Tikuna : Circular Energy

Tikuna : Circular Energy: Social inclusive renewable energy working with small farmers in Latin America

Santiago, ChileChile
Year Founded:
2014
Organization type: 
for profit
Project Stage:
Start-Up
Budget: 
$100,000 - $250,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Farmers in Latin America are facing several problems related with climate change. Tikuna is an initiative that works with affected farmers to increase and diversify their incomes through the development of clean, profitable and inclusive renewable energy projects.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if we design profitable clean energy projects that help small farmers affected by climate change to increase their incomes and at the same decarbonize the energy matrix?
About Project

Problem: What problem is this project trying to address?

Climate change is currently one of the most pressing problems. Latin America is not an exception. The agriculture industry has been specially affected by the change in weather patterns and an increase of extreme weather events. The most affected so far have been small farmers who have low capacity to deal with years of low economic results. As a consequence many small farmers are selling their lands and moving to cities looking for opportunities.

Solution: What is the proposed solution? Please be specific!

In some cases lands that have low agricultural value have great potential for renewable energy projects. Our project, Tikuna, partners with farmers to develop clean energy projects. Tikuna does all the technical and economical studies to analyse the opportunity to build profitable solar, wind or biomass plants to fight back climate change. If a project is viable then all economic resources are provided for construction through a partnership with investment funds. Farmers receive 2-3% of the energy sales to the matrix or to a specific customer which doubles the farmers income and reduces the economic risk of depending on one agricultural activity. A better economic performance protects small farmers, key for a sustainable farming future .

Awards

none
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Demetrio Silva is a small farmer from central south Chile. He lives with his mother and brother. The three of them are dedicated to sheep farming in the 50 hectares land they inherited from their father. Today the land face big problems related with water scarcity and land degradation. Currently the family has an income between USD 10.000 - 15.000 per year from sheep. Tikuna is currently doing the technical studies to analyse the possibility to build a 3MW photovoltaic plant in their lands which would increase the family income in USD 12,000 per year using only 12% of low grade land. Initial calculations show it is economically profitable and interesting for funds. Furthermore, it will provide energy for 2,500 households in the area.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

To date Tikuna has 3 potential pilot projects in agreement with local farmers in Chile. Furthermore, we have developed partnerships with investment funds. Therefore, we have the initial evidence that the proposed scheme is financially attractive and viable without subsidies. After the pilot phase and first plants are built, the target for 2016 is to develop 30MW of small renewable energy projects in partnership with 10 different farmers. Each project would generate an extra yearly income between USD 12,000-15,000 in a country where 50% of the workforce earn less than USD 5,200 per year. This would help farmers to keep and work their lands, key for a sustainable farming future and a circular economy. The idea is to learn from the experience and during 2017 reach 30 farmers and 100 farmers by the end of 2020. This level of deployment would generate clean energy for 200,000 homes.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

Tikuna`s objective is to bring a solution that not only tackles the difficulties that local farmers are experiencing with climate change but also fights back the rising levels of GHG in the atmosphere. We have learnt from other countries and know that policies change. Our model works without subsidies and it is attractive for both, farmers and investors. Once 5-10 plants are built we will launch a strong communication strategy aimed at farmers. This will help to scale up the number of projects and include other clean technologies which will help to spread geographically in Latin America.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

Initially Tikuna has been supported by the founders and private investors securing working capital to develop the first pilot projects. For each project that demonstrates to be technically and financially viable Tikuna will find the correct investment fund. If a project is financed and built, then Tikuna receives a fee. The fees will be reinvested in the search and development of new projects securing the financial sustainability in time.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Today in Chile there is a group of renewable energy developers working in solar and wind energy projects. The main difference of Tikuna is the inclusive approach. Tikuna works with farmers to become partners in the projects and to provide clean energy for their local community and business. We declare as a main goal to substantially improve farmers quality of life through a shared value model. Furthermore, Tikuna works in projects at human scale, with a clear conviction of the transition to a distributed generation model. Local energy generation for local demand using local resources.
Team

Founding Story

Solar industry has developed very fast in Chile during the last two years. We saw different companies and entrepreneurs that would state that was possible to build profitable renewable energy projects without subsidies. The idea came from a casual conversation between both. Most people developing these business in Chile were missing a point. What if we use the green tech revolution and include farmers that are looking what to do with lands that have no water for irrigation in the business. What if we become the best partners of farmers and help them with our knowledge to increase their incomes. After that simple question Tikuna was born with the belief that a circular economy is possible.

