REEEP assists €15M drip irrigation buy in India

Europe’s Renewable Energy and Energy Efficiency Partnership (REEEP) supplied the seed funding for a project that, in its initial implementation, has enabled 25,000 farmers in India to secure drip irrigation systems worth €15 million in the states of Maharashtra, Gujarat and Rajasthan.

The drip irrigation deal is part of a larger project with Yes Bank to develop a new credit practice to supply financing bundles for small-scale renewable energy and energy efficiency projects in rural and per-urban India. REEEP contributed €100,000 to kickstart the project.

Farmers typically use flood irrigation, which consumes large amounts of energy to pump water, much of which is wasted (see Cleantech panel: The days of cheap water are over).

Drip irrigation systems deliver water using a network of pipes that have a series of outlet points. Each point distributes a precisely controlled dose of water and nutrients directly into the root zone of the plant.

India's largest drip irrigation company, Jain Irrigation, supplied the drip irrigation systems that are expected to save up to 70 percent of the water when compared with flood irrigation techniques, as well as 10 kilowatt-hours of electricity per day per acre (see IFC pumps up water focus in India with $45M for Jain Irrigation).

Drip systems can provide a 30 percent efficiency improvement in the use of fertilizer, increasing overall yields up to 230 percent, according to REEEP (see China invests $23M in drip irrigation).

The systems range from €450 to €1,500 per acre, but farmers typically have problems securing the necessary loans, either because they are poor, or because the loans are too small to be worth the overhead costs. Yes Bank worked with Jain Irrigation to bundle the loans, with each averaging €594.

If the drip systems operate for 150 days a year, they save about 1,500 kWh of electricity per acre annually, REEEP said. Over the systems’ five-year lifespan, the loan from Yes Bank is expected to save about 480 million to 600 million kWh of energy.