Difference between revisions of "SPIS Toolbox - Credit Policy: Analyze Potential"
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| − | === '''<span style="color:#879637;"> | + | === '''<span style="color:#879637;">2. Credit Policy: Analyze Potential</span>''' === |
Today, solar-powered irrigation is a technically mature and reliable option and an alternative to conventional irrigation approaches. When analyzing options for the development of credit policies for SPIS, the following aspects should be considered: <br/> | Today, solar-powered irrigation is a technically mature and reliable option and an alternative to conventional irrigation approaches. When analyzing options for the development of credit policies for SPIS, the following aspects should be considered: <br/> | ||
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*grant schemes or subsidies are available to borrowers (producer); | *grant schemes or subsidies are available to borrowers (producer); | ||
*producers aim at specialized markets using environmental friendly technology (focusing on ecological production, which could give scope for premium pricing); | *producers aim at specialized markets using environmental friendly technology (focusing on ecological production, which could give scope for premium pricing); | ||
| − | *technology distributors and system integrators available in the region; | + | *technology distributors and system integrators are available in the region; |
*water is available and managed adequately so as to prevent groundwater depletion in the long run. | *water is available and managed adequately so as to prevent groundwater depletion in the long run. | ||
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*a comparatively high initial capital investment requirement; | *a comparatively high initial capital investment requirement; | ||
| − | *longer repayment periods or/and significantly higher repayment rates; | + | *longer repayment periods or/and significantly higher repayment rates in case of single user; for a community based model, the payback period is reduced; |
*higher credit risk. | *higher credit risk. | ||
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==== '''<span style="color:#879637;">Data Requirements</span>''' ==== | ==== '''<span style="color:#879637;">Data Requirements</span>''' ==== | ||
| − | *Profile end customers (cropping patterns, irrigation techniques, pumping systems, market); | + | *Profile of end customers (cropping patterns, irrigation techniques, pumping systems, other available pumping alternatives, market); |
| − | *Current | + | *Current loan products available for potential SPIS customer; |
*Water and energy provision regime in region; | *Water and energy provision regime in region; | ||
*Support/advice structures and subsidy schemes (refinancing) available for the region; | *Support/advice structures and subsidy schemes (refinancing) available for the region; | ||
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*Market analysts/consultants; | *Market analysts/consultants; | ||
*Research and training institutions; | *Research and training institutions; | ||
| − | *Public entities promoting or | + | *Public entities promoting and/or subsidizing SPIS initiatives; |
*Donors refinancing solar-powered initiatives; | *Donors refinancing solar-powered initiatives; | ||
*Associations of producers / potential borrowers; | *Associations of producers / potential borrowers; | ||
| − | *Technology | + | *Technology and service providers. |
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==== '''<span style="color:#879637;">Important Issues</span>''' ==== | ==== '''<span style="color:#879637;">Important Issues</span>''' ==== | ||
*Solar-powered irrigation technology is mature, reliable and systems costs have decreased. | *Solar-powered irrigation technology is mature, reliable and systems costs have decreased. | ||
| − | *SPIS generally require higher investment | + | *SPIS generally require higher investment than other irrigation systems, but operational costs are lower. |
{{SPIS Reference}} | {{SPIS Reference}} | ||
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| + | {| cellpadding="1" | ||
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| + | | {{Back to SPIS Toolbox 2}} | ||
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| + | | {{Back to Finance}} | ||
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| + | | {{Next Chapter}}[[SPIS_Toolbox_-_Credit_Policy:_Risk_Analysis|►Go to the Next Chapter]]</span></span> | ||
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Latest revision as of 19:30, 21 July 2020
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2. Credit Policy: Analyze Potential
Today, solar-powered irrigation is a technically mature and reliable option and an alternative to conventional irrigation approaches. When analyzing options for the development of credit policies for SPIS, the following aspects should be considered:
SPIS is likely to be a feasible option in a region if:
- energy provision for farming is a constraint (availability or cost of fuel, reliability of grid connection);
- an intensification of agricultural production is envisaged;
- producers are market-oriented and not working on subsistence level;
- producers are at least medium sized or organized in small holder groups;
- subsidized refinancing options for financial operators are available;
- grant schemes or subsidies are available to borrowers (producer);
- producers aim at specialized markets using environmental friendly technology (focusing on ecological production, which could give scope for premium pricing);
- technology distributors and system integrators are available in the region;
- water is available and managed adequately so as to prevent groundwater depletion in the long run.
However, compared to conventional pumping and irrigation methods, PV-based pumping solutions have:
- a comparatively high initial capital investment requirement;
- longer repayment periods or/and significantly higher repayment rates in case of single user; for a community based model, the payback period is reduced;
- higher credit risk.
Outcome/Product
- Study on potential of financing SPIS and recommendations for financial service provider.
Data Requirements
- Profile of end customers (cropping patterns, irrigation techniques, pumping systems, other available pumping alternatives, market);
- Current loan products available for potential SPIS customer;
- Water and energy provision regime in region;
- Support/advice structures and subsidy schemes (refinancing) available for the region;
- Environmental impact assessment (long term perspective).
People/Stakeholders
- Management of financial service providers;
- Market analysts/consultants;
- Research and training institutions;
- Public entities promoting and/or subsidizing SPIS initiatives;
- Donors refinancing solar-powered initiatives;
- Associations of producers / potential borrowers;
- Technology and service providers.
Important Issues
- Solar-powered irrigation technology is mature, reliable and systems costs have decreased.
- SPIS generally require higher investment than other irrigation systems, but operational costs are lower.
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