Solar Powered Irrigation Systems
Solar Powered Irrigation Systems
Business Model Description
Set up and operate companies that manufacture, distribute and/or install affordable solar-powered irrigation pumps for increased agricultural production
Expected Impact
Improve agricultural productivity significantly, benefitting smallholder farmers and increasing food security and economic development.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
Disclaimer
UNDP, the Private Finance for the SDGs, and their affiliates (collectively “UNDP”) do not seek or solicit investment for programmes, projects, or opportunities described on this site (collectively “Programmes”) or any other Programmes, and nothing on this page should constitute a solicitation for investment. The actors listed on this site are not partners of UNDP, and their inclusion should not be construed as an endorsement or recommendation by UNDP for any relationship or investment.
The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.
Investment involves risk, and all investments should be made with the supervision of a professional investment manager or advisor. The materials on the website are not an offer to sell or a solicitation of an offer to buy any investment, security, or commodity, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
Country & Regions
- Zanzibar: Pemba
- Zanzibar: Kaskazini
Sector Classification
Food and Beverage
Development need
Agriculture is one of the main sectors in Zanzibar, contributing 27.1% of GDP (1). Despite the sector's key status in the economy, Zanzibar lacks significant production and processing capacity as well as private sector investments in the sector which leads to food insecurity, import-dependency and food availability being highly determined by external factors (2).
Policy priority
The Government, through its Vision 2050, aims to ensure that everyone has equitable access to sufficient quantities of safe, nourishing, and culturally appropriate food at all times for an active and healthy life, as well as to protect the most vulnerable members of society from the negative effects of emergency situations on their food security and nutritional status (3).
Gender inequalities and marginalization issues
In Zanzibar, women are estimated to undertake 80% of the agricultural, forestry and fishing labor (9). However, statistics show that to only 23. 6% households reported that the decision for spending the income from agricultural crops comes from women (7).
Investment opportunities introduction
Although the local demand for agricultural products is increasing as the imports of fresh food is increasing as well, only less than half of the arable land is under cultivation in Zanzibar. Additionally, the growth of tourism attracts a high demand for fishery, aquaculture and agricultural products (6).
Key bottlenecks introduction
Low technical skills and financial investment among farmers are key challenges to the agricultural sector (4). Only 7,7% of the national budget is dedicated to agriculture. This low contribution of government leads to tempered sectoral advancement due to lack of research and development and human resource development activities (9).
Food and Agriculture
Development need
Only 139.415 hectare (43%) of arable land are under cultivation in Zanzibar(4). Essential food and food stuff are import-dependent to make up for the lack of domestic production. There is a need of diversifying agro-products to decrease import dependent sector, contribute to the local consumption, increase value addition and agricultural productivity (10).
Policy priority
The Government is committed to transform the agricultural sector towards higher productivity, commercialization level and increase farmer income for improved livelihood while guaranteeing food and nutrition security (6).
Gender inequalities and marginalization issues
Despite being the primary contributors to the agriculture industry, women have limited access to and control over resources used in production, (7) including land, agricultural inputs, market access and financing, and cutting-edge technology. Additionally, the majority of MSMEs are either wholly or partly owned/run by women and youth, which play a leading role in agro-processing (11).
Investment opportunities introduction
In Zanzibar the majority of the agricultural products are exported in raw form without any value addition (3) while imports on food stuff including process food is increasing (1). In addition to the food processing, crop development, modern irrigation systems and water management are other areas of opportunity in the archipelago (2).
Key bottlenecks introduction
A lack of a comprehensive framework for enhancing food security and technical expertise on post-harvest losses, an overreliance on rain-fed agriculture, inadequate budgetary support, an inadequate rural microfinance system, and poor marketing of agricultural products are some of the major challenges (8).
Agricultural Products
Pipeline Opportunity
Solar Powered Irrigation Systems
Set up and operate companies that manufacture, distribute and/or install affordable solar-powered irrigation pumps for increased agricultural production
Business Case
Market Size and Environment
34.6% of households own land for agriculture or grazing
Household Budget Survey shows that 34.6% of total 292,796 households own land for agriculture or grazing in Zanzibar, with an average size of land used for agriculture per household being 1.6 acre at the national level, which indicates that there is a solid market to explore for solar-powered irrigation (1, 7).
The market size for all types of irrigation technologies in Tanzania was estimated to be USD 86.2 million in 2018 and expected to grow to USD 151.3 million by 2022 (11).
