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The research organization, the Rocky Mountain Institute (RMI), has released a new report showing how rural electrification efforts can unlock billions of dollars in new values in six small-farm or agricultural processing opportunities in Ethiopia.
According to the report, this can be accomplished when farmers switch to electricity from expensive alternatives like diesel.
In collaboration with the International Food Policy Research Institute (IFPRI); the Ethiopian Ministry of Water, Irrigation and Energy (MoWIE); and Agricultural Transformation Agency (ATA), RMI Capturing the dividend of productive use: valuing synergies between rural electrification and smallholder agriculture in Ethiopia The report describes the synergies between rural electrification and agricultural productivity, processing and business, and the value that can be derived from the close link between the two.
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Rural electrification
Ethiopia
By mapping value chains and key opportunities, this report demonstrates the economic case of a national program to promote the productive uses of electricity.
“There is a great opportunity for Ethiopia to capture an economic dividend and accelerate progress towards national development goals, capturing the benefits of electrification for small rural farmers,” said Francis Elisha, director of the Rocky Mountain Institute.
Amid ongoing global economic shocks caused by COVID-19, compounded by the growing threat of desert locust infestations, Ethiopia faces numerous threats to national food security, including disrupted trade and import channels, spikes in food prices. food, water supply risks, and compromised harvest delays or yields.
Ongoing efforts to transform the agricultural sector in Ethiopia, therefore, remain critical.
Rural electrification efforts.
RMI’s research explores the opportunity for mutually assured success between agricultural transformation and rural electrification efforts.
These solutions can be implemented in rural areas on and off the grid, thereby creating millions of dollars in new revenue for the utility, helping defray the costs of rural electrification, and reducing the need for subsidies for mini-grids.
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The report describes value flows for different actors in the productive use space:
- Small rural producers can use electricity to unlock or accelerate $ 4 billion worth of revenue from agricultural productivity and processing by 2025.
- Making the switch to electricity saves communities another $ 120 million in fuel costs while unlocking a $ 22 million annual revenue stream for the utility.
- Providing appliances for this market is a $ 380 million business opportunity for local manufacturers, importers, and distributors.
“In agriculture, electricity can generate higher agricultural income and productivity by enabling irrigation, cold storage, and post-harvest processing and management. Therefore, it is time for Ethiopia to invest in electrification farms, in addition to lighting residences, through electric motor pumps and storage facilities with innovative financing mechanisms such as pay-per-use and pay-per-storage options, “said Dawit Mekonnen, researcher at the International Food Policy Research Institute.
Working alongside electrification efforts, a national productive use program could offer enormous benefits and position Ethiopia as a leader in the sector, establishing a model that other countries will no doubt follow.
