By Mark Kawalya
The British International Investment (BII) and Shell Foundation have partnered to invest $2.6 million in SunCulture, a Kenya-based company that provides solar-powered irrigation systems to smallholder farmers. The partnership aims to increase farmland productivity in a sustainable way and contribute to the region’s goal of enhancing food security. According to the World Food Programme, food insecurity affects about 2.8 million people in Kenya, which is further exacerbated by the impacts of climate change, which is reducing productivity in the agricultural sector.
The partnership aims to design and finance a facility to enable SunCulture to harness the future value of carbon credits and lower the upfront cost of climate-smart irrigation products. This can deliver year-round and up to five times increased incomes for farmers due to longer and more frequent growing seasons, as well as an average time savings of 17 hours per week compared to collecting water for irrigation manually. Additionally, 92% of SunCulture farmers reported improved resilience to and recovery from climate shocks such as droughts.
SunCulture expects that the 25–40% reduction in the cost of solar irrigation pumps through carbon monetization will enable them to materially increase their addressable market, putting clean irrigation solutions in the hands of thousands more farmers in East Africa. The facility will be repaid with future sales of carbon credits, with BII bearing the risk of future carbon credit prices given the price volatility currently seen in voluntary carbon markets.
The ambition is to ensure that BII is a leader in climate finance, working with partners like the Shell Foundation to deliver innovative climate solutions as set out in the recently published Development White Paper. The investment is the first transaction under the strategic MOU between BII and Shell Foundation, with the two organizations working in partnership with the aim of providing up to $245 million in blended finance and co-investment products to remove the barriers associated with accessing finance for early to mid-stage businesses within the agri-energy and other decentralized renewable energy and related sectors.
Shell Foundation’s investment also includes co-funding from the UK’s Foreign, Commonwealth, and Development Office through its Catalysing Agriculture by Scaling Energy Ecosystems (CASEE) partnership, which supports solutions for smallholder farmers across Africa and South Asia. BII and Shell Foundation’s investment in SunCulture is aligned with the vision of the new Africa Green Industrialization Initiative (AGII), launched at COP28, to support the development of sustainable and resilient industries that can create jobs, reduce emissions, and enhance biodiversity.