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Innovations for Poverty Action (2013)

The Impact of Subsidies on the Demand for Electrification in Rural Kenya

Subsidies Electrification Rural Kenya

Innovations for Poverty Action

Titre : The Impact of Subsidies on the Demand for Electrification in Rural Kenya

Région /Pays : Kenya

Date : 2013-2015

Over the past century, rural electrification has served as a key benchmark for economic development and social progress. Researchers conducted a randomized evaluation to measure the impact of offering subsidies to connect to the power grid on the demand for electricity in rural areas of Kenya. Few households took up the offer to connect to the grid, even at highly subsized prices. Beyond price, issues of credit constraints, bureaucratic obstacles, and poor reliability of the electrical utility may have lowered household demand for electrification.

In sub-Saharan Africa, roughly 600 million people currently live without electricity (IEA 2014). Access to reliable and affordable energy can be critical for a country’s sustained economic growth. Achieving universal access to modern energy is thus a primary policy goal in the region. International development assistance has focused on investments in infrastructure, including electricity systems.

Recent initiatives to improve access to electricity have focused on the transmission and distribution of electricity, while less is known on the economic and social returns to providing electricity to last-mile households – end users of grid electricity in hard-to-reach areas. It remains contested whether increases in energy access for rural households should be driven by investments in large-scale infrastructure, such as grid connections, or small-scale decentralized-solutions, such as solar lanterns and so- lar home systems. What are the social and economic impacts of access to the electric grid in rural areas ? Are the benefits of accessing the electric grid worth the costs of connection ?

Taille de l’échantillon  : 2,289 non-electrified households in 150 rural communities

Innovation for Poverty Action (IPA)

Page publiée le 9 septembre 2023