Aptech Africa: Pay-n-Pump brings affordable solar-powered irrigation within reach for small-scale African farmers
Uganda-based company Aptech Africa’s ‘Pay-n-Pump’ is a solar PV-powered pump that offers an affordable irrigation solution to low-income subsistence farmers hitherto unable to afford high-cost solar systems, potentially increasing their yields and avoiding the fuel costs of diesel-based pumps. The mobile pay-as-you-go (PAYGo) technology offers farmers the choice between two payment options for the pump systems:
- Use the pump as a pre-paid service with a fee per litre that includes lifetime maintenance and irrigation training
- Purchase the pump on a lease-to-own basis with an affordable deposit and monthly instalments
Energy Catalyst supported Aptech Africa to launch a pilot in Uganda to demonstrate the relevance of their solution to local people and market conditions. During these field trials, the Pay-n-Pump solution received a receptive and encouraging response from farmers, community groups and other key stakeholders, including Action Against Hunger and the UN’s Food and Agriculture Organisation (FAO). Aptech Africa also used the funding to recruit regional representatives that could help educate and raise awareness of solar-powered irrigation amongst small-scale Ugandan farmers, often living in remote areas. Despite periodic COVID-19 restrictions, the education sessions collectively reached almost 1,000 people by July 2021.
We fully believe that this solar product has the potential to transform productivity on smallholder farms across sub-Saharan Africa.
Aptech Africa’s founder, Ghirmay Abraham
The challenge
Climate change means Uganda is facing an increasing number of periods of prolonged drought and unreliable rainfall. Such changes are leading to a drop in productivity and income for farmers largely reliant on time- and labour-intensive manual irrigation methods. The surest way for farmers to combat these threats to their livelihoods is to boost farm yields by investing in modern pressurised irrigation equipment, but their diminishing income from traditional farming methods leave them unable to raise the capital.
Smallholder farmers have long been an underserved market for irrigation equipment. Many irrigation systems on the market collect money through a monthly tariff system, but these farmers often find their fluctuating liquidity prohibits regular fixed payments. Other available PAYGo options are typically available for larger and more costly pumps that are unaffordable to these farmers. Unable to access affordable irrigation solutions that are suited to their needs, smallholders farmers remain trapped in a cycle of low yields and low income.
The innovation
Generally speaking, solar-powered irrigation is a boon for farmers in Africa: not only does it significantly enhance productivity and food security, it also insulates them from the fluctuating cost of diesel. When replacing a diesel pump, the savings from not paying for fuel means the solar-powered system typically pays for itself in 8-24 months. The environmental benefits of the solar pumps are also evident: for each diesel pump that is replaced with a solar powered pump, CO2 emissions are reduced by 44kg per year.
Aptech’s value proposition of putting a PAYGo system on a smaller-scale pump finally extends these benefits to smallholder farmers. The innovation within the Aptech Africa business model derives from offering a lower price along with flexible and convenient payment options to this overlooked rural market – including payment in instalments over 24 months or potentially on a ‘pay-as-you-go’ basis. “Affordability is critical to reaching this nascent market. By designing a way to deliver renewable energy at a price-point that makes sense for smallholder farmers, we hope we can give a real boost to under-served agricultural communities,” says Aptech Africa’s Financial Director, Stefan Meier.
Aptech Africa commissioned their research and development partner Innovex to create a prototype PAYGo software that enables the user to make digital payments for the pumps (but also allows the provider to remotely lock the system in case of non-payment). The integration of such software into this class of small-scale pumps had never been previously attempted and brings solar-powered irrigation technology into reach for low-income subsistence farmers for the first time. Energy Catalyst support enabled the installation 10 units on farms as a demonstration of the solution: after the first harvest, farmers reported an increased yield of 25-50%. Based on this initial success, Aptech Africa is now looking to extend the scope of the project to 40 units by the end of 2021. These farmers will benefit from modern irrigation techniques that produce higher yields, access to extended growth seasons and diversified sources of income through water sales and a greater number of saleable crops. Alongside the product itself, Aptech Africa offers maintenance and training as an integral part of their full-service package.
The opportunity
Funding from Energy Catalyst is helping Aptech Africa demonstrate their solution with real farmers to ensure the product is ready for wider adoption.
It has also supported the company in laying the groundwork for market validation by garnering feedback on the factors inhibiting uptake of solar irrigation: Aptech Africa canvassed a range of potential stakeholders, including NGOs, community-based organisations, farmer groups, agriculture-based organisations, and Savings & Credit Cooperative Societies. This initial market outreach helped Aptech Africa to finetune the business model that will enable the greatest number of small-scale farmers to access the product.
Whilst still in the early stages of development, Aptech Africa believe they have a sustainable and commercial business model for the Pay-n-Pump system. By the end of 2021 they will have sufficient data in place to decisively validate their model and Aptech Africa will begin the next phase of their journey by searching for investors. The team envisage that the international scope of their company and pre-existing expertise within procurement will prove appealing when it comes to raising capital. As an engineering procurement construction company with offices registered across sub-Saharan Africa, Aptech Africa have the skills and expertise necessary to scale up the Pay-n-Pump project regionally, enabling more marginalised farmers to benefit from better yields, greater food security and higher profits.