Impacts of rural electrification revisited – the African context

ABSTRACT

The investment requirements to achieve the United Nations’ universal electricity access goal by 2030 are estimated at 640 billion USD. The assumption underlying this goal is that electrification contributes to poverty alleviation in many regards. In recent years, a body of literature has emerged that widely confirms this positive poverty impact assumption. Most of these studies, however, are based on data from Asia and Latin America. This paper challenges the transferability of impact findings in the literature to the African context. Using a unique data set collected in various African countries, the paper suggests that impact expectations on income, education and health should be discounted considerably for Africa. In many cases, the low levels of electricity consumption can also be served by low-cost solar alternatives. To ensure cost-effective usage of public investments in rural electrification, we call for careful cost-benefit comparisons of on-grid and off-grid solutions.

KEYWORDS:

• Energy access
• rural electrification
• poverty alleviation
• external validity
• Africa

Acknowledgements

This work was supported by a special grant (Sondertatbestand) from the German Federal Ministry for Economic Affairs and Energy and the Ministry of Innovation, Science, and Research of the State of North Rhine-Westphalia. The authors thank two anonymous reviewers and Christoph M. Schmidt as well as participants of the AFD-PROPARCO/EUDN Conference ‘Energy for Development’ in Paris for valuable comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. In addition to these immediate effects of electrification on people’s health, indirect effects are possible through improvements in service provision of health stations in rural areas (see Lenz et al. 2015).

2. Candles and wick lamps emit around 10–12 lumens, two-diode handcrafted torches around 10 lumens, while compact florescent lamps (energy savers) emit 240–1000 lumens (O’Sullivan et al. 2006; Grimm, Munyehirwe, et al. 2015).

3. Two exceptions are Barron and Torero (2014) and Samad et al. (2013). While both are working papers, they have an elevated probability of being published in a leading field journal as well because of the employed methods. These papers were included because they present unique evidence on solar home systems (Samad et al.) and health effects of electrification (Barron and Torero), respectively.

4. More papers can be found that study, for example, security (Bensch, Peters, and Sievert 2013) or fertility (Grimm, Sparrow, and Tasciotti 2015; Peters and Vance 2011).

5. A comprehensive list of references to reports and papers that present the findings of these studies can be found in the Appendix. Note that our work as well is or will be published in peer-reviewed journals. Hence, the decisive demarcation to the literature review described in 2.2 is that we collected the underlying data ourselves (in cooperation with African partners, obviously).

6. The electricity–health nexus via kerosene usage is also emphasised in Van de Walle et al. (2015) and IEG (2008), although it is not examined in these studies.

7. See Lenz et al. (2015) for an examination of indirect health effects through improvements in service provision of rural health centres.

8. See Bensch, Peters, and Sievert (2015) for a detailed analysis of Africa’s lighting transition from kerosene to LED.

9. More details on these data sets can be found in Bensch, Kluve, and Peters (2011) for Rwanda, Harsdorff and Peters (2010) for Benin and Bensch, Peters, and Schraml (2010) for Mozambique.

10. Instead, electrification might generate more environmental benefits to the extent that harmful dry cell batteries are replaced. The potential environmental implications of increased dry-cell battery usage are discussed in Bensch, Peters, and Sievert (2015).

11. In addition, in all studies we examined time use of sub-groups (girls/boys, primary/secondary school) and did not find an increase in total study time, either. The only exception are primary school boys in the Rwanda Periphery sample who increased their total study time by 12 minutes.

12. See also Neelsen and Peters (2011) and Peters, Vance, and Harsdorff (2011).

13. See Barnes (2007) for further examples from non-African countries in which electrification led to improvements in irrigation through the use of electric pumps.

Additional information

Funding

This work was supported by a special grant (Sondertatbestand) from the German Federal Ministry for Economic Affairs and Energy and the Ministry of Innovation, Science, and Research of the State of North Rhine-Westphalia.

Notes on contributors

Jörg Peters

Jörg Peters is a specialist in access to modern energy in developing countries and the evaluation of development interventions. He has conducted and supervised various evaluations based on quantitative surveys, institutional analyses, and qualitative assessments applying the OECD/DAC-criteria. He led an international consortium that was appointed by the Dutch Ministry of Foreign Affairs to evaluate the Promoting Renewable Energy Programme (PREP), which invests 500 million Euros into climate relevant bilateral and multilateral interventions. Furthermore, he is responsible for the methodological coordination of a research project that studies housing micro-finance programs in Ghana, Kenya, and Uganda. In addition, he designed the methodology and supervised the survey implementation of various evaluation studies for rural electrification and improved stove dissemination projects in Benin, Burkina Faso, Ghana, Indonesia, Rwanda, Mozambique, Senegal, Uganda, Tanzania, and Zambia. He has advised several international organizations such as the United Nations, World Bank, 3ie, FMO, and GIZ. He studied economics and statistics in Cologne and Paris and holds a PhD from Ruhr-University Bochum. He is fluent in English, French, and German. His research findings have been published in the leading refereed journals in the field, for example Journal of Health Economics, Journal of Economic Behavior and Organization, The Energy Journal, Land Economics and World Development.

Maximiliane Sievert

Maximiliane Sievert has seven years of experience in the evaluation of development interventions in several developing countries in Africa, Asia, and Latin America. She has specialized in applied research in the area of environmental economics with a focus on the relation between poverty and improved access to water, energy and finance infrastructure. She studied economics and Latin American history at the University of Cologne and Santiago de Chile and holds a PhD in Economics from the Ruhr University Bochum. With a strong theoretical background in applied econometrics, she has gathered extensive practical experience in leading studies of impact evaluation, including study design and implementation of household and enterprise surveys. Maximiliane has advised international organizations such as 3ie, FMO, GIZ, and the Netherlands Enterprise Agency (RVO) in Burkina Faso, Colombia, Ghana, Indonesia, Peru, Rwanda, Senegal, Tanzania and Uganda. She has published in refereed journals such as the Journal of International Development, Journal of Development Effectiveness, Journal of Rural and Community Development, and European Journal of Development Research. From April 2009 to March 2010 Maximiliane worked on market and competition analyses in the waste management sector for an independent consulting firm. Maximiliane is fluent in English, Spanish, French and German.