Heifer International receives funding from PREO to support solarising dairy cooperatives in Uganda

The Powering Renewable Energy Opportunities (PREO) programme is delighted to announce it will be funding Heifer International, a development organisation working to end hunger and poverty around the world by providing livestock and advice to struggling families. PREO has awarded €141,000 to Heifer International to implement solar-powered rural milk chilling solutions at 5 producer organisations (dairy cooperatives) in Uganda, in order to demonstrate the benefits of the productive use of energy (PUE) for dairy cooperatives.

The dairy sector is one of the fastest growing agricultural sub-sectors in Africa and it has the potential to provide a regular source of income to millions of low-income rural households. Yet, the African continent contributes to less than 8% of the global milk output and to just 0.2% of the global trade in dairy products (according to FAO statistics from 2020). Despite a sizable cattle population, many African countries rely on dairy imports to satisfy domestic needs. While challenges such as poor herd management, sub-standard feed availability and the small-scale of operations contribute to poor productivity, the lack of rural chilling infrastructure, resulting in high post-harvest losses (of as high as 40%), is seen as the main barrier to sectoral growth.

With PREO funding, Heifer International’s project – Solar for Sustainable Income in Dairy (SSID), will bring together solar companies, impact investors, capacity builders, project financiers, and dairy cooperatives and processors to demonstrate the impact of the productive use energy (PUE) in the dairy sector by introducing solar-powered milk chilling at 5 dairy producer organisations in Uganda. The two-year project, which will be implemented in the Kiboga, Kyankwanzi and other districts of the central and southwestern Ugandan milk shed, is expected to increase both procured, bulked, chilled and sold milk. As such, it will help boost the incomes of the dairy farmers within the 5 cooperatives. The project’s targeted outcome is to increase the capacity utilisation of the dairy processor by making solar chilling technologies available and affordable for dairy cooperatives, thereby  reducing post-harvest losses in dairy value chains. The project is also expected to reduce the energy costs for dairy cooperatives by limiting the usage of diesel and embracing renewable energy, which will also result in a reduction in their carbon footprint.

This PREO-funded project will involve JESA dairy, one of Uganda’s largest premium dairy products producers. Project implementation will be led and managed by Heifer Project International, who have a proven track record of success in Uganda, having established more than 79 dairy cooperatives in the last 12 years. Shared Wealth Ventures, the impact capital arm of Heifer Project International, is the financing partner and will enable reliable chilling to the dairy cooperatives through innovative financing structures such as Power Purchase Agreement and asset leasing.

Heifer International – Solar for Sustainable Income in Dairy is the first Partnership Services project to receive PREO funding, to maximise its high-potential. The PREO funding is co-funded by the IKEA Foundation and UK Aid via the Transforming Energy Access platform. The Partnership Services initiative aims to build, fund and support three corporate organisations for the purpose of developing mutually beneficial partnerships in their sub-Saharan African value chains. Their productive use of energy will bring with is social and economic benefits such as improved earnings potential, job creation, empowerment of female rural workers, localisation of value-chains as well as more profitable and reliable supply chains for these corporate actors. PREO has allocated a total of €580,000 for funding Partnership Services projects, anticipating funding approximately three projects to the value of €190,000 each.

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