Edition 9

How climate innovations incubator is hatching agribusiness start-ups

By Murimi Gitari

Kenya Climate Innovation Center (KCIC) Ag CEO Ruth Ndegwa. Photo Credit: KCIC Consulting.

Kenya Climate Innovation Center (KCIC) Acting Chief Executive Officer Ruth Ndegwa speaks to PanAfrican Agriculture on how they are supporting small enterprises in development of climate-smart technologies.

Briefly introduce yourself and your position at Kenya Climate Innovation Center.

Currently I am the interim Chief Executive Officer for the Kenya Climate Innovation Center (KCIC). I have worked with KCIC for the last 6 years foreseeing the implementation of diverse programmes aimed at addressing climate mitigation and adaptation in Kenya. KCIC helps clean-technology entrepreneurs to commercialize and scale innovative locally relevant climate

solutions to address the effects of climate change. KCIC’s overall objective is to support green growth through strengthened domestic capacity and financing for the transfer, development, and deployment of innovative climate solutions.

KCIC also works to enhance the role of the private sector to create jobs and support the realization of sustainable development in Kenya. Our key services include access to finance, business advisory, access to information, access to facilities and creation of an enabling environment for the growth of SMEs in Kenya.

What encouraged you, as Absa Bank, to take more interest in the sector?

At Absa, our purpose is to bring possibilities to life for our customers and stakeholders. We accomplish this by linking people’s goals and aspirations to the financial and nonfinancial resources they require to achieve those goals.

It goes without saying that the agriculture sector needs, deserves and must have support.

It is imperative that we agree on the kind of investment needed and effective and efficient mechanisms for delivering this investment for the entire value chain to produce the results we desire for the Africa We Want as captured in Africa Agenda 2063.

The importance of the agricultural sector in Africa is underlined by the fact that it accounts for up to 80% of employment, 20% of total exports, and 40% of GDP.

Give us a brief background about KCIC.

KCIC was established in 2016, as a World Bank’s infoDev initiative, and was the first in a global network of CICs being launched by infoDev’s Climate Technology Program (CTP) to support the development and scale up of locally relevant climate technologies. It was initially set up as a project by a consortium of partners in September 2012 and was funded by UK AID and DANIDA through the World bank from September 2012 – May 2016.

GVEP International (now Energy 4 Impact), PwC, Strathmore University and KIRDI were the lead partners in a consortium contracted by infoDev to establish and operate the KCIC. KCIC was successfully registered as a company limited by guarantee in January 2015 and received a new round of funding from DANIDA to support its activities for the period June 2016 to Dec 2020.

What are the activities or types of innovations meant to address climate change?

There are various solutions to addressing climate change in a world that has been exposed to high emissions of greenhouse gases for decades. If adopted, can either address climate change through mitigation or adaptation.

Over the span of 10 years of operations and having incubated 2,126 SMEs, we have seen integration of new technologies in farming systems. Solar drying of produce, use of sensor-based irrigation systems to minimize water loss and increase efficiency in water management and introduction of solar energy to promote clean technology are just a few examples of how climate change can be addressed either through mitigation/adaptation. We have also seen a rise in innovations around commercial forestry and waste management. The focus for most entrepreneurs is to do business while cognizant of the environment and this is slowly addressing challenges posed by climate change.

How can youth and women get involved in building innovations meant to address climate change?

With the youth comprising 75 percent of the population in Kenya, there is need for the government and stakeholders to design pro youth programs which mainstream the youth in all the activities. We at KCIC, for example, have a programme named, the AgriBiz which seeks to support women and youth-led agribusinesses to create jobs. The youth can get involved by providing innovative solutions in thematic areas of agriculture, renewable energy, water management, waste management and commercial forestry to address climate change through mitigation or adaptation. The ideas have been tested through competitions like Climate Launch Pad (CLP) held every year, Clean-tech Innovation and the ongoing Green Innovation Challenge.

We have seen youth set up ventures to address post-harvest losses through techniques such as drying of produce which not only increase shelf-life but add value to the products hence addressing climate change through adaptation. Other ventures include production of briquette, which emits less C02 compared to charcoal and has encouraged consumers to use less charcoal due to the less respiratory health risks and are mitigating climate change.

What are some of the most important innovations for climate action under your programmes?

They are quite a number. We have clients with solar dryers, solar waterpumps, smart water meters, solar powered coolers, dried fruits and vegetables, dried herbs, production of bio alkagel as an alternative source of fuel, fortified flours from maize, cassava, sweet potatoes, herbal teas from Moringa, Hibiscus, snacks from indigenous crops such as millet, sorghum, and Amaranth. Visit our website https://www.kenyacic.org/ videos/ under the videos tab for more information.

Considering the differences in developed and developing countries, are there lowhanging fruits for climate technology deployment in developing countries?

Yes, though there is still a lot of work to be done. For instance, implementation of quality infrastructure is critical in climate mitigation and adaptation. This cannot be done without the help of the national and county government.

For instance, solar powered irrigation farms in rural areas, like those in the Netherlands, can be championed by the Ministry of Agriculture and the Ministry of Energy. Agricultural infrastructure like boreholes, dams and tube wells, irrigation systems and erosion, land reclamation like in Israel, flood protection increase a crop’s resilience to extreme weather and play a big role in adaptation and resilience to climate change.

What are the affordable technologies that every citizen and especially farmers can adopt and put into practice?

