy Act (2019): Provides a legal framework to promote renewable energy investments, supporting off-grid and pay-as-you-go solar solutions for productive use in rural agribusiness and industry. (28)
Uganda Renewable Energy Policy (2007): Uganda Renewable Energy Policy (2007)Targets increasing the use of modern renewable energy from 4% to 61% of total consumption by prioritizing decentralized solar energy for productive use, especially in agriculture. (29)
General Cross-border Trade Policy and Regulatory environment
EAC Customs Union Protocol (2005): Facilitates free movement of goods within the East African Community, including duty-free treatment for eligible renewable energy equipment crossing borders like solar panels and agro-processing units. (35)
EAC Common External Tariff (CET): Classifies renewable energy equipment under low or zero-duty categories, reducing import costs for solar technologies used in agro-processing and cooling across Kenya and Uganda. (36)
EAC Non-Tariff Barriers (NTB) Act (2017): Aims to eliminate NTBs that slow cross-border trade in goods like solar-powered machinery; supports smoother movement of equipment for off-grid agro-processing solutions. (37)
IGAD Protocol on Transhumance (2021, not yet ratified): Though focused on pastoral mobility, it promotes harmonized resource access, including infrastructure and energy services, across borders—relevant for powering shared livestock processing hubs. (38)
African Continental Free Trade Area (AfCFTA) Agreement: While broader in scope, it facilitates regional value chains, including renewable energy technologies and agro-processing services, reducing regulatory and tariff barriers across member states. (39)
Capital structure and funding
Sources of Capital: Existing capital in the region comes from a mix of national government funds, international donor grants, and concessional loans. Programs like the EU-funded NDMA and USAID Kuza support agro-processing and rural electrification through subsidies and technical assistance. (21)
Average Capital Size: Average capital sizes for existing projects vary: community-scale solar agro-processing hubs require $50,000–$200,000, while larger cold chains or mini-grid facilities may reach $500,000–$1 million. Smaller initiatives are often grant-financed, while mid-sized ventures blend public and private funds. (21)
Trends of Capital Flows: Capital flow trends show a rise in blended finance, with development partners prioritizing resilience and productive-use energy. West Pokot and Karamoja have received targeted support for solar-based agro-processing, cold storage, and cooperative-led agribusinesses in recent years. (21)
Impact of Conflict on Capital Flows: Local conflicts have historically deterred private capital, but recent cross-border peace agreements and disarmament initiatives have boosted investor confidence. Stable zones now attract more support for infrastructure and energy access. (21)
Development Partner Support: Governments and development partners provide investment support via loan guarantees, infrastructure co-financing, and technical assistance. Support is strongest in agriculture, energy, and cooperatives, aligning with the focus on off-grid renewable-powered value chains. (21)
Financial incentives
Sustainable Energy Fund for Africa (SEFA): Managed by the African Development Bank, SEFA provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. It offers technical assistance and concessional finance instruments to remove market barriers and improve the risk-return profile of individual investments. (40)
Kenya's Draft National Green Fiscal Incentives Policy Framework: This policy proposes tax exemptions and credits for off-grid renewable energy installations, aiming to expand energy access in underserved areas. It also suggests concessional funding for pre-investment geothermal resource assessments to de-risk investments. (41)
Uganda Energy Credit Capitalisation Company (UECCC): UECCC offers concessional loans and partial risk guarantees to financial institutions, encouraging lending for renewable energy projects. This support has led to the creation of dedicated energy loan products, such as Centenary Bank's "Cente Solar" and Equity Bank Uganda's "Green Loan." (42)
Import Duty Exemptions in Uganda: Uganda exempts import duties on specialized solar energy equipment, including solar panels, inverters, and batteries. This policy reduces the cost of renewable energy technologies, facilitating their adoption in agro-processing. (43)
Security Environment
While large-scale raids have declined, sporadic attacks persist, disrupting livestock markets and deterring investment in processing and solar infrastructure reliant on stable trade flows. (44, 45, 21)
Traders transporting solar-powered equipment or agri-products may face bribes or theft at informal checkpoints. This raises costs and limits scalability of decentralized PAYGO models. (18, 44, 45)
The lack of permanent security presence and continued reliance on informal justice mechanisms create impunity for asset theft, threatening investment in distributed solar systems. (44, 45, 46)
Seasonal conflicts, particularly involving Turkana and Pokot communities, can disrupt livestock trade and agro-processing hubs that depend on regional inputs, especially near water infrastructure used for solar-powered cooling. (44, 45, 48)
Persistent conflict risks limit bank willingness to lend to cooperatives or SMEs in the sector. High collateral demands and fear of loan default tied to mobility restrictions affect working capital and leasing options. (20, 21, 22)
Risk mitigation strategies
Leveraging local institutions helps build trust, facilitates inclusive outreach, and reduces exposure to elite capture or conflict over benefits.
