Lightency: Green Finance for Green Fields: Solar Energy, Water Pumps, and Microfinance in Agriculture
Inspiration
The genesis of our project lies in a critical observation: the alarming scarcity of green energy projects in Tunisia. Recent statistics paint a stark picture—despite the country's vast potential for renewable energy, particularly solar, less than 3% of its energy production is derived from renewable sources. This not only reflects a significant underutilization of sustainable resources but also highlights the pressing need for innovative solutions to bridge this gap.
Driven by the urgency to combat climate change and enhance energy security, we set out to challenge the status quo. Our ambition was to catalyze a shift towards more sustainable agricultural practices, starting with a fundamental operation: water pumping. Traditionally powered by diesel engines, the water pumping systems used by Tunisian farmers are not only environmentally unsustainable but also economically draining.
While our initial efforts are in collaboration with Enda Tamweel(https://www.endatamweel.tn/) a leading Microfinance organisation with more than 85% of marketshare in Tunisia microfianace sector, more than 2000 emplyees and more than 400M€ of yearly revenue and a recent partner of The Hashgraph association to adopt Hedera DL , the plan is to provide loans to farmers for transitioning to solar-powered systems, the core of our mission transcends individual partnerships. Together, we are introducing a new methodology that is designed to be universally applicable, offering a blueprint that any financial institution can adopt to promote green energy initiatives. By pioneering this approach, we aim to inspire a broader movement towards sustainability in Tunisia and beyond, transforming how financial mechanisms can be leveraged to foster environmental stewardship and economic resilience.
What it does
Our project introduces a groundbreaking approach that enables farmers to transition from diesel to solar-powered water pumping systems. By doing so, it addresses several key issues: reducing carbon emissions, cutting operational costs for farmers, and promoting the use of renewable energy sources. This initiative not only has the potential to revolutionize agricultural practices but also to pave the way for a more sustainable and eco-friendly farming ecosystem.
How we built it
We embarked on this project by conducting thorough research into the needs of the farming community and the technical requirements for implementing solar-powered systems. Understanding the importance of a secure, efficient, and transparent platform for our initiative, we chose to build our solution on Guardian by Hedera. This choice was motivated by Guardian's robust capabilities in ensuring data integrity, transparency, and seamless transactions—essential features for managing tokens , MRV data and tracking the adoption of solar-powered systems.
Collaborating closely with enda tamweel, we developed a financial model that would facilitate the provision of loans to farmers. This model was designed to be both sustainable and scalable, ensuring that it could be adapted to meet various needs and circumstances. The incorporation of Guardian by Hedera into our framework enabled us to leverage blockchain technology, enhancing the reliability and auditability of our methodology. The development process involved a blend of technical expertise, financial analysis, and a deep understanding of the agricultural sector, all while ensuring our solution was built on a foundation of cutting-edge technology.
Challenges we ran into
Technical Challenges: Understanding and utilizing Guardian posed a significant hurdle. We engaged in a productive discussion on GitHub, which, after a crucial technical update, helped us overcome these challenges. (https://github.com/hashgraph/guardian/discussions/3423, https://discord.com/channels/1126867600098476145/1204736844944637983/1210370515508793424). Additionally, several conversations on Discord provided invaluable assistance in resolving our issues, demonstrating the supportive nature of the community.
Business Challenges: Convincing Enda Tamweel to adopt this innovative solution was a complex process. It requires extensive training for their agents, considering blockchain and DLT technologies aren't typically user-friendly. However, we assured them of our commitment to simplify the user experience and provide comprehensive training, ultimately securing their agreement to move forward with our proposal.
Accomplishments that we're proud of
We are proud of our partnership with Enda Tamweel, a leader in the green loans market in Tunisia. Collaborating with Enda Tamweel represents a significant achievement for us, as they lead the way in financing sustainable energy projects. Our collaboration marks a substantial step forward in integrating our solutions with Guardian, showcasing our joint commitment to environmental sustainability.
As of December 2023, these are official number of Enda Tamweel's Green loans portfolio.
- Number of active loans: 1,464
- Active loans breakdown:
- Eco Shams (traditional solar pumping product): 247
- Eco Shams (new product variants): 10
- Eco Pret: 1,205
- Eco Taqua: 2
- Value of active portfolio: 9,946,990 TND (approximately $3,183,037 USD)
- Value breakdown by product:
- Eco Shams (traditional): 3,754,193 TND (approximately $1,201,342 USD)
- Eco Shams (new variants): 260,366 TND (approximately $83,317 USD)
- Eco Pret: 5,914,031 TND (approximately $1,892,490 USD)
- Eco Taqua: 18,400 TND (approximately $5,888 USD)
This partnership and the transition to more autonomous solutions on Guardian herald a significant step towards scaling sustainable energy initiatives. The integration with Guardian not only enhances our project's transparency and efficiency but also promises to introduce substantial transaction volume to the Hedera DLT. This alignment with Enda Tamweel not only signifies a milestone for us but also underscores the potential impact on Tunisia's green finance ecosystem.
What we learned
Throughout our journey, we've gained invaluable insights into the Hedera ecosystem, mastering the use of Guardian, developing on Hedera, and employing IPFS for our project needs. Our understanding of Hedera's sustainability initiatives and the diverse stakeholders involved has deepened, offering us a comprehensive view of its ecosystem's potential for facilitating sustainable solutions. This learning experience has been instrumental in shaping our project's direction and enhancing our technical capabilities.
What's next for Lightency
We're expanding our innovative approach both nationally and internationally, with a keen eye on compliance and introducing new, sustainable methodologies in collaboration with Enda Tamweel. These advancements are pivotal for Enda, aiming to secure $1.5 billion in funding by 2027. By leveraging environmental assets, we'll not only aid Enda in achieving their financial targets but also in securing more favorable borrowing rates and enhancing their Environmental, Social, and Governance (ESG) reporting. This strategic direction underscores our commitment to sustainability and economic viability.
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