Uganda—often celebrated as the Pearl of Africa—is endowed with fertile soils and a favourable climate that make agriculture the backbone of its economy. The sector employs more than 65 percent of the population, with livestock and dairy production playing a particularly vital role in rural livelihoods, especially in Western Uganda.
Amdist this potential, rural communities continue to face persistent challenges: limited access to reliable electricity, high unemployment among youth, weak infrastructure, and post-harvest losses. These constraints not only slow economic growth but also prevent farmers—especially young people and women—from fully benefiting from agricultural value chains.
A lifeline for rural Uganda through dairy farming
The dairy industry in Uganda has steadily grown over the past decade, producing approximately 3.85 billion litres of milk annually. About 70 percent is marketed, while 30 percent is consumed at household level, underscoring the sector’s importance for both income and nutrition. The majority of milk is produced by smallholder farmers, many of whom own fewer than 10 cattle and operate in off-grid rural areas.
In Western Uganda, dairy farming is the primary source of income for thousands of households. However, poor cold storage, unreliable power, and long distances to markets often lead to significant milk spoilage, reduced prices, and lost income. To address these challenges, farmers are increasingly organising themselves into cooperatives to bulk milk, improve quality, and access better markets.
A cooperative rising against the odds
One such example is Kanyabihara Model Farmers’ Co-operative Society, located in Nyakasharara Sub-county, Kiruhura District. Established in December 2021 by 34 dairy farmers, the cooperative was formally registered with the Ministry of Trade, Industry and Cooperatives in 2022. Today, it has grown to 66 active members, including youth and women.
The cooperative provides a range of services to its members: milk bulking and value addition, savings and loans, veterinary services, market information, and training in quality improvement and climate-smart agriculture. Membership requires a subscription fee of UGX 100,000, ownership of at least five shares (UGX 20,000 per share), residence in the community, and active engagement in dairy farming.
What began as a modest operation bulking 1,000 litres of milk per day has grown into a thriving enterprise. Through collective investment, the cooperative acquired a 5,000-litre milk cooler, a generator, milk cans, and a motorcycle. By 2025, Kanyabihara was handling up to 8,000 litres of milk daily, generating an estimated UGX 248 million in monthly revenue, while experiencing daunting operational hurdles.
The hidden cost of unreliable power
Despite this progress, access to affordable and reliable electricity remained a critical bottleneck. Like many rural dairy enterprises, Kanyabihara relied on diesel generators to preserve milk. Fuel costs alone amounted to UGX 6 million per month, excluding maintenance and transport expenses. Similarly, Rwigi Dairy Farmers’ Cooperative, with a bulking capacity of 3,000 litres per day, spent approximately UGX 3 million monthly on diesel, significantly reducing profit margins. Occurences such turning off generators in order to reduce risk of damage due to excessive use, leading to inconsistent power also restricted value addition, increased post-harvest losses, and constrained business expansion.
Targeted support to strengthen businesses
In 2024, following a comprehensive needs assessment, AVSI Foundation, through the Scalable Battery Leasing Project, provided tailored support aimed at strengthening the cooperatives and surrounding busniesses before connecting them to electricity. Kanyabihara Cooperative received: 1,000-litre milk cooler, a motorcycle for extension services, a desktop computer and tablet for records and management, a silage cutting machine and eight large milk cans. This support increased milk bulking capacity from 5,000 to 6,000litres, attracted larger buyers, and improved price negotiations. The silage cutter alone eliminated the need to hire machines from distant towns—previously costing UGX 400,000 per session—saving farmers up to UGX 280,000 per session and generating additional income for the cooperative. AVSI also delivered hands-on training in yogurt production, silage making, mineral block production, financial literacy, climate-smart agriculture, and animal health—recognising that strong and viable businesses go hand in hand with sustainable electrification.
The assessment also informed the needs for Rwigi Cooperative as a chaff cutter, 10 milk cans, animal medicines worth UGX 15 million, a motorcycle, and training in animal health, leadership, and business management which were items where provided through Rwigi’s strategic partnership with AVSI Foundation, increasing daily milk bulking from 2,000 to 3,000 litres. Beyond dairy, AVSI assessed the small businesses in the surrounding communities and supported them through a cost-sharing approach to acquire productive-use appliances—ensuring that the future cost of electricity could be sustainably absorbed at community level.
Scaling renewable energy for rural transformation
The Scalable Battery Leasing for Sustainable Ugandan Minigrids, funded by EEP Africa, is an 18-month initiative implemented by a consortium led by Vittoria Technology, in partnership with AVSI Foundation and FRES Uganda. Operating in Kiruhura and Kazo Districts, it aims to improve the affordability and viability of modular, scalable energy storage solutions for rural mini-grids. The programme connected three rural mini-grids, directly benefiting dairy cooperatives and 31 surrounding household and small businesses in the pilot phase that ended in July 2026.
Since connecting to the mini-grids, cooperatives have experienced more than 50% reduction in energy costs, elimination of fuel procurement and generator maintenance and stable, high-voltage power for cooling, processing, and security lighting.
Lives and businesses transformed
After I connected to the mini-grid, my sales of cold drinks have more than doubled—from 10 to 24 bottles per day. With reliable power, I now plan to sell refrigerated milk, juice, and yogurt,
Joshua Akanyimakyi, retail shop owner, Kiruhura.
Our power costs reduced from UGX 3 million to UGX 1.5 million per month. Cases of theft have reduced due to constant lighting at night, new businesses are opening, and employment is growing.
Saul Taremwa, Chairperson, Rwigi Dairy Cooperative.
With constant electricity, I can operate for longer hours into the night, run CCTV, offer photocopying services, and I’ve even started a laundry business.
Friday Norman, electrical business operator, Kazo.
The presence of power has reduced our operational costs hence increased profits. Our cooperative is stronger and more resilient and we hope the cost of the power per unit can be reduced in the near future.
Vanice Matsiko, Chairperson, Kanyabihara Cooperative.
A model for sustainable rural development
By prioritising business viability before electrification, the Scalable Battery Leasing Project demonstrates that energy access is most transformative when paired with skills, assets, and market readiness. This partnership offers a scalable model for rural Uganda by powering machines, resilience, value addition, employment, and inclusive growth, driving communities to harness renewable energy, strengthen agricultural value chains, and build long-lasting livelihoods for generations.
