Dear SunCulture Supporters,

One month ago, we closed a round of funding with EDF, one of the world’s largest electric utility companies and a global leader in low-carbon energy (press release). This exciting deal demonstrates that major power players view the off-grid sector as a future cornerstone of their business. In the African context, investing in off-grid means investing in farmers. For SunCulture, a Kenya-based technology company that sells agricultural products and services, this partnership marks a commitment to our customers - smallholder farmers.

Water, energy, and food are the essential resources that sustain life and drive global, regional, and national economies. Coined the Water-Energy-Food Nexus at the 2011 Bonn Conference, the intersection of these sectors has become a popular topic of conversation among government, policy makers, and investors alike. Working at this Nexus means addressing two very important global challenges: (1) how to increase the incomes of the largest group of people living in poverty (smallholder farmers), and (2) how to feed the world.

At SunCulture, we call the practice of working in this Nexus increasing productivity. Whether that’s making more money, saving time, or being able to do more work, everything we do is focused on increasing household productivity. Because we’re one of a handful of companies in the world with years of data and experience operating in this Productivity Nexus, we’re often asked to help people make sense of it all. I’ve decided to dedicate this year’s letter to sharing the principles that have helped us build a business around the Productivity Nexus.

First, in order to understand what the Productivity Nexus is and how it addresses these global challenges, it’s important to understand who it affects the most. I’m going to tell you about Anne, one of our off-grid customers who lives with her husband and two sons on a one-acre farm in Matanya, Kenya.

Anne is representative of the 570 million smallholder farming households around the world - her main sources of income are selling milk from the family’s one skinny cow and selling maize from their farm. Because milk is mostly water, cows producing milk need to drink constantly. So Anne manually hauls water up from what she calls a “shallow”, hand-dug well that reaches 25 meters (82 feet) deep. Every morning, she lowers a bucket down, fills it up, and uses a handmade pulley to lift twenty liters of water up to the surface. Twenty liters of water weighs 20 kilograms (44 pounds) - as heavy as one those big weight plates at the gym. Doing this work is difficult - I know because I tried it myself when I visited Anne’s farm.

The weight means that Anne can only pull the bucket up ten times per day. She uses four buckets for domestic chores (cooking, cleaning, bathing) and gives the remaining six buckets to her cow. Right now, her cow can only produce four litres of milk per day because six buckets of drinking water isn’t enough for full milk production. Anne is selling the milk for $0.30/liter, which comes to a total of only $438 per year. She makes an additional $200 per year selling her maize, which also requires water. But since Anne isn’t able to pull up enough water, she practices rain-fed agriculture, leaving her just one drought away from losing that source of income.

I visited Anne on the day she bought SunCulture’s flagship product, RainMaker - an affordable, internet-connected solar irrigation solution designed for smallholder farmers. RainMaker is a low-carbon alternative to motor-driven petrol pumps or manually operated pumps. It uses solar power to pump water from up to 100 meters (328 feet), and has a battery backup for cloudy days. The entire setup sells for $500, which Anne was able to afford thanks to our Pay-As-You-Grow consumer financing program, which allows farmers to pay for our solutions in instalments over time. As Anne turned the system on and water began shooting to the surface, I saw her face light up with excitement as her mind started racing with plans of how to make more money.

Anne said she plans to sell double the amount of milk because her cows were going to produce at least eight liters of milk per day (bringing in an additional $438/year). She will double her maize yields (an additional $200/year) and grow higher value crops (cabbages and kale) to sell at her local market (an additional $1500-$2500/year). And she will save more than 17 hours per week usually spent physically moving water.

With that additional income, Anne wants to expand her house so her relatives can visit without cramming into one room to sleep. I joked with Anne and told her that her muscles were going to get smaller now that she doesn't have to manually draw water. She laughed and said, “That’s OK because I’m going to be fat!”