Project

Project Reference Profiles – Uganda(UG3) Sustainable Energy-Water Solution for Med-Large Irrigation of Commercial Farming

At a Glance

Strategic Outcomes SO1, SO3
Start Date Q1  Mar 7 2018
End Date q1 March 31 2020
Funding Source Earmarked
Actual Budget (USD) 270,192
Budget Percentage 100%
Actual Expenditure (USD) 270,192
Status Active
GGGI Share (USD) 270,192
Poverty and Gender Policy Markers
Name of Client (Lead/Prime implementer if GGGI is part of a consortium)
Participating Organization (Funding/donor) Government of Hungary, Ministry of Innovation and Technology
Name of consortium members, if any

Project context, objectives and description

The development of the agriculture sector is among the Ugandan government’s prioritized areas, especially since it is the backbone of Uganda’s economy, accounting for almost 25% of GDP and employing approximately 70% of the Ugandan population. Meanwhile, the impact of climate change poses significant threats to Uganda’s development goals. The most critical climate changes in Uganda are increased/reduced precipitation and increasing temperature, and such changes are already bringing negative impacts to energy, water, and eventually to the agriculture sector. Moreover, only 15,000 hectares, which is less than 3% of the potential irrigable area of 566,466 hectares, has been developed under the formal irrigation system. 

Therefore, sustainable energy solutions for irrigation based on sustainable water management principles can provide Ugandan farmers with decentralized systems to access water and electricity for irrigation, and will greatly contribute to improved productivity and the profitability of Ugandan agriculture, as well as to improved climate resilience against the increasingly unexpectable rainfall pattern. Such interventions are further supported and guided by the National Irrigation Master Plan 2010-2035 that targets to invest in irrigation infrastructure and to boost commercial farming to transform the Ugandan society from a peasant to a modern and prosperous country. 

The project objective is to assess the feasibility of solar powered medium to large scale irrigation of commercial farming based on sustainable water management principles and to develop bankable project designs of commercial farming in Uganda.  

Type of services provided, and results achieved

Impact: Identification of the optimum irrigation scheme equipped with the most appropriate renewable energy technology for irrigation system based on sustainable water management principles as well as with market-based strategy to build or support commercial farms to maximize revenue generation potential either to domestic and export markets and contribute to the nation’s economic growth and job creation – which will also contribute to GGGI strategic outcome 1, 2, 3, 5, and 6. 

Outcome: 

  • The project has shown that solar-powered irrigation, in combination with other climate-smart interventions and/or solutions, can be a profitable business opportunity in Uganda. Solar-powered irrigation provides farmers with a technology that ensures the availability of water for irrigation during times of variable rainfall and provides a means for farmers to produce an additional crop or crops during the dry season. Furthermore, together with other climate-smart interventions, it can improve the quality and (stabilize) quantity of produce, manage water resources sustainably and reduce the inorganic input uses of farms. 
  • An additional outcome of the project has seen GGGI develop new partnerships with the Uganda Development Bank (UDB) and the Stanbic Bank. In those GGGI will be supporting pipeline development for both institutions, to develop bankable projects that drive more funding into green and sustainable projects in Uganda.  

Project Outputs completed by March 2020 

  • 12 farms have been identified and through a set of criteria around land ownership, project size, water and financial viability a shortlist of 6 projects was going through in-depth feasibility study including more social and environmental indicators as well.  
  • Two farms were selected for which teasers and business plans were developed, these business cases have been presented to over 20 financiers. The overall response from the financial institutions has been positive and conversations reached an advanced stage towards the end of the project. However, those coincided with the emergence of the COVID19 outbreak which has resulted in reduced volumes of exports from Uganda and thus the operations of both selected farms.  The circumstances have meant that site visits, as part of the financial institutions’ due diligence process, have been unable to happen. 
  • GGGI remains firmly committed to ensuring that both farms secure funding commitments from financial institutions and thus serve as successful, demonstrated projects which can provide a basis for similar in Uganda. GGGI will be committing its own resources to continue supporting these projects to secure funding so that the Government can focus on building on these as exemplars. 

i. Green Growth Policies:N/A

ii. Green Investments: 

Two projects are presented to investors with the aim of financial commitments after the COVID19 situation allows these projects to move forward: 

  • Business case one provides complete agricultural solutions to Ugandan farmers with a clear vision to lead in the support of agriculture systems, quality seeds and agrochemicals while focusing on general farming for export of fresh produce. This business is seeking debt of USD 2.0 M for the financing of solar irrigation kits for farmers and to build an end-to-end cold chain solution to further improve its hot pepper and chili value chain, both in terms of yields and quality. The scope of the project covers 100 hectares of land to be irrigated using solar-powered kits by approximately 100-200 farmers.  
  • Business case two has a modern production site in operation, they invest in sustainable cultivation solutions and is socially involved with its mission being to bring progress and development towards their clients, shareholders, employees and the community where it operates. The business is seeking debt of EUR 3.3M for stevia and moringa production and related processing units, it’s a 300 hectare potential project site. 

iii. Capacity Building and Knowledge Products:  

  • Total of 3 capacity building activities in the form of a meetings were held for GGGI to receive information from public and private sector players in Uganda and pre-feasibility study report. 

Number of staff provided

Project Manager:  Hyun S. Lee / Dagmar Zwebe 

Mark Gibson,   Sengozi David KyeyuneMariah Kizza, Ferruccio Santetti, Peter Vos  

Related

News • April 17, 2019

Validation meeting of the pre-feasibility study report under the sustainable energy-water solutions for medium to large scale irrigation of commercial farming in Uganda

On April 17, 2019, the GGGI Uganda office organized a validation meeting to present the pre-feasibility study report of the ongoing study under the sustainable energy-water solutions for medium to large scale irrigation of commercial farming in Uganda. The workshop was presided over by the Hon. Minister of State for Environment, Hon. Mary Goretti Kitutu, […]

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Funding Source
Actual Budget (USD) 1,118,000
Status Active
Thematic Area
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  • Sustainable Energy
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