Off-Grid Electrification Financing Is Failing

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840 million people live without electricity in the 20 countries targeted by SEforALL’s Energizing Finance report. Image: UN Sustainable Energy for All

For all of the excitement about using solar power to bring electricity to the more than 1 billion rural poor worldwide living without it, big picture trends provide a sobering reality check. In spite of innovative off-grid technology and business plans and high profile initiatives aiming to power remote villages in subsaharan Africa, for example, electrification there is still falling behind population growth. In 2009 there were 585 million people in sub-Saharan Africa without power, and five years later that figure had risen to 632 million, according to the latest International Energy Agency (IEA) statistics.

A first-of-its-kind deep-dive analysis of the flow of capital, released by the United Nation’s Sustainable Energy for All (SEforALL) program today, shows that off-grid systems simply are not getting the support they deserve. “This research shows that only 1 percent of financing for electrification is going into this very promising and dynamic energy solution,” says SEforALL CEO Rachel Kyte, who says the findings are “a wake up call” for the international community. Continue reading

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Does Electrification Really Cause Economic Growth?

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Villages brightened from 2001 (L) to 2011 (R). Images: Burlig & Preonas / NOAA

Electrification is associated with a seemingly endless list of social and economic goods. Nations that use more power tend to have increased income levels and educational attainment and lower risk of infant mortality, to name but a few. So I was baffled to stumble across a pair of economic analyses on electrification in India and Kenya, posted last month, that cast serious doubt on what has long assumed to be a causal link between the glow of electricity and rural development.

“It is difficult to find evidence in the data that electrification is dramatically transforming rural India,” concludes Fiona Burlig, a fourth-year UC Berkeley doctoral student in agricultural and resource economics who coauthored the India study. “In the medium term, rural electrification just doesn’t appear to be a silver bullet for development.” Continue reading