Difference between revisions of "SPIS Toolbox - Credit Policy: Analyze Potential"

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{{Spis Invest}}
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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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{{SPIS Banner}}
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=== '''<span style="color:#879637;">2. Credit Policy: Analyze Potential</span>''' ===
 
 
=== '''<span style="color:#879637;">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;
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*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;
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*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.
  
=== '''<span style="color:#879637;">Outcome/Product</span>''' ===
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==== '''<span style="color:#879637;">Outcome/Product</span>''' ====
  
 
*Study on potential of financing SPIS and recommendations for financial service provider.
 
*Study on potential of financing SPIS and recommendations for financial service provider.
  
=== '''<span style="color:#879637;">Data Requirements</span>''' ===
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==== '''<span style="color:#879637;">Data Requirements</span>''' ====
  
*Profile end customers (cropping patterns, irrigation techniques, pumping systems, market);
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*Profile of end customers (cropping patterns, irrigation techniques, pumping systems, other available pumping alternatives, market);
*Current offer of loan products available for potential SPIS customer;
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*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;
 
*Environmental impact assessment (long term perspective).
 
*Environmental impact assessment (long term perspective).
  
=== '''<span style="color:#879637;">People/Stakeholders</span>''' ===
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==== '''<span style="color:#879637;">People/Stakeholders</span>''' ====
  
 
*Management of financial service providers;
 
*Management of financial service providers;
 
*Market analysts/consultants;
 
*Market analysts/consultants;
 
*Research and training institutions;
 
*Research and training institutions;
*Public entities promoting or/and subsidizing SPIS initiatives;
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*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 providers;
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*Technology and service providers.
*Service providers.
 
  
=== '''<span style="color:#879637;">Important Issues</span>''' ===
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==== '''<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 cost than other irrigation system, but operation costs are lower.
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*SPIS generally require higher investment than other irrigation systems, but operational costs are lower.
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{{SPIS Reference}}
  
{{SPIS Reference}}
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{| cellpadding="1"
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|-
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| {{Back to SPIS Toolbox 2}}
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|
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| {{Back to Finance}}
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|
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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

►Back to the Start Page ►Back to the Module Page ►Go to the Next Chapter

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.
►Back to the Start Page ►Back to the Module Page ►Go to the Next Chapter