Evaluating the Impacts of Minigrid Electrification in Sub-Saharan Africa

Abstract

A large share of the population of sub-Saharan Africa (SSA) lacks access to modern energy services. To bridge the electricity access gap, distributed power generation systems such as minigrids emerge as attractive options in the power supply solution space. In this study, we empirically evaluate the role of minigrids in lightning and empowering SSA communities. The empirical analysis makes use of a geocoded database covering 1,888 minigrid projects from 27 SSA countries. Using a difference-in-differences technique and propensity score matching we estimate the association of minigrid installation with household welfare and agricultural development. For the estimation of the household welfare implications, we combine the minigrid data with the information on labor market outcomes, appliance ownership, and choice of cooking fuels from Demographic and Health Surveys. In addition, we evaluate potential changes in agricultural land conditions following minigrid installation through a satellite-based vegetation health index. Our results indicate that minigrid electrification is positively associated with households’ electricity uptake, ownership of low-power home appliances, agricultural employment, and land cultivation intensity, while on the other hand being ineffective in changing overall labor market outcomes and the choice of cooking fuels. We discuss potential reasons behind these results, which are in line with most of the recent empirical contributions assessing the impacts of electricity provision.

Keywords: Electricity access, minigrids, household welfare, agriculture, Sub-Saharan Africa