IFC, a member of the World Bank Group, and the Agricultural bank of Egypt (ABE) today announced a partnership to help Egyptian farmers access financing to purchase solar irrigation systems, reducing their reliance on diesel-powered generators and boosting their productivity.
Through the partnership, IFC will help ABE build capacity and design new financial products to enable Egyptian farmers—most of whom lack direct access to grid electricity—to purchase and install solar irrigation pumps. Using solar power for water pumping could potentially save farmers an estimated 14 billion Egyptian pounds ($875 million) annually in diesel fuel costs, helping reduce greenhouse gas.
ABE serves 4 million farmers in Egypt and is one of the country’s largest banks. Sami Abdel Sadek, Deputy Chairman of the Agricultural Bank of Egypt, said,
“Expanding the use of solar energy technology among farmers is part of our strategy to support agricultural and rural development in Egypt. It will also contribute to the country’s 2030 strategy to encourage agricultural investments and rationalize the use of resources, including energy, in the sector.”
The partnership is part of IFC’s broader advisory work to strengthen Egypt’s clean technology sector and support entrepreneurship in the country.
Walid Labadi, IFC Country Manager for Egypt, Libya, and Yemen, said,
“Our partnership with ABE will help provide clean energy to farmers at an affordable cost, while helping reduce greenhouse gas emissions. Supporting the development of renewable energy and expanding access to finance are priorities for IFC in Egypt.”
Under the Cleantech Entrepreneurship and Market Development Project, IFC is helping select financial institutions build their capacity to offer financing facilities for off-grid photovoltaic (PV) systems in the agribusiness sector. The project is being implemented in partnership with the governments of Denmark, South Korea, and the Netherlands.
The UNEP estimates that every 10% increase in farm yield has led to a 7% decrease in poverty in Africa. Productive use leveraging solar energy, or ‘PULSE’ appliances can also help to cushion against shocks resulting from climate change and market-price fluctuations.
Enabling access to finance and increasing affordability will be key in ensuring productive use leveraging solar energy appliances reach those that need them most. Innovations such as pay-as-you-go (PAYG) financing for solar home systems (SHS) have played a major role in enabling solar lighting penetration owing to high adoption of mobile money in Africa.
According to the World Bank, over 25.5 million people today across sub-Saharan Africa meet their basic electricity needs through quality-verified off-grid solar sources.