Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.
This was the message from a coalition of global institutions working on energy, water and agriculture at this month's Africa Food Systems Forum in Kigali, Rwanda.
“Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.
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Despite millions of dollars in grants and technical help for African businesses to power farming and other food production activities with renewable energy, most efforts remain stuck at the early stages because they struggle to find the investors, markets and expertise they need to grow.
This was the message from a coalition of global institutions working on energy, water and agriculture at this month's Africa Food Systems Forum in Kigali, Rwanda.
“Energy, agriculture, water and nutrition actors rarely design solutions together,” the Agri-Energy Coalition said in a Call to Action on powering food systems with clean energy.
Using more renewables - especially solar power - to drive food systems would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income and resilience among farmers, food processors and other small enterprises, the coalition added.
In an interview with Climate Home News at the forum, Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA) - a body representing private-sector developers of small-scale, off-grid electricity systems across the continent - said its members are starting to recognise this interdependence and are increasingly considering businesses that combine energy with agricultural activities.
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This, Niyi-Afuye added, could lead to greater supply and use of clean power for key processes like irrigation, food processing and storage, creating new sources of revenue for both sectors.
CHN: Conversations at the Africa Food Systems Forum highlighted how organisations working in energy and agriculture often operate in silos. What has hampered their collaboration, and how has that affected Africa's economic development?
A: Most mini-grid companies in Africa were primarily incentivised to achieve connections. If you look at some ongoing projects, you see a cost-per-connection model [of revenue]. When a subsidy is tied to achieving a connection, regardless of whether it is a productive connection, you might not notice the problem until five years down the line, when you realise the cash flows are not what you projected.
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So now we're in a “come-to-Jesus moment” as an industry, where we're righting the wrongs and adjusting our business models to make sure companies do not go bust and there is some level of sustainability over the long term.
The saying is not wrong that we've been working in our own silos because we've focused on the smaller things instead of the helicopter view. There needs to be cross-pollination [between the energy and agriculture sectors] because, if we are thinking about industrialisation, energy is a key driver of industrialisation. We will not achieve that if we're not in the room and part of those conversations.
CHN: Productive use of energy is intended to ensure electricity access goes beyond lighting homes to improving livelihoods, creating jobs and powering equipment. But what happens when farmers cannot afford the equipment they need to do that? How can energy, agriculture and equipment players work together to make the transition more accessible?
A: That's why we're having conversations with companies set up to de-risk the agriculture sector. By leveraging that connection, we're able to aggregate potential energy needs and develop instruments that make equipment more affordable through bulk procurement.
We can have arrangements that make it easier for farmers and food producers to lease equipment and eventually own it over a period. There's no real pressure to recover the capital very quickly because you're looking at scale.
There is a whole lot across the agricultural value chain that needs energy, from farming and harvesting to food processing and value-addition. We need to understand the energy needs across the value chain and bring our members in to provide solutions.
Developers do not necessarily need to provide every productive-use solution themselves. They can partner with equipment suppliers, financiers, agribusinesses and other service providers to enable customers to use electricity productively. The objective is simple: do not just electrify communities; enable economic activity that uses that electricity.
CHN: When Africa’s industrialisation is discussed, you hear things like renewables cannot provide enough baseload, while some food processors are sceptical about switching to renewable energy because of these concerns about reliability. What is your response?
A: It's not a controversial statement to say that a typical baseload is usually from the grid, and it's usually from multiple sources including renewable energy. For large-scale operations, we can look at blending multiple sources of energy. But how do we solve the problem of a mid-sized farmer? We can solve it with a mini-grid using renewable energy.
Comment: Every country needs a model to help optimise its energy transition
If you go to a small farmer in a rural area, they don't care about what source of energy they're getting. They just want something that can help them get from A to B. If you look at the direct energy needs of farmers and food processors, I'm sure 90 percent of their consumption can be solved by renewable energy. Let's start with that problem first. Then, as they scale, they might need to ramp up, and we can start talking about a bigger baseload.
CHN: How much agricultural value is lost because farmers and food businesses lack reliable, affordable electricity?
A: If you look at, for example, the fact that we need to maybe plant tomatoes or strawberries in Jos before it gets to Lagos [Nigeria], which most likely is by road, I can assure you that a good chunk, if not stored properly, would be bad by then. So the fact that we do not have energy is in itself a lost opportunity to maximise the potential of the agriculture sector. So until we've solved the energy problem, we will not salvage waste - and for me that is a lost opportunity.
