Shuraako, Solar, & SHABA: The Impact of Investing in Somali Companies

Solar Panel Installation in the Somali Region
Solar installation at SHABA Water Company. Photo by Said Abib of KAAFI Solar

Shur·aa·ko· (noun) - Somali for “partnership.”

A partnership, an agreement, a shared collaboration between two or more entities to accomplish a common purpose... that’s exactly what our Shuraako program seeks to foster. Shuraako works in conflict-affected areas and their local enterprise markets to develop a more resilient private sector. The program connects local entrepreneurs with the opportunities they need to make an impact that lasts, forever changing the economic foundation that is the backbone of Somaliland. 

How do they do this? Through collaboration with organizations like the Nordic Horn of Africa Opportunities Fund, financial opportunities become a reality, fueling the Somaliland economy. The Nordic Horn of Africa Opportunities Fund (“Nordic Fund”) is an investment fund for Somali small - to mid-size enterprises (SMEs), acting as the initiator and anchor investor of the Fund and other investors.

Meet the SHABA Water Company

Organizations like the SHABA Water Company collaborated through our Shuraako program with the Nordic Fund to finance the solar panels needed to be able to produce enough clean water for their entire community. SHABA is in a Public Private Partnership with the local government where they manage the water for the entire district. With the investment from the Nordic Fund, they were able to successfully hold up their end of the deal, and do it with green energy as opposed to their previous generator.

The Issue: Rising Populations & Not Enough Water to Go Around

Established in 2006, SHABA is a water supply company founded in Borama, a rapidly growing city in the Awdal region of Somaliland. With quick tripling growth over the last decade, and an expectation of becoming one of the highest populations in the region in the near future, Borama has a vast number of citizens to support. Recently, the spike in population growth has led to immense water shortages and deterioration of available local resources. 

The demand for clean, fresh water will only continue to grow, and that’s where the success of SHABA comes in. SHABA works to produce and distribute clean water to all of the local Borama citizens. Before SHABA, the local public utility managed the water supply in the city and maintained four boreholes for their water distribution system, but was unable to meet the needs of the entire Borama community. 

SHABA Chairman Abiib Mohamed Mooge said, “SHABA Partnership with Funds from Shuraako is very important for our company and SHABA highly appreciates the role of the Nordic Fund and Shuraako in supporting the Borama town water supply. We benefited from a low operational cost and solar is better for the environment.” 

The Impact of Solar

Once SHABA took over, they were able to drill an additional 10 boreholes to significantly increase the daily production of clean water, in addition to the technical services they provide for household connections and repairs. However, there was still a great need to expand clean water production further, as the growing population will only continue to rise. How could they increase production with a generator that could only produce so much energy? This is where the Nordic Fund’s financing of the solar panels comes in. 

Now, running a hybrid system that is mainly  renewable energy, they are able to produce more water more effectively and keep up with the demands from rising local populations. SHABA can now produce 5,800M3/day gallons of water to supply to the 250,000 locals in the community, which is a 30% increase over what they were previously able to produce. 

Additionally, it’s important to note that SHABA isn’t alone in its much-needed transition to solar. Many other Somali companies and communities are following SHABA’s lead. 

My household did not have running water before this year before the SHABA water pipes reached us. We are very happy to have running water after having no running water for five years living in this house. SHABA staff explained that SHABA had received investment to mobilize a solar system and pipes. It’s the first time I heard that this solar uses the sun to produce electricity, I didn’t understand how, but this is better because it’s a natural source, reduces pollution, and it’s better for the environment. I have immense gratitude for SHABA and the people who provided this investment.

- Faadumo Xassan, Community Member

Improving access to low cost, reliable energy is a critical component in establishing growth and stability in Somaliland as a whole. Currently, with the lack of a national grid system and expensive fuel costs, the Somali private sector is barred from reaching its full true potential that it could see if renewable energy and hybridized systems were a more widespread solution. In fact, with one of the highest daily averages of solar radiation in the world, the Horn of Africa is a prime location for solar energy production, so all the more reason for Somaliland’s private sector to double down on renewable energy. 

To learn more about our Shuraako program, our partners, and the impact of the entrepreneurs on the ground, visit www.shuraako.org