Some of the affordable technologies include use of briquettes, value addition to produce either through milling or drying to produce flour with high nutritional content, use of organic manure in farming and practicing regenerative agricultural techniques. The productive use of energy like solar pumps to boost water supply and access in the rural communities as well promotes food production.

Are there structures KCIC has put in place to create awareness and educate farmers on how to reduce CO2 emissions from their agriculture/livestock production?

KCIC publishes e-alerts and sends knowledge products to clients which are meant to create awareness on best practices in farming including the reduction of C02 emissions. We build the capacity of our entrepreneurs on relevant technical skills to ensure that they can better understand the needs of farmers they work with.

What are the statistics and uptake of the farmers, farmers groups and maybe cooperatives, if any that you have managed to support so far and how do you measure the impact?

We have supported 321 Community Based Organizations and Self-help groups. Impact is measured through revenue created, direct jobs created for male and females, societal impact of the venture to the community is also measured. We have seen these entities also increase household income for their members and improve the skills for women leaders to better govern/ make decisions in these entities

How do you identify individuals or the groups to benefit from the programmes?

Individuals and groups are boarded on a cohort basis. First, a call for application is sent out and potential entrepreneurs fill an online form. Based on predetermined program objectives, applications are evaluated by business analysts for shortlisting. KCIC has a robust criterion which is used to vet the quality of clients to be admitted. We briefly look at the ability of the business idea/model to be replicated, past experience in implementing the idea/business, ability of the business to create jobs especially for women and youth and the socio-economic impact of the business. Selected applicants are subjected to a due diligence exercise before actual boarding.

Do you plan to expand the programmes beyond the counties they are currently operating?

Yes, this is something we are heavily considering. Our experience in the sector has opened doors to work with like minded partners across the globe. We foresee a future where KCIC will be instrumental in replicating our model across Africa. We already have supported Rwanda and Nigeria to set up initiatives like KCIC.

Tell us about the AgriBiz Incubation programme.

The AgriBiz programme was tailored to support women and youth led agribusinesses to scale up hence creating jobs for women and youth across the 47 counties. Currently we have set up 8 incubation hubs in Kisii, Kilifi, Bungoma, Isiolo, Meru, Kiambu, Machakos and Uasin Gishu. All these hubs serve neighbouring counties to identify and support early stage companies, self help groups/ community based organizations within different agricultural value chains to commercialize.

We are offering business advisory services (mentoring, investor readiness, training, technical assistance), access to finance (debt and grants), access to facilities and creation of enabling environment through policy and legislation of agribusiness related laws at the counties. The programme aims to support 2,400 entrepreneurs and create over 20,000 direct and indirect jobs. We also aim at supporting the counties to identify and create a conducive legislative environment for the growth of the Agribusiness sector.

Many small businesses, including agribusiness, tend to collapse shortly after being founded. How do you ensure the enterprises supported under your programmes are sustainable?

In Kenya, only about 30 percent of early-stage entrepreneurs celebrate their third birthday. Factors attributed to the high failure rate include business management, structure, market opportunities, and motivation that our programs facilitate. Essentially, our programs are underpinned on the overall model of business incubation and acceleration. The programmes are meant to increase skills of the entrepreneurs, provide requisite structures for business growth, and enhance partnership with stakeholders for these entrepreneurs to leverage on. Our innovative products i.e., earlystage financing is meant to provide patent capital to the entrepreneurs to support them access to cheap credit required for the growth.

Several barriers to climate innovations exist. As KCIC have you encountered these barriers and how are you addressing them? Are there policy or regulatory frameworks that have been put in place?

The key challenge has been in advocating for the adoption of policies and frameworks which support the growth of SMEs. Policy work takes time, and it requires government goodwill for the proposed strategies to be implemented. Another challenge is around government bureaucracy among key institutions mandated to oversee the certification of products/ businesses. It takes a lot of time for some of these SMEs to launch products into the market due to lack of certification/ authorisation by the government. This has constrained the growth of businesses.

What are the achievements you have made so far since the programmes started and what’s remaining?

In the last ten years, we have mobilized USD 48,000,000 that has enabled us to incubate and support 2,126 SMEs in agribusiness, renewable energy, commercial forestry, water and waste management. Consequently, we have led to the creation of 24,990 jobs, and resulted in USD 32,000,000 revenue creation. In terms of our overall environmental impact, we contributed to the mitigation of 300,00 tons of carbon dioxide. Most inspiring still, we have indirectly impacted 780,540 people through our activities.

Who funds the programmes and are there any other partners involved? If any, what are their roles?

To kickstart our operations, we were first funded by the World Bank through the Department for International Development (DFID) and by the Danish International Development Agency (Danida). The two donors have remained focal to our operations with additional others including the European Union, IKEA foundation, Lemelson foundation, UNPD and Autodesk foundation.

You were recently appointed as the Ag CEO. What are your plans and targets and what legacy would you like to leave behind after the lapse of your tenure?

SMEs will be crucial enablers of the realization of Vision 2030 by contributing to the achievement of social-economic objectives of job creation, increased productivity, and enhanced entrepreneurship. Premised on this understanding, my plans are to refine our business development processes by targeting to enhance the efficiency of our systems. I would like to leave behind a legacy where the organization has doubled the entrepreneurs it supports and tripled the revenue generation among the entrepreneurs.

Your parting shot…..

My belief is that, in responding to the adversaries of climate change, locally developed innovations are more suited for the mitigation and adaptation efforts in developing countries. Business Incubation centres like KCIC, remain an integral element of this puzzle.

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