Environment and Resources

Project: Productive Use of Electricity (PRODUSE)

Project Duration

03/2007 - 06/2013 (finalized)

Commissioned by

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ, former GTZ); World Bank

Project Team (RWI)

Dr. Gunther Bensch, Prof. Dr. Jörg Peters (Chief), Dr. Maximiliane Sievert, Prof. Dr. Colin Vance

Cooperation

ISSER Ghana; NORPLAN Uganda; IDEE Benin; iidev, Germany

Leader of Consortium

RWI

Summary

Access to modern energy is widely considered an important ingredient in the strategy towards alleviating poverty and achieving the Millennium Development Goals (MDG). In particular, it is expected that electrification removes bottlenecks for enterprise development and enables new potentials for income generation. At the same time, robust evidence for this hypothesis is hardly existent. In order to start filling this gap between practitioner’s perception and lacking robust evidence, GIZ and World Bank launched the Productive Use of Electricity (PRODUSE) study. In the case of three African countries – Benin, Ghana, and Uganda – the usage of electricity in micro-enterprises was examined and the effect of electricity usage on firm performance was assessed. For this purpose, between 200 and 400 micro-enterprises were surveyed in target regions of GIZ electrification interventions in the three countries. RWI designed the overall survey and evaluation methodology, developed the research tools for all countries and conducted the field work in Benin and Uganda. The electrification interventions had not been implemented yet at the time when the surveys were conducted. While the collected data also serves as a baseline for future ex-post evaluation, a cross-sectional ex-ante approach was applied. In order to immediately derive insights on impacts of productive electricity usage the yet non-electrified GIZ target region was surveyed and, in addition, a comparable, already electrified region. Econometric evaluation techniques were used to identify comparable firms from both regions in order to establish a proper counterfactual situation. Results of this research effort suggest that impacts of electricity access on micro-enterprises are modest only. Take-up rates of both grid connections and appliances are low. On the other hand, electricity availability seems to trigger creation of new and particularly promising firms. One important objective of PRODUSE was to make rigorous evaluation techniques accessible for practitioners. Therefore, RWI developed a hands-on guide for designing evaluation studies regarding the impacts of productive electricity usage. Complementary to the existing literature on evaluation methods, this guide familiarizes project managers with the concrete steps that have to be undertaken to plan and implement an evaluation.

Selected project related publications

Articles in Peer-reviewed Journals

2012

Bensch, G., J. Peters and C. M. Schmidt (2012), Impact Evaluation of Productive Use - An Implementation Guideline for Electrification Projects. Energy Policy 40 (1): 186-195.

2011

Neelsen, S. and J. Peters (2011), Electricity Usage in Micro-Enterprises – Evidence from Lake Victoria, Uganda. Energy for Sustainable Development 15 (1): 21-31.

Peters, J., C. Vance and M. Harsdorff (2011), Grid Extension in Rural Benin: Micro-Manufacturers and the Electrification Trap. World Development 39 (5): 773-783.

Discussion Papers

2011

Bensch, G., J. Peters and C. M. Schmidt (2011), Impact Evaluation of Productive Use – An Implementation Guideline for Electrification Projects. Ruhr Economic Papers #279. RWI, RUB. download

2010

Peters, J., C. Vance and M. Harsdorff (2010), Rural Electrification and Manufacturing Firm Performance in Benin – An Ex-Ante Impact Assessment. Ruhr Economic Papers #189. RWI. download

Contributions to Books

2013

Bensch, G., J. Peters and C. M. Schmidt (2013), Impact Monitoring and Evaluation of Productive Electricity Use – An Implementation Guide for Project Managers. In: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (ed.), Productive Use of Energy – PRODUSE - Measuring Impacts of Electrification on Small and Micro-Enterprises in Sub-Saharan Africa. Eschborn: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 119-144

Neelsen, S. and J. Peters (2013), Micro-Enterprise Electricity Usage in Two Export-Oriented Fishing Communities at Lake Victoria, Uganda. In: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (ed.), Productive Use of Energy – PRODUSE - Measuring Impacts of Electrification on Small and Micro-Enterprises in Sub-Saharan Africa. Eschborn: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 95-112

Peters, J., M. Sievert and C. Vance (2013), Firm Performance and Electricity Usage in Small Manufacturing and Service Firms in Ghana. In: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (ed.), Productive Use of Energy – PRODUSE - Measuring Impacts of Electrification on Small and Micro-Enterprises in Sub-Saharan Africa. Eschborn: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 75-94

Peters, J., C. Vance and M. Harsdorff (2013), Electrification and Firm Performance in Rural Benin: An Ex-Ante Impact Assessment. In: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (ed.), Productive Use of Energy – PRODUSE - Measuring Impacts of Electrification on Small and Micro-Enterprises in Sub-Saharan Africa. Eschborn: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. 51-74

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