Access to cold storage is critical for both health and nutrition in emerging markets. It can reduce food waste, provide economic opportunities for farmers and businesses, and lessen the burden of vulnerable people. While there are new technologies and business models for off-grid cooling solutions available, how can we ensure that the economically marginalized at the bottom of the pyramid have access to these solutions?
The annual EEP Africa Knowledge Week kicked off with Cooling Solutions: Interplay Between Business Models and Technologies in Sub-Saharan Africa. The session was moderated by Chiedza Mazaiwana, Portfolio Manager at EEP Africa, with speakers Chris Beland, Technical Programme Manager from Energy Saving Trust Fund, Christopher Emmott, Associate Director Investing in Energy Access at Acumen, Chianda Njogu, Manager for Demand, Jobs & Livelihoods at GEAPP, Denis Karema, Founder and CEO of SokoFresh, and Tracy Kimathi, CEO of Baridi.
The session opened with remarks from Chris Beland from Energy Saving Trust, who gave an overview of the cooling sector. He pointed out that the key challenge in the off-grid cold storage sector seems to be affordability, calling for a systems thinking approach where all the key stakeholders would work together towards improvement of the enabling environment. Key inputs required include not only access to patient capital for early-stage innovators but also improved policy support. Cooling, in his mind, can be thought of as the critical infrastructure for rural and urban poor to get out of poverty and to accelerate the economic growth.
After these opening remarks, all guests joined in a panel discussion on the trends in technology development and innovative business models to deliver cooling solutions in the market. Christopher Emmott, from Acumen, highlighted that cold chain solutions can have a major impact in tackling the challenges of people living in poverty. He mentioned three examples of this: small scale businesses who struggle with unreliable grid energy, large scale cold rooms and bulk chillers which do not only provide technology but are agriculture aggregators, and the broader cold chain value chain which needs a variety of companies to support the access to markets, transports and logistics. Cold storage also has a critical role in preventing food loss and food waste. Sub-Sahara Africa has huge room for innovation and opportunity for investment.
From an impact investor perspective, the challenge lies in making energy investments sustainable, said Chianda Njogu, representing GEAPP, who has been working on stimulating the productive use of renewable energy in underserved communities to create jobs and improve livelihoods. He points out that the focus should be not only on creating demand and jobs, but also on the viability of the business and aligning it to the surrounding ecosystem to allow the companies to thrive. He also highlighted the impact of food loss and food waste on the environment. In addition to providing food security, cold storage can also help to reduce emissions.
Chris Beland pointed out that another one of the key enablers in the off-grid solar powered cold storage sector is reducing the cost of solar panels and the lithium-ion batteries. The growth and development of thermal storage can reduce the overall costs of the units. Access to digital finance, such as integrating PAYGO systems into refrigerators and other units improves affordability. Integration of IoT monitoring helps to improve the performance of units and improves the overall customer experience within the off-grid cold storage space.
Tracy Kimathi presented the service offering of Baridi, a local, women-led company and successful EEP Africa grantee. Baridi provides solar powered refrigeration solutions for off-grid livestock and meat markets in East-Africa. For her, it has been important to develop their business model according to the trends in the sector, both in terms of the technology offering and also the market needs.
Denis Karema presented the service offering of SokoFresh, another successful EEP Africa grantee, a social enterprise that offers cold storage solutions and a market linkage to small and medium-scale farmers in Kenya. Their focus is primarily on fresh produce and smallholder farmers, where cold storage can help increase incomes as well as reduce post-harvest losses. When they were granted EEP Africa financing, the company had developed a business model for one value chain that needed to be tested across multiple value chains in Kenya. After they completed their project, the company ended up having two different business models for two different value chains.
For early-stage companies, bookkeeping and financial management can be challenging. It is also important to notice that access to cooling alone does not bring income, farmers also need access to markets. It is one thing to bring new pilot solutions to the market, but it is much harder to lay out a plan on how to scale and become a viable business. That is why early-stage support like EEP Africa is important, as it allows companies which are willing to scale and grow to attract follow-on financing.
Further reading:
Handbook for Governments and Development Partners | GOGLA
Productive Uses of Renewable Energy (PURE): Uganda Roadmap and Market Assessment | GOGLA
Productive Uses of Renewable Energy (PURE): Ethiopia Roadmap and Market Assessment | GOGLA
Powering Adaptation and Climate Justice: The Critical Role of Off-Grid Solar Technologies | GOGLA
Efficiency for Access R&D Fund Innovator Series
Walk in cold rooms: A practitioner’s technical guide
Cold chain market assessments in India, Kenya and Nigeria