The Independent Uganda: You get the Truth we Pay the Price
A mixed solution
Our research showed that electricity is highly appreciated by rural communities in Rwanda, often leading to cost reductions and increases in convenience. But it does not significantly transform economic activities and income generation in rural areas.
The fact that electricity consumption levels are generally very low raises the political question of whether the high investment cost of on-grid electrification is justified compared to the lower cost of off-grid solutions. Especially the cost of off-grid solar technologies have decreased considerably in recent years and, while their performance is obviously lower, they still improve the living conditions quite substantially.
These observations suggest that instead of rolling out the grid to every rural village, on-grid investments could be concentrated in certain thriving rural regions with high business potential to create industrial zones where firms could relocate to. Off-grid solar could serve as a bridging technology for the majority of rural areas, potentially accompanied by subsidies to ensure access for the poor who cannot afford paying cost covering prices. Such an integrated on-grid-off-grid strategy would enable industrial development and at the same time achieve broad access to electricity at relatively low cost.
Jörg Peters is professor, University of Passau. DrMaximiliane Sievert from RWI – Leibniz Institute for Economic Research coauthored this article.
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Jörg Peters is professor, University of Passau. Dr Maximiliane Sievert from RWI – Leibniz Institute for Economic Research coauthored this article.
