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Publication - The Impact of Rural Electrification – Results of the 2013-2019 Impact Monitoring of the Investments in Rural Electrification in West Nile Sub-Region, Uganda
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Even for rural businesses in trading centres, grid electricity does not appear to be a game changer: even though more businesses use TVs and fridges, they did not increase business hours or employment, nor their turnover. In opposite, town business increased employment by 22% and more than doubled their turnover in the same time period. Observed economic effects might be suppressed by low reliability of grid power and the limited business capacity and access to financing in rural areas. But increased competition between rural and urban businesses should be investigated, to check for possible crowding-out effects of grid access in rural areas. For decades, the grid extension has been perceived as the ultimate means for rural electrification, its high costs were justified by the achieved welfare gains in rural development. But cost reduction in off-grid solar as well as sobering results of recent impact studies for grid and off-grid electrification emphasize that policy makers should re-consider impact assumptions and cost-benefit rationales for future electrification planning and strategies. Future grid extension strategies should primarily target economic focus areas, building on sound assessment of business capacity, market potentials and linkages, and integrate these into rural economic development strategies.
The impact monitoring was implemented by SiNERGi GmbH and comit GmbH on behalf of the Government of Uganda and KfW Development Bank.
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