More than 700 million people worldwide lack access to electricity, especially in sub-Saharan Africa, which hosts more than 70% of the world’s non-electrified population. To reach the United Nations’ SDG 7 (Ensure access to affordable, reliable, sustainable and modern energy for all) by 2030, a big electrification push in Africa is needed. Rural electrification programs, such as the Energy Access Roll-Out Program (EARP) in Rwanda, have often been effective in extending electricity lines and increasing the national electrification rate. Yet, in many areas now served by the electricity grid, connection rates are modest and consumption levels low. This slows down achievements on the way towards the universal access goal, and challenges the cost-effectiveness and long-run economic sustainability of these grid extension efforts.
One potential reason for the limited electricity consumption post-connection are liquidity constraints, but detailed mechanisms have barely been studied rigorously. This study will look into what affects the demand for electricity, and whether complementary access to grants can increase electricity consumption and economic growth in rural areas. We expect these results to help in the design of measures to increase electricity consumption and the effectiveness of electrification interventions in terms of economic development and growth.
To encourage electricity consumption, the Rwandan government is piloting a project that supports connected communities to use electricity for productive economic activities. Our research project sets out to randomize this governmental program to analyse how electricity consumption in grid-covered rural areas can be encouraged. Our study design relies on a randomized controlled trial.
Beyond the importance of our work for the academic literature, our findings will be extremely valuable to shape future policy in the electrification sector in Rwanda and across Africa. Fostering electricity consumption and thereby improving revenue collection will be key for policymakers to assure long-term sustainability of their grid access policies.