Use SACCOs and local saving groups to deliver solar and processing tech with adapted repayment models and shared ownership, boosting local buy-in.
Integrate women in training, ownership models, and leadership of cooperatives to enhance equity, social stability, and long-term sustainability.
Deploy portable solar and agro-processing solutions to avoid overconcentration of assets in conflict-prone areas and maintain flexibility.
Invest in strengthening cross-border peace committees and livestock route mediation efforts to reduce disruption risks to trade and infrastructure.
Actors in IOA Space
References
Sector and Subsector Sources
- (1) Ministry for Karamoja Affairs & Office of the Prime Minister. (2021). The Third Karamoja Integrated Development Plan (KIDP 3) 2021–2025.
- (2) County Government of West Pokot. (2023). Third County Integrated Development Plan (CIDP) 2023–2027.
- (3) Catley, A., et al. (2021). Introducing pathways to resilience in the Karamoja Cluster. Pastoralism, 11(28). https://doi.org/10.1186/s13570-021-00214-4
- (4) UNDP Africa Borderlands Centre. (2022). The Karamoja Cluster: Rapid Conflict Analysis and Gender Assessment (Kenya and Uganda).
- (5) Kenya High Commission Kampala. (2025). Kenya-Uganda Trade & Investments. Accessed February 2025. https://www.kenyamissionkampala.ug/kenya-uganda-trade-investments
- (6) Columbia SIPA. (2020). Ethical Cross-Border Trading between Kenya and Uganda by Women-led Micro and Small Enterprises.
- (7) Aklilu, Y. (2017). Livestock Trade in Karamoja, Uganda: An Update of Market Dynamics and Trends. USAID. https://karamojaresilience.org/wp-content/uploads/2021/05/tufts_1803_krsu_livestock_trade_karamoja_v2_online.pdf
- (8) Arasio, R.L., and E. Stites. 2022. “The Return of Conflict in Karamoja, Uganda: Community Perspectives.” Karamoja Resilience Support Unit (KRSU), Feinstein International Center, Friedman School of Nutrition Science and Policy at Tufts University, Kamp
- (9) Interpeace, IGAD, & FAO. (2023). Conflict, Climate Change, Food Security and Mobility in the Karamoja Cluster. https://www.interpeace.org/wp-content/uploads/2024/01/Conflict-climate-change-food-security-and-mobility-in-the-Karamoja-Cluster.pdf
- (10) Armed Conflict Location & Event Data Project (ACLED). (2025). Regional Overview – Africa, February 2025. https://acleddata.com/2025/02/10/africa-overview-february-2025
- (11) Tonny Odokonyero and Francis Mwesigye. “Targeting and Subsidizing Electricity Connection: The case of a Hybrid Financing Framework in Uganda”, UDB, Policy Briefing Note No. 2023/001, (April 2023): https://udbl.co.ug/UDB%20Electricity%20Connection%20Intervention%20Policy%202.pdf.
- (12) Patrick Wamalwa et al. “Adoption of Improved Biomass Cook Stoves: Case Study of Baringo and West Pokot Counties in Kenya”, Journal of Sustainable Bioenergy Systems, (June 2022): https://www.scirp.org/journal/paperinformation?paperid=119421.`
- (13) Lena Dente. “Understanding the Opportunities and Challenges of a Global Renewable Energy Goal in the Context of COP Talks “, World Future Council, Accessed February 2025: https://www.worldfuturecouncil.org/global-renewable-energy-goal/#:~:text=Scaling%20up%20renewable%20energy%20may,for%20both%20agriculture%20and%20solar.
- (14) Alex-Oke, T., Bamisile, O., Cai, D., Adun, H., Ukwuoma, C. C., Tenebe, S. A., & Huang, Q. (2025). Renewable energy market in Africa: Opportunities, progress, challenges, and future prospects. Energy Strategy Reviews, 59, 101700. https://doi.org/10.1016/j.esr.2024.101700
- (15) Lighting Africa. 2020. The Market Opportunity for Productive Use Leveraging Solar Energy (PULSE) in Uganda. Washington, DC: World Bank Group. https://www.lightingglobal.org/wp-content/uploads/2022/12/Uganda-PULSE-Report_2022.pdf
- (16) GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit). Uganda: Renewable Energy – Factsheet. Bonn/Eschborn: GIZ, 2022. Available at: https://www.giz.de/de/downloads/giz2022-en-uganda-renewable-energy.pdf
IOA Sources
- (18) Interview with Foundation supporting access to finance for entrepreneurs in West Pokot
- (19) Interviews with main commercial banks in Moroto
- (20) Interviews with private renewable energy actor in West Pokot
- (21) Interview with Climate Impact Investing Fund with operations in West Pokot
- (22) Interview with Energy Solutions company with operations in Kenya and Uganda
- (26) Estimations based on interview data with renewable energy actors in the IOA space and benchmark regional studies.
