Energy Access in Africa: Promotion of Rural Businesses Effective, but Energy-Poor Population Groups Neglected

Bonn, 31.10.2024 – 600 million Africans have no access to electricity in their households. The German Federal Ministry for Economic Cooperation and Development (BMZ) is therefore promoting the expansion of energy access in rural Africa. The German Institute for Development Evaluation (DEval) has analysed the measures financed by the BMZ. The results show that the needs of the most energy-poor population groups, which include women and girls in particular, are not being sufficiently taken into account. At the same time, the promotion of income-generating use of renewable energies by small businesses is proving effective and should therefore be expanded.

Energy Access in Rural Africa

43 percent of all Africans have no access to electricity in their households, and almost all of these live in sub-Saharan Africa. This obstacle to development particularly affects the poorest population groups, as well as women and girls, since household activities are traditionally their responsibility. But half of the hospitals and health centres in sub-Saharan Africa also have no reliable access to electricity – with the result that medicines cannot be safely stored and medical equipment cannot be operated reliably. Emergencies sometimes have to be dealt with using the light from mobile phones or torches. Without access to energy, it is also extremely difficult for small businesses to operate successfully.

With the 2030 Agenda and its Sustainable Development Goal 7 (SDG 7), the United Nations – and its member, Germany – have committed to achieving access to affordable, modern and reliable energy for all by 2030. It is therefore an objective of German development cooperation to reduce energy poverty in partner countries, and to provide private households, social institutions and companies with a sustainable supply of affordable and reliable energy.

Costs Too High for Energy-Poorest Population Groups

There are various approaches in development cooperation aimed at promoting access to energy. While expanding the central electricity grid is the main option in urban regions, this approach is rarely viable in rural areas where distances to the grid are long and energy consumption is low. In rural areas, photovoltaic systems or solar-powered appliances such as pumps and mills are therefore more likely to be used. While the expansion of the central grid is usually financed by public funds, the users of solar-powered devices are expected to largely finance them themselves.

The evaluation shows that such market-based approaches are hardly suitable for creating energy access for all by 2030. Despite falling prices for off-grid approaches, the acquisition costs are often still too high, especially for the energy-poorest population groups. The results also show that the end users' ability to pay and their need for support are often not taken into account when measures are designed. Dr Mascha Rauschenbach, head of the evaluation team, comments: "Development cooperation should gear the expansion of initial energy access more towards the needs and financial capacities of women and girls and other energy-poor population groups and households. In this way, vulnerable groups can be better taken into account, and a gender-equitable development policy can be implemented."

Greater Focus on Promoting Income-Generating Energy Use

Access to energy alone is not enough to drive economic development in rural Africa. Approaches that in addition promote the use of energy for economic activities, for example via solar-powered grain mills or irrigation pumps, are more promising. As the evaluation shows, their use has enabled many rural businesses in Benin, Senegal and Uganda to reduce their energy costs and increase their yields and revenues at the same time. However, at 11.6 percent, these approaches only make up a small proportion of the BMZ portfolio for energy access in Africa. This means that the priorities of German development cooperation in the energy sector are of little relevance to economic development in rural Africa. DEval therefore recommends the targeted promotion and further expansion of measures for the productive use of energy.

Underlying Data

In this evaluation, a portfolio analysis was conducted to assess the measures for energy access in Africa that are financed from BMZ funds and implemented by the KfW Development Bank and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. In addition, a literature review was compiled