Team

Our team is composed by two members which are also the co-founders. The first co-founder is Martin Elton. He holds a degree as Industrial Engineer from Universidad de Chile and an Mphil in Engineering for Sustainable Development from Cambridge University, UK. His main experience is in the renewable energy and energy efficiency sector. During the last three years he has lead non-profit projects related to Local Energy Strategies in different regions of Chile working closely with key stakeholders and the Ministry of Energy. He has also participated in research projects for the solar industry in collaboration with GIZ. Before working in the energy sector he led projects to develop an entrepreneurial environment in communities close to mining operations. He is currently dedicated full time to Tikuna and his main role is to do all project management and investor relationships to complete three ready to build pilot projects in the first year. Jordi Dagá, the second co-founder of Tikuna, holds a degree as Civil Engineer from Universidad de Chile and an Mphil in Engineering for Sustainable Development from Cambridge University, UK. Strong experience in energy project development, project finance and has been involved in the development of energy projects based in different technologies including a solar PV of 50MW and 7 small hydro projects. Jordi is currently dedicated part-time to Tikuna. His main role is to work in the financial models to analyse requirements and viability of potential renewable energy projects. Furthermore, his constant connection with the energy finance sector brings quick insights about changes in the sector. He also has a good network of suppliers and investors related to the energy sector in Chile.
Background
Please confirm how you heard about the Unilever Awards:

Cambridge News Letter

Please confirm your role in the initiative (eg Founder/co-Founder) and your organisational title:

co-founder and General Manager

Which of the 8 UN Global Goals (Sustainable Development Goals) pre-selected for this competition does your solution relate most closely to? [select all that apply]

No Poverty, Affordable and Clean Energy, Decent Work and Economic Growth, Climate Action.

Leadership and the Unilever Awards
Please provide examples of any previous entrepreneurial initiatives you have pioneered.

Martin Elton has experience in entrepreneurial activities since the start of his professional career. One of his most important experiences was working in Anglo American Foundation in the Emerge Programme in the years 2009-2010. Through the Emerge programme he personally assessed and mentored more than 20 entrepreneurs and owners of SMEs in communities close to mining operations across Chile. The objetive was to substantially increase the income and knowledge of entrepreneurs. The work considered University level education for entrepreneurs and business plan development to increase profit or impact.
Afterwards, during his last years in Fundación Chile, a non-profit organization dedicated to innovation, Martin personally pioneered new energy projects for the organization which included identifying the opportunity, finding financial resources and structuring a model. One example is the partnership with Valhalla. He designed a partnership with the most innovative large infrastructure project being developed by a strat-up in Chile. A 300 MW sea-water pumped storage power plant. Fundacion Chile today is a shareholder of the project. He also structured an agreement with the Ministry of Housing to create the first open data platform in Latin America to monitor online living conditions in the Chilean housing sector considering temperature, materials, air quality, number of people in the house and moisture.
Jordi Daga, the second co-founder also has significant experience as entrepreneur. With only 20 years he developed his own two mini hydro power plants close to his hometown in southern Chile. Both projects were designed and developed through a company called Trufulco. Both projects were later sold to an energy company that build and operate these kind of projects.

Beyond your existing team, who else are you working with to achieve your objectives, eg partners, advisors, mentors?

A third member currently collaborating with the project is Tikuna`s mentor and main investor, Andrew Wallace. Andrew has over 20 years of experience in the food industry and agriculture. MBA from the University of Cambridge and Civil Industrial Engineer from Universidad Católica de Chile. In 2006 he won the Innovation Entrepreneur of the year, award given by the Chilean National Society of Agriculture (SNA) and presented by the President of the Nation. In 2007 he was awarded the Capital business magazine award for the Best Commercial Director in the fruit industry, elected by peers among the industry. He brings strong business experience and insights from the agriculture world.

A fourth member involved as an advisor and investor is Francisco De Undurraga. Also an engineer from Universidad de Chile he has an MBA from Stanford University, USA. He has more than 35 years of experience including high level managerial positions in different big companies of Chile. Francisco worked for more than 10 years in the energy sector in Chile in generation and distribution companies. He also held the position as CEO in one of the main distribution companies in southern Chile. He is currently dedicated to business development with companies in the forestry, food, energy and real state areas. He collaborates as an investor and advisor for complex decisions and in the design of competitive strategies.