Rural electrification in Zimbabwe reduces poverty by targeting income-generating activities

Mpako Maxwell; Prasad Gisela

Rural electrification in Zimbabwe reduces poverty by targeting income-generating activities

Working Paper

2007-04

Publisher

University of Cape Town

Department

Energy Research Centre

Faculty

Faculty of Engineering and the Built Environment

Abstract

National electrification programmes are given priority in many developing countries and the level of electrification is generally seen as one of the key indicators of development. Utilities find rural electrification programmes a challenge because the returns on the investment made in grid extension are minimal given the usually low levels of power consumption in rural areas. An approach, adopted in Zimbabwe that promises to address this problem is to target income-generating activities, mainly the small and medium scale enterprises (SMMEs) in the areas where the electricity grid is extended. This will have the benefits of potentially increasing the return on the utility’s investment by also stimulating small-scale commercial and industrial activities in the areas reached by the grid. It is however important to understand the SMMEs and their needs in order to tailor any support appropriately. When extending the grid to the growth points the Rural Electrification Agency may also provide loans and deliver to site electrical machinery like grinding mills, irrigation equipment and welding machines that entrepreneurs may order. This paper discusses the findings of recent case studies among small enterprise beneficiaries of rural electrification in the arid southwest of Zimbabwe and highlights key lessons learnt.