State of Karnataka funds 250 million USD in drip irrigation programs

Bangalore, July 2015 — Through the catalytical role of 2030 WRG, the State government of Karnataka committed an investment of 250 million USD to fund the implementation of drip irrigation programs for the production of sugarcane across the state.

With over 430,000 hectares under sugarcane cultivation and sugar output of 4 million tons, the state of Karnataka accounts for 8.3 percent of India’s area and ten percent of its sugar production, respectively (S. Nijalingappa Sugar Institute, CACP report, 2014). However, the prevalent practice of flood irrigation in the sector is leading to sub-optimal utilization of constrained water resources.

Playing a key role in convening financial institutions, sugar mills, farmer organizations, and government around agri-technology finance, 2030 WRG is facilitating the development of concrete and implementable financing solutions for drip irrigation in sugarcane in Karnataka.  The focus on business benefits is also driving a paradigm shift in the traditionally subsidy-driven approach for drip adoption nationally. The engagement is analyzing the potential for creation of ‘smart’ subsidies, whereby subsidies serve as market-linked policies, which incentivize unlocking of bankfinance for micro irrigation.

Endorsing 2030 WRG’s role, Aravind Galagali, Director, Krishna Bhagya Jala Nigam Limited (KBJNL), Water Resources Department, Government of Karnataka elaborated: “As a neutral catalyst with a global presence and strong networks across the private sector, 2030 WRG offers an inclusive yet market-based approach by mobilizing large-scale funding for drip irrigation for sugarcane in Karnataka. Facilitating the interaction between the sugar industry, financial institutions and technology solution providers, the engagement will unlock one of the key bottlenecks hindering agri-technology adoption in the state and nationally, namely, finance.”

Proposed to be guided by a multi-stakeholder committee composed of the state’s leading financial institutions, sugar mills, government, and other enabling agencies, the engagement will facilitate the exchange of information among stakeholders on an ongoing basis for effective tracking of results.