- (27) Ministry of Energy and Mineral Development (Uganda). The Energy Policy for Uganda 2023. Kampala: Government of Uganda, 2023.
- (28) Republic of Kenya. The Energy Act, 2019. Nairobi: National Council for Law Reporting with the Authority of the Attorney-General.
- (29) Ministry of Energy and Mineral Development (Uganda). Renewable Energy Policy for Uganda. Kampala: Government of Uganda, 2007.
- (30) Republic of Uganda. Electricity Act, 1999. Kampala: Uganda Gazette Supplement No. 3, Act 6.
- (31) Republic of Kenya. Energy (Mini-Grid) Regulations, 2021. Nairobi: Energy and Petroleum Regulatory Authority (EPRA).
- (32) Electricity Regulatory Authority (Uganda). Renewable Energy Feed-in Tariff (REFiT) Guidelines, 2016. Kampala: ERA.
- (33) Republic of Kenya. Value Added Tax (Amendment) Act, 2020. Nairobi: National Council for Law Reporting with the Authority of the Attorney-General.
- (34) Republic of Uganda. Environmental Impact Assessment Regulations, 1998. Kampala: Uganda Gazette Legal Notice No. 13, under the National Environment Act Cap 153.
- (35) East African Community (EAC). Protocol on the Establishment of the East African Community Customs Union. Arusha: EAC Secretariat, 2005.
- (36) East African Community (EAC). Common External Tariff (CET). Arusha: EAC Secretariat, current edition as amended.
- (37) East African Community (EAC). Non-Tariff Barriers (Elimination) Act, 2017. Arusha: EAC Secretariat.
- (38) Intergovernmental Authority on Development (IGAD). Protocol on Transhumance in the IGAD Region. Djibouti: IGAD, 2021.
- (39) African Union Commission. Agreement Establishing the African Continental Free Trade Area (AfCFTA). Kigali: African Union, 2018.
- (40) African Development Bank (AfDB). Sustainable Energy Fund for Africa (SEFA). Available at: https://www.afdb.org/en/topics-and-sectors/initiatives-partnerships/sustainable-energy-fund-for-africa
- (41) Ernst & Young (EY). Kenya publishes Draft National Green Fiscal Incentives Policy Framework. Available at: https://www.ey.com/en_gl/technical/tax-alerts/kenya-publishes-draft-national-green-fiscal-incentives-policy-fr
- (42) World Resources Institute Africa. Unlocking Local Private Capital to Finance Productive Use Renewable Energy (PURE) Sector. Available at: https://africa.wri.org/sites/default/files/2024-09/unlocking-local-private-capital-finance-productive-use-renewable-energy-pure-sector.pdf
- (43) Sun-Connect East Africa / GIZ. Solar Taxation Handbook 2022. Available at: https://sun-connect.org/wp-content/uploads/SolarTaxationHandbook2022.pdf
- (44) Gray, S., Sundal, M., Wiebusch, B., Little, M. A., Leslie, P. W., & Pike, I. L. (2003). “Cattle Raiding, Cultural Survival, and Adaptability of East African Pastoralists”. Current Anthropology, 44(S5), S3–S30. Retrieved from: https://www.journals.uchicago.edu/doi/full/10.1086/377669
- (45) Stites, E. (2022). Conflict in Karamoja: A Synthesis of Historical and Current Perspectives, 1920–2022. Karamoja Resilience Support Unit (KRSU), Feinstein International Center, Tufts University.
- (46) USAID. (2023). Applied Political Economy Analysis for the Karamoja Cluster. Washington, DC: USAID.
- (47) Interview with cross-border trade associations.
- (48) US Agency for International Aid (2019). Off-Grid Solar Market Assessment - Kenya. Power Africa Off-grid Project.
- (49) National Planning Authority. National Development Plan III (NDPIII) 2020/21 – 2024/25
- (50) Mokveld, K. and von Eije (RVO.nl), S. (2019). Final Energy report Uganda. https://www.rvo.nl/sites/default/files/2019/02/Final-Energy-report-Uganda.pdf