CHN: AGRA, an institution focused on scaling agricultural innovations to help smallholder farmers, estimates a massive shortfall between current investments in the continent's food systems and what is actually needed to build a resilient, profitable agricultural economy - to the tune of $180 billion per year. Can integrating energy into food systems help bridge that gap?
A: Yes - if energy can help unlock the potential to earn more money, investors will follow the money. Investments go where there is certainty, and until there is certainty around cash flow and revenue, investment will be limited.
My vision is to see more Power Purchase Agreements (PPAs) being signed between energy players and the agriculture sector. We can start by getting people into the room, understanding their pain points, crafting a framework and documentation that works for both parties, and then seeing deals happen.
This interview was shortened and edited for clarity.
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Facts Only
* Millions of dollars in grants and technical help exist for African businesses to power farming activities with renewable energy.
* A coalition of global institutions working on energy, water, and agriculture held the Africa Food Systems Forum in Kigali, Rwanda.
* The Agri-Energy Coalition stated that energy, agriculture, water, and nutrition actors rarely design solutions together.
* Using more renewables would reduce food losses, ensure year-round availability and affordability of healthy foods, and improve productivity, income, and resilience for farmers and processors.
* Olamide Niyi-Afuye, CEO of the Africa Minigrid Developers Association (AMDA), noted members are recognizing interdependence and considering businesses combining energy with agriculture.
* Mini-grid companies were primarily incentivized to achieve connections via a cost-per-connection model, which may not reflect true cash flows over time.
* There is a recognized need for cross-pollination between the energy and agriculture sectors for industrialization.
* Energy access can support key processes like irrigation, food processing, and storage, potentially creating new revenue sources.
* The shortfall in investments to build a resilient agricultural economy is estimated at $180 billion per year.
Executive Summary
Efforts to power African farming and food production with renewable energy are constrained by a lack of necessary investment, markets, and expertise, despite significant grant funding. A coalition of global institutions noted that actors in energy, agriculture, water, and nutrition rarely collaborate on solutions. The transition is hampered by upfront costs, fragmented markets, and limited financing for these projects.
The shift toward renewable energy, particularly solar power, offers the potential to reduce food losses, ensure year-round access to affordable, healthy food, and enhance productivity and resilience for farmers and processors. While some developers are starting to recognize this interdependence, internal conflicts exist regarding baseload reliability versus renewable energy adoption, especially concerning large-scale industrialization.
The discussion highlights a need for integrated solutions that address the entire agricultural value chain, not just energy access for communities. Experts advocate for mechanisms, such as Power Purchase Agreements and creating frameworks that de-risk the sector, to align energy investments with agricultural needs and ensure viable revenue streams for all stakeholders.
Full Take
The narrative reveals a systemic misalignment where energy infrastructure development operates largely outside the operational realities of the agricultural sector, leading to fragmented efforts and suboptimal outcomes. The core tension lies between technical deployment (electrifying communities) and economic viability (ensuring profitable, scalable systems). The observation that solutions are developed in silos—energy actors focusing on connections versus agriculture actors focusing on yield—is not merely an organizational inefficiency; it is a structural barrier to holistic industrialization.
The focus on "baseload" vs. decentralized solutions introduces a critical layer of tension: large-scale industry demands reliability, while the context of smallholder farming requires localized, accessible solutions. The suggested solution—using mini-grids and de-risking mechanisms like bulk procurement—suggests that overcoming this gap requires shifting from an energy-centric delivery model to a value-chain-centric investment approach. This implies that the 'certainty' required for investment is not just in renewable supply but in predictable revenue streams tied directly to agricultural output, suggesting that ownership and financial architecture are as crucial as physical infrastructure in achieving true resilience.
What assumptions underpin the current siloed approach? The structure suggests an assumption of independent optimization when, in reality, energy acts as a necessary precondition for agricultural potential. If investment follows certainty, then designing instruments that link energy deployment directly to value capture—such as Productive Use-of-Energy agreements—is a necessary step to bridge the gap between technical capability and economic agency for the producers on the ground. How can institutions design governance structures that mandate this cross-pollination rather than merely acknowledging its existence?