The CARBON Copy (CC) team recently spoke with Kennedy Ng'ang'a, founder of ecological data platform Shamba Network. In this two-part interview, Kennedy sheds light on anticipatory cash transfers, dMRV, and his thoughts on the state of ReFi in Kenya and beyond.
CC: Really appreciate you taking the time to chat with us, Kennedy.
Kennedy: My pleasure.
CC: Can you start by giving us a bit of background on yourself? Where you’re from, how you got into climate impact and ReFi.
Kennedy: I'm based in Nairobi, Kenya. My background has been in agricultural research. I worked for about 15 years as a research assistant with the International Centre for Tropical Agriculture (CIAT), working with smallholder farmers to help them improve their yields and also help them make their environments more sustainable for quite a number of years.
I was using a lot of space technology in my work, things like spatial data and spatial analytic satellite imagery. When I got into Web3, I started out as a “degen,” but quickly figured out that, you know, the ReFi space was where I was supposed to be and that the data I was working with could be very impactful.
CC: So then you founded Shamba Network. How would you describe the company?
Kennedy: Shamba Network aims to bring ecological data on-chain so that we can do two things. The first one is to unlock climate resilience for vulnerable communities by enabling new forms of resilience measures such as new types of insurance that are based off of Web3 and can leverage satellite data.
The second is in the area of climate change mitigation and looking at how we can provide ecological data on-chain that underlies things like carbon credits or ecological credits in general. Also how we can make access to the carbon markets more democratised so that the groups that have been traditionally excluded from climate action - they haven't been able to participate in a meaningful way and get incentivised for their climate action - can now tap into these carbon markets to get the financing they need to be able to do climate action sustainably.
CC: And who are the beneficiaries?
Kennedy: Our target beneficiaries are smallholder farmers, those with usually less than 2 hectares of land per household. These are the communities that have been shown to be the most vulnerable to things like climate change, especially in Africa.
A lot of these communities depend on farming as their sole economic activity, and the farming that they do is rain-fed farming, so when you have climate upheaval and the rains getting late, you tend to end up with situations such as famine. So these are the groups that you really want to support to help them become more climate resilient so that they can reduce their vulnerability.
But we also believe that this group can play a very big role in climate change mitigation. We wanted to see how we can unlock the carbon markets for these folks so that they can get the funds to take climate action. The reason for this is that about 80% of the farmland in Africa is controlled by smallholder farmers. So when we talk about regenerating African landscapes, the role of the smallholder farmer is pivotal. And so we need to come up with tools and mechanisms to support these people.
CC: Can you tell us a little bit about the partners that you work with?
Kennedy: In terms of things like carbon credits, our partners include Thallo, which is a carbon marketplace where we bring in our carbon credits. We also work with registries, among them is Regen Network and the BioCarbon Registry.
We also have grassroots partners we work with. I can mention a few names: Premier League Leadership Foundation and Youth Action for Rural Development. These organisations monitor and supervise the work happening on the ground. Then we work with community-based organisations who implement the actual activities on the ground.
On the climate resilience side, we’re working with DIVA Protocol on a pilot project that aims to provide a safety net for farmers. We’re also working with Fortune Credit, a micro-finance organisation here in Kenya and other parts of east Africa. We provide them with the infrastructure they need for their micro-insurance applications.
I think at the moment we have about 40 different partners in the Web3 space and between 120-130 grassroots partners.
CC: It sounds like you have quite an international scope.
Kennedy: Yes, we do have an international scope, and that is because the kind of data we are developing for farmers here is relevant to people in other parts of the world. When we talk of smallholder farmers, Southeast Asia, India, and Latin America are places where you find these farmers, so we also have partners across these regions.
CC: Let’s talk about the recent announcement of a pilot project by Mercy Corps Ventures, Shamba Network, Fortune Credit, and DIVA Technologies to get anticipatory cash transfers to communities ahead of climate shock. Could you start by explaining the concept of anticipatory cash transfers and how they work?
Kennedy: Yeah, sure, so anticipatory cash transfers get resources out to affected communities before they've suffered the full effects of a climate shock. The aim is to predict where a climate shock is going to be felt, then to release resources so that measures can be taken to mitigate the worst effects.
So say, for instance, you're dealing with pastoralists, people who keep livestock and have a nomadic lifestyle, moving from place to place in search of water and forage for their animals. If something like a drought were to hit, like what happened in east Africa over the last five years, a lot of the vegetation that would have been available for livestock ended up disappearing.
In this case, you anticipate that maybe in a month or so all the vegetation will be gone and their livestock will start starving then dying. So you release funds to them in advance and they're able to use part of these funds to buy hay or forage, or some other feed for their livestock. This helps them withstand the brutal period so that when the rain comes, hopefully they will be able to repopulate their herd.
CC: Can you give us a sense of what this pilot project will look like on the ground?
Kennedy: The whole system is a sort of hybrid system where there's a huge component of it that is Web3 driven. So through the DIVA Protocol, there are pools of funds, in USDT, held by smart contracts and there are conditions that have been stipulated that if a particular risk occurs, these funds are transferred to a wallet for off-ramping to the pastoralists.
When a risk occurs, our oracle reports to the DIVA Protocol and tells the smart contracts that this is what has happened in the real world. The smart contract is then able to determine whether the funds should be paid out to the people who have been affected and the amount that should be paid out. Because it is a graduated scale, the more severe the impact, the more funds that are unlocked.
So once the funds have been deployed by the smart contract and sent to the corresponding wallet, there is some off-ramping that happens to be able to transfer their crypto funds into fiat for use by the pastoralists. Off-ramping is done through a mobile wallet system in Kenya known as M-PESA.
CC: That is really cool. And Shamba Network’s role is to provide the data to predict climate shocks?
Kennedy: Yes, exactly. Shamba Network provides the data to do two things. Number one is to build predictive models that can tell us when a particular risk is at a very high probability of happening. Number two is reporting, so reporting what the actual situation is for the ground periodically so that you can monitor and see if you're moving towards indicators that show you a particular risk is about to occur.
CC: Who is providing the funds for the pilot?
Kennedy: So with the DIVA Donate consortium, the main source of the funds will be donations. We are building a platform that will allow even ordinary people to be able to donate. Somebody can donate a dollar here, ten dollars there. In the current pilot, Mercy Corps Ventures is giving a donation and we are hoping that other people within the Web3 community will also step up and also donate. The more donations we get, the more beneficiaries we're able to cover.
CC: What does success look like and what are the next steps if things go well?
Kennedy: Success to us is that by the end of the pilot, people who've been exposed to risk got some resources that helped them to take care of a few livestock that would have been lost otherwise. I think we're working with and hope to have a direct impact on about 260 pastoralists.
Well, I think the next steps would basically be upscaling, because we've already done a first pilot of this concept. This is actually the second pilot that we are doing within this consortium and it is an expanded one. And so if everything turns out well, we'll be at a position where we can scale this out and be able to cover even more beneficiaries.
Continue to part two of this interview.
The answers in this article are the personal opinions of Mr. Ng'ang'a and do not necessarily reflect the views of Shamba Network.