Assessing The Potential Of Micro-Financed Solar Water Pumping To Enable Productive Use Of Energy In Rural Areas Of Burkina Faso: A Case Study Of Korsimoro Reservoir

Abstract

Climate change (CC) has become a universal threat which requires urgent action. In Burkina Faso (BF), prolonged drought, severe variability in rainfall and risk of desertification are the key CC impacts directly posing a big challenge to livelihood. Microfinance could play an important role in mitigation of and adaptation to CC by providing financial services which allow the poor to acquire climate resilient technologies. The population in BF are fast adopting irrigation as a way of adapting to negative impacts of CC. However, in spite of the huge solar photovoltaic potential, irrigation in BF is mainly based on fossil fuel pumps which accelerate CC. Therefore, this study aims at assessing the potential of microfinanced solar water pumping for productive use in the rural areas of BF with Korsimoro reservoir as a case study. Firstly, the main solar water pumping system (SWPS) market segments around Korsimoro reservoir were identified. It was found that there are three main SWPS market segments. Secondly, based on onion crop, for each of the three market segments, alternating current (AC) and direct current (DC) SWPS with water storage were sized, cost estimated and profitability analysis was conducted at 5.3% per year interest rate and 20 years system life span. It was found that water storage contributes enormously to the capital cost of the systems. Furthermore, the study revealed that using SWPS with water storage to completely replace diesel water pumps (DWP) is either not profitable or has long payback period (PBP) more than 15 years for all the market segment. Thirdly, for each market segment, between AC and DC SWPS, the system with higher internal rate of return was selected, water storage was replaced with DWP for pumping on cloudy days (periods) and further profitability analysis was conducted. It was found that replacing the water storage with DWP to be used on cloudy days and periods has positive net present value and PBP less than 11.5 years for all the market segments. Finally, the main loan features for SWPS were determined. It was found that the minimum interest charged by microfinance institutions in BF on agricultural equipment loans is 9.5% per year. At this interest rate, only SWPS for two market segments can be fully financed through microloan without exposing the farmers to risks due to long PBP more than 13 years.