Publication - Double Dividend: Power and Agriculture Nexus in Sub-Saharan Africa

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Title

Double Dividend: Power and Agriculture Nexus in Sub-Saharan Africa

Publisher

The World Bank

Author

Sudeshna Ghosh Banerjee, Kabir Malik, Andrew Tipping, Juliette Besnard and John Nash

Published in

January 2017

Abstract

Increasing access to modern electricity services in Sub-Saharan Africa is one of the main development challenges facing the world over the next two decades. Inclusion of the target to “ensure access to affordable, reliable, sustainable, and modern energy for all” in the Sustainable Development Goals (goal 7) has brought a sharper focus to accelerating electricity access in the historically underserved regions of the world—most notably Sub-Saharan Africa. Two out of every three people in Sub-Saharan Africa live without electricity, a reality that is inconsistent with

the modern world. The majority of this population without access to electricity is rural and poor. Rural electrification efforts in the region have not achieved sufficient progress in increasing electricity access as these areas are typically commercially unattractive, characterized by sparsely distributed customers with low electricity consumption and ability to pay, and a high cost of service to extend the grid. Rural enterprises and households thus must cope without electricity, relying instead on expensive, poor quality backups (e.g., diesel, kerosene or other oil-based sources), thereby stunting productivity, limiting development outcomes, and imposing harmful environmental impacts. The rural economies are overwhelmingly dependent on agriculture; in fact, agriculture and agribusiness comprise nearly half of Africa’s gross domestic product (GDP). These enterprises require electricity to grow to their potential, while the expansion of rural energy services needs consumers with consistent power needs to serve as a reliable revenue source.

Can agriculture and energy come together in Sub-Saharan Africa to offer a double dividend with

benefits to enterprises, households, utilities, and private-sector service providers? This is the central question of this study. That is, can energy intensive activities along the agriculture value chains provide significant revenues to the power utilities and increase the financial viability of rural electrification? Combining agricultural load with other household and commercial power demand could increase the feasibility of extending the grid or creating opportunities for independent power producers and mini-grid operators. Drawing on a suite of case studies, this study offers insights on what it would take to operationalize the opportunities and address the challenges for power-agriculture integration in Africa.

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