The long-term adoption of grid electricity: Evidence from rural Rwanda

Electricity access is at the forefront of development policy. But does it improve livelihoods and lift people out of poverty? The academic literature provides an inconclusive answer to this question. Recent impact evaluations of grid extension programmes in sub-Saharan Africa document limited adoption of electricity by households and microenterprises and, hence, muted impacts on economic development (see, for example, this study in rural Kenya). A common critique is that these studies only look at the short term, and perhaps impacts take more time to materialise. We discuss the findings of our ten-year follow-up study on Rwanda's grid extension programme, highlighting key results and implications for electrification policies. 

Rwanda’s electrification journey

As part of its efforts to meet SDG-7 of ensuring access to clean and affordable energy, Rwanda embarked on an ambitious initiative to expand energy access. The Electricity Access Rollout Program (EARP), a cornerstone of this transformation, sought to extend grid connections to rural areas. The grid connection rate has rapidly increased from 6% in 2009 to 54% by 2023, making Rwanda one of the fastest-electrifying countries in sub-Saharan Africa. An initial evaluation of the EARP provided mixed results, showing noteworthy usage patterns in households, such as increased lighting for studying and other household chores, entertainment devices and phone charging. Yet, consumption levels were extremely low, in connected enterprises as well, and hence there was no evidence of significant economic impact. 

In our study, we revisit the same 41 communities to assess the long-term outcomes of this electrification push. Our analysis relies on comparing self-collected survey data from households and community leaders across multiple years, with the most recent wave collected in 2022, up to ten years after electrification. We triangulate these findings with administrative consumption data from 147,000 rural households nationwide. This allows us to measure the evolution of electricity adoption and its effects on economic development over time.

Rural electricity consumption remains low even in the long term

Connection rates stagnate at low levels

While the grid has been extended to almost all communities in our sample, Figure 1 shows that many households remain unconnected. Up to ten years after the initial rollout, only 51% of households in electrified communities are connected. Even among those located directly under the grid, only 82% have connected, with little growth in connection rates over the years and despite subsidised connection fees and instalment plans to reduce upfront costs.

Figure 1: Connection rates over time

Minimal growth in electricity consumption

For households that are connected, electricity consumption remains very low. The average connected household consumes just 8.1 kWh per month, which has barely changed since 2013. Most households use electricity primarily for basic needs such as lighting and phone charging, with only 23% owning any appliances beyond lamps, mobile phones, or radios. Productive use of electricity, such as for farming or business purposes, is almost non-existent, limiting the potential for economic growth.

Limited impact on local businesses

We find no indication of noteworthy enterprise creation or of existing enterprises starting to use electricity productively. While most local enterprises are connected to the grid, few have seen substantial economic benefits from electrification. Most businesses, such as small shops, bars, and hairdressers, use electricity mainly for lighting and devices like television or radio. Only half of the communities have manufacturing firms, like millers, carpenters, and tailors. These firms use grid electricity for operating equipment, though many also continue to work with mechanical or diesel-run appliances despite their grid connection. The creation of new, electricity-dependent businesses has been minimal.

Low electricity utilisation is a common development challenge

We triangulate the survey data from 41 communities with administrative consumption data from a large sample of 147,000 rural households in Rwanda and confirm the pattern of low average consumption per household (see Figure 2). Other studies in sub-Saharan Africa have also documented low connection rates and minimal economic impacts from rural electrification programmes. Countries like Kenya and Tanzania, which have similarly ambitious electrification goals, face similar challenges. The patterns observed suggest that electrification alone is not sufficient to drive economic development in rural areas.

Figure 2: Electricity consumption over time, by year of connection (147,000 rural households)

Rethinking the role of electrification in economic development

By 2030, the United Nations aims to provide access to the 685 million currently unconnected people, most of whom are located in rural areas in sub-Saharan Africa. This will require massive investments. The International Energy Agency estimates that achieving universal access would cost over USD 30 billion annually.

Rwanda’s experience underscores both the potential and the limitations of grid expansion for development. Our findings might help to recalibrate the rationale behind energy access policies. With low household consumption and limited productive use of electricity, justifying these large investments from a cost-benefit perspective is challenging. Yet, there are other reasons for advocating rural electrification. Many people see electricity and other infrastructure as a human right grounded in normative principles instead of cost-benefit considerations. Perhaps donors and development organisations could be more explicit in taking a stance with human rights in consideration instead of legitimating policies with impact hopes that do not seem to materialise within time spans that are relevant for cost-benefit analyses.