PAMIGA: Finance for micro-irrigation and home solar kits
Countries: Burkina Faso, Mali, Senegal, Togo
Sector: Agriculture, off-grid power, financial services
Challenge: Access to electricity, financial services and clean drinking water are all major challenges facing Sub-Saharan Africa. Many poor farmers operate with little equipment and can only water their crops when it rains. This means that fields stay dry and uncultivated most of the year, severely limiting output and earnings potential.
Solution: Microfinance institutions can play an important role in financing and distributing small, affordable solutions for energy and water in Africa. In 2014, OPIC partnered with the French microfinance network PAMIGA S.A. on an innovative project to provide small loans to African farmers to support the purchase of home solar kits and micro-irrigation systems to improve their productivity.
PAMIGA is the first recipient of financing through OPIC’s new Portfolio for Impact (PI) program, which OPIC designed to provide financing to smaller impact investing projects that offer significant potential for positive social impact but may face challenges obtaining financing because they are small or early stage. PAMIGA also received support through the Africa Clean Energy Finance Initiative or ACEF, a program of OPIC, the U.S. Trade and Development Agency and the U.S. Department of State, to provide early stage support to promising projects. The ACEF support helped PAMIGA offset certain project preparation costs.
Impact: A pilot micro-loan program started in 2011 by PAMIGA showed that by giving farmers the tools necessary to properly irrigate their crops, such as a basic ground piping system, they could use water more efficiently and continue to grow during the dry season.
This not only increased the total volume of food they could produce but enabled them to sell their food at much higher prices, as much as five times the rate they would get during the rainy season when onions, tomatoes and other regional crops flood the local market. The micro-irrigation systems also help farmers expand their fields, further increasing productivity.
Solar home kits, also supported by the program, are well suited for Africa, where a large share of the population lives in rural areas that are off the grid. These kits can displace the use of kerosene lamps for lighting, which are unsafe, unhealthy and rely on an expensive fossil fuel.
The loan facility is expected to finance about 92,000 microloans.
This project was profiled in 2015