ARE Member Inensus GmbH to increase the profitability of mini-grids in agricultural value chains through its joint venture Volt-Terra with grant funding from PREO
16 July 2021 – VOLT-TERRA seeks to increase profitability of mini-grids in agricultural value chains by applying the cutting-edge KeyMaker Model (KMM).
Responding to the aim of rural industrialisation, the KMM is based on Economies of Scope theory. It utilises the mini-grid electricity to establish a local agro-processing project, the revenues of which are an additional income stream for the mini-grid operator. The project also creates an end-market for the local farmers to sell their produce.
VOLT-TERRA Farm and Energy Solutions Ltd. (Volt-Terra) a joint venture between Gourmet Gardens (U) Ltd. and ARE Member INENSUS GmbH, will conduct research & development (R&D) on the productive use of mini-grids in Uganda. The project aims to provide cost-effective and reliable electricity to local communities, whilst simultaneously unlocking their economic potential in the process. To do so, VOLT-TERRA supports the production of vanilla and bird’s eye chillies and will become the supply-chain manager of these local products for export to value-added markets.
The proposed location of the pilot phase of the project is in the sub-county Bbaale in central Uganda, which has a population of about 17,000 people and where the primary source of economic activity is agriculture and forestry. Agriculture is a significant employment driver in Uganda (80% of the population lives in rural farming communities), but its employment potential is hindered by lack of access to energy. As a result, farmers are restricted in growing crops, and often suffer from price exploitation. Through the KMM, VOLT-TERRA is addressing these challenges by providing sustainable, reliable and affordable energy and agro-processing services to empower rural communities.
PREO funding will help VOLT-TERRA to achieve two key aspects of the R&D activities:
- The development of a pilot (60kWp) PV mini-grid that sells electricity to the community in support of farming activities. This will be the first application of the KMM in an agricultural value chain.
- Developing the agricultural product trade business model, which will entail capacity development for small-scale farmers and allow for the roll-out and operationalising of a block-farming model. Parcels of land will be made available to local farmers to cultivate vanilla and bird’s eye chillies.
VOLT-TERRA operates within various aspects of the vanilla and bird’s eye chilli value chains and will both support farmers to expand into the market and provide trade access through assisting farmers in implementing organic farming practices and obtaining certification. Furthermore, they will facilitate supply chain management to the benefit of local farmers and provide farming infrastructure and security equipment and services to prevent theft of crops. In proving the proposed business model, VOLT-TERRA will not only meet their core objective of removing barriers to electricity access, but will also be promoting small scale rural industrialisation in partnership with local communities.