Work in progress
Abstract
Expanding electricity access in low-income countries is a critical development goal that policymakers invest heavily towards. Most recently, the World Bank has undertaken Mission 300, an initiative to connect 300 million people to electricity in the region by 2030. However, studies analyzing the impacts of electrification on development have produced mixed results. This paper seeks to understand how the design of electricity access policies affect electricity takeup and consumption. We use rich household-level monthly electricity billing data in Rwanda to analyze the impacts of two key policies aimed at improving electricity access and consumption. First, the electricity tariff structure that consumers faced changed from a flat rate to a block structure with pricing tied to tiers of electricity consumption. Low-income households faced a sharp drop in electricity prices, from 182 Rwandan Francs (RwF) per kilowatt hour (kwh) to 89 RwF per kwh. Ten months later, a second policy removed upfront payment of a large one-time fee to get an electricity connection and provided consumers with the option of making the payments in installments over time. We combine the household-level utility billing data with Multi-tier framework (MTF) surveys to analyze these policies to understand how they affect electricity take up and consumption over time. We find that consumers consume very little for years after connection despite lower prices and easier connection. We estimate demand eleasticities across different sets of consumers and identify the drivers leading to continuously low consumption of electricity.
Citation
Awonon, Josue, Siddhi Doshi, Justice Tei Mensah, Aimable Nsabimana. 2025. “What do Electricity Access Policies Achieve? Evidence from Rwanda.” Working Paper.