Indicative Return
> 25%
Smallholder irrigated farms have two to three times higher yields than rain-fed farms. Small-scale irrigation technology present IRRs of up to 28% (11).
Investment Timeframe
Short Term (0–5 years)
Solar water pumps have higher capital costs and lower operating costs than competing pump technologies with a payback in 4-6 years (11).
Ticket Size
< USD 500,000
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
In Zanzibar, as a priority sector, agriculture contributes 27.1% (1) to the GDP while also being one of the main sectors that have the largest GHG emmission shares. Agricultures GHG emission share is 28% (15).
Zanzibari smallholder farmers are highly dependent of rainfall and traditional farming, thus characterized with limited use of improved productivity enhancing technologies (12).
Agricultural production is largely rainfed but significant ammount is lost through surface runoff. There is need to harvest and store water to increase agricultural production (13).
Gender & Marginalisation
Women undertake 80% of the agricultural, forestry and fishing labour, however are not empowered enough while making decisions for the agricultural work.
Expected Development Outcome
Solar-powered irrigation systems promote the growth of low-carbon irrigated agriculture and decrase the carbon footprint of the sector.
Solar powered irrigation systems will decrease the pressure and exhaustion of agriculture on limited water resources.
Gender & Marginalisation
Solar powered irrigation would improve the lives of impoverished rural farmers, as the productivity will be improved, especially women, who perform 80% of the labor in agriculture.
Primary SDGs addressed
1.2.1 Proportion of population living below the national poverty line, by sex and age
According to HBS 2019/20, the proportion of the population living below the national basic needs' poverty line was 25.7% in total (17).
N/A
2.1.1 Prevalence of undernourishment
2.3.2 Average income of small-scale food producers, by sex and indigenous status
Malnutrition rate in Zanzibar was reported at 0.23% in 2018 according to Zanzibar Health Bulletin (17).
N/A
N/A
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Outcome Risks
Solar powered irrigation systems may fail to benefit smallholder farmers if the pricing is not affordable due to significant level of capital expenditure based on the size of the irrigation.
Impact Risks
Irrigation systems may not be used proportionately while integrating with the conventional way of rainwater harvesting, it may result in exhausting available water resources.
Impact Classification
What
Renewable irrigation systems increase productivity of smallholder farmers while preserving extreme use of water and decreasing dependency on rainwater harvesting.
Risk
Smallholder farmers may fail to integrate modern solar irrigation technique with traditional farming.
Contribution
Agricultural productivity will be improved, which will lead do decreased food insecurity and dependency to the external factors.
Impact Thesis
Improve agricultural productivity significantly, benefitting smallholder farmers and increasing food security and economic development.
Enabling Environment
Policy Environment
Zanzibar Development Plan (ZADEP): Agriculture is one of the priority sectors for boosting economic diversification according to the ZADEP. Under interventions for agricultural production, policy document also prioritizes development of irrigation (9).
Zanzibar Vision 2050: The policy encourages sustainable irrigation system based on integrated development approach, community participation, genuine demand by farmers and sustainable use of natural resources and the environment (3).
Financial Environment
Financial incentives: The Government has a joint program worth of 112 million USD, funded by European Union on resource efficient and modern agriculture. The Government also has a planning stage project on mechanized agriculture, which is 14 Million USD (6).
Fiscal incentives: General incentives are exemption from payment of import duty, excise duty, VAT and similar taxes on capital good. Strategic investors have more comprehensive benefits which consists long-term exemption from duties and tax, resident permit for the investor and her family etc. (2)
Other incentives: 100% foreign ownership, 33 to 99 years of land lease agreement, employment of expatriates in key positions, 100% allowance for R&D activities (2).
Regulatory Environment
The Zanzibar Food Security and Nutrition Act: This Act governs all issues related to food availability, food accessability, food utilisation and food stability and the realisation of the right to adequate food (20).
Zanzibar Water Act, No 4, 2006: This act lays down the estrablishment of Zanzibar Water Authority, specifies its authorization area and powers (21).
Marketplace Participants
Private Sector
Davis & Shirtliff Group, LORENTZ Solar Water Pumps Company, Zanzibar SOLAR SHOP Kikwajuni, Umoja wa Wakulima wa Mbogamboga na Matunda (UWAWIMA).
Government
Ministry of Agriculture, Irrigation, Natural Resources, Livestock, Zanzibar State Trading corporation (ZSTC), Zanzibar Business and Property Registration Agency (BPRA), Zanzibar Investment Promotion Authority (ZIPA).
IFAD, World Bank, European Union.
Non-Profit
Japan International Cooperation Agency (JICA), The State University of Zanzibar (School of Agriculture), Tanzania Horticultural Association (TAHA), The Tanzania Growth Trust (TGT).
Zanzibar Agriculture Research Institute (ZARI), Small and Medium Industries Development Agency (SIMDA).
Target Locations
Zanzibar: Pemba
Zanzibar: Kaskazini
References
- (1) Office of the Chief Government Statistician. 2022. Zanzibar Statistical Abstract, 2021. https://www.ocgs.go.tz/php/ReportOCGS/ZANZIBAR%20STATISTICAL%20ABSTRACT%202021.pdf
- (2) Zanzibar Investment Promotion Authority. 2020. Zanzibar Investment Guide. http://www.zipa.go.tz/pdf/guide2020.pdf
- (3) Zanzibar Planning Commission. 2020. Zanzibar Development Vision 2050. http://planningznz.go.tz/doc/new/ZDV2050.pdf
- (4) Ministry of Finance and Planning Tanzania. 2021. Tanzania National Five Year Development Plan. https://www.effectivecooperation.org/system/files/2022-02/FYDP%20III%20English.pdf
- (5) Tanzania Ministry of Agriculture. 2017. Tanzania Agricultural Sector Development Strategy Phase Il. https://asdp.kilimo.go.tz/
- (6) Zanzibar Investment Promotion Authority. 2022. Zanzibar Investment Guide with Sector Profile.
- (7) Office of the Chief Government Statistician Ministry of Finance and Planning Zanzibar. 2020. 2019/20 Household Budget Survey. https://www.ocgs.go.tz/php/ReportOCGS/HBS%20Main%20Report_final%2031.12.2020%20printing%20(2).pdf
- (8) Revolutionary Government of Zanzibar. 2007. Zanzibar Strategy for Growth and Poverty Reduction. https://www.unpei.org/files/sites/default/files/e_library_documents/tz-zanzibar-strategy-growth-poverty-reduction.pdf
- (9) Zanzibar Agricultural Transformation for Sustainable Development, 2010-2020. 2009. https://www.gafspfund.org/sites/default/files/inline-files/ATI.pdf.
- (10) Revolutionary Government of Zanzibar. 2008. Zanzibar Food Security and Nutrition Policy.
- (11) Ministry of Trade and Industrial Development. 2020. MSME Policy.
- (11) Foreign, Commonwealth & Development Office, of the United Kingdom, 2019. Tanzania Market Snapshot, Horticulture Value Chains and Potential for Solar Pump Technology
- (12) CRM Land Consult Limited. 2019. Micheweni Free Economic Zone Master Plan 2019-2039, Interim Report.
- (13) RGoZ. 2003. Agriculture Sector Policy.
- (14) RGoZ. 2018. Zanzibar Agriculture Sector Development Program (ZASDP)
- (15) RGoZ, Global Climate Adaptation Partnership. 2012. Technical Report on Assessing the Benefits of a Lower Carbon Development Pathway for Zanzibar. http://www.economics-of-cc-in-zanzibar.org/images/Zanzibar_LCD_Draft_Final_report_v2.pdf
- (16) United Nations. 2022. Sustainable Development Report 2022.
- (17) Zanzibar Planning Commission. 2020. Annual Sustainable Development Goals (SDGs) Implementation Report, 2019/2020 Zanzibar
- (18) USAID, 2020. Case Study Growth of Tanzania’s Horticulture Sector: Role of TAHA inn Reducing Food Loss
- (19) SmartSolar Tanzania. 2022. https://www.lorentz.de/en/references/africa/tanzania/841.
- (20) Revolutionary Government of Zanzibar. Zanzibar Food Security and Nutrition Act. http://zanzibarassembly.go.tz/document/the-zanzibar-food-security-and-nutrition-act-no-5/
- (21) Revolutionary Government of Zanzibar. 2006. Zanzibar Water Act. https://moez.go.tz/STI_Legal/act_4_zawa_2006.pdf
- (22) Davis and Shirtliff. 2023. Tanzania Branches. https://www.davisandshirtliff.com/tanzania-branches
- (23) Kikwajuni Zanzibar Solar Shop. 2022. https://www.facebook.com/12Kikwajuni/