Efficiency for Access (EforA) is a global coalition working to promote highperforming appliances that contribute to clean energy access for the world’s poorest people; its members have programmes and initiatives spanning 62 countries and 34 key technologies. This report seeks to provide EforA stakeholders with an understanding of the role and potential of the cold chain in enhancing food security, unlocking sustainability, and tackling climate change. It aims to generate awareness and provide information on the cold chain technologies applicable in Kenya across key market segments (fresh fruits & vegetables, dairy, meat, and fish). It also maps the existing ecosystem of cold chain solutions and provides recommendations on how to support the market development of this sector over the next ten years.
Here are the conclusions oft he studies for Kenya and Nigeria:
Kenya
Although use cases vary across value chains, overall, Cold Chain Infrastructure (CCI) in Kenya is underdeveloped in the agricultural sector, resulting in significant quantities of food lost yearly due to a lack of cold chain technology. The fruits and vegetables, dairy, meat, and fish value chains would benefit from expanded cold chain solutions at nearly every level. Still, factors such as high costs, a lack of financing, poor infrastructure, large informal markets, and low levels of customer awareness inhibit the uptake of CCI technologies among producers, distributors, aggregators, transporters, and retailers. In some cases, CCI assets such as milk chillers or cold boxes are not used at all outside urban centres, with various actors in the value chain preferring rudimentary, low-cost methods of cooling and preserving produce; in other cases, these assets have been acquired and installed, but are underutilised due to a few factors that make them unattractive or unviable.
This gap presents a tremendous opportunity for market innovation on the technical, financial and policy sides. CCI manufacturers and distributors must ensure that their products correspond to the needs and capacities of the first-mile market segment, particularly concerning the power sources they use and the payment models they adopt. Donors and financiers can help facilitate the purchase of CCI assets by providing more grants and patient capital to those looking to acquire them since high costs and long payback rates tend to discourage more traditional investors. Meanwhile, the government, recognising that CCI expansion corresponds to its long-term policy goals for agricultural production and food security, could drive down the price of these assets by reevaluating the tax regime. A more supportive and better-enforced regulatory framework would also improve the uptake of CCI solutions in Kenya.
In supporting innovations in cold chain technology, there should be a particular focus on products powered by renewable energy. Millions of smallholder farmers need access to the grid-quality electricity required to maintain low cold storage temperatures. So, off-grid solutions are often the only cold chain option at the production level. But conventional refrigeration technologies – including the refrigerants they use – are also a significant source of greenhouse gases; a shift towards more renewable energy sources would solve the problem of climate-related negative externalities while simultaneously tackling the challenges of rural poverty and food security.
The level of agricultural production in Kenya is considerable, and proper preservation techniques would mean that a much higher proportion of domestically produced food would reach the Kenyan population. Reducing food losses would also boost the incomes of smallholder farmers and small-scale distributors, creating jobs and improving food security for rural people. However, solving this problem requires more than the proper technology; a system-wide approach combining education, financing, and policy changes is needed to fully realise the cold chain market’s potential and for Kenyans to reap its benefits eventually.
Excerpt of: Assessment of the Cold Chain Market in Kenya (Efficiency for Access 2023)
Nigeria
Cold Chain Infrastructure (CCI) in Nigeria is still nascent, and the value chains that require it are underdeveloped and largely informal. Existing CCI is concentrated in the fish value chain and used almost exclusively for imports. However, there is immense potential for CCI market growth in the FFV and dairy value chains and locally produced fish.
The CCI used at processing, import and export facilities mainly consists of on-grid technologies supported by fossil fuel-based generators that supplement the country’s weak electricity grid. This impacts Nigeria’s GHG emissions. However, in the FFV value chain, a few CCI solutions are emerging powered by renewable energy (primarily solar). These technologies are often paired with innovative business models like CaaS, thus addressing the affordability challenges for farmers. Similar solutions for fish and meat are not yet economically viable; policy interventions could help create an enabling environment in these value chains, furthering the development of off-grid CCI.
No single government policy focuses on CCI deployment or offers incentives for its adoption. Existing policies and regulations around CCI mainly relate to the agricultural export market, which is small. However, regulations like milk import restrictions and efforts to develop local production are expected to indirectly drive CCI uptake, especially for components like bulk milk chillers.
Several measures could help develop and expand CCI use in Nigeria. Appropriate policies could be implemented to reduce upfront costs through incentives, promote sustainable technologies, and provide financing access. Capacity building and support for local manufacturing could also help grow the CCI market, thus reducing food waste and improving livelihoods along the agricultural value chain.
Excerpt of: Assessment of the Cold Chain Market in Nigeria (Efficiency for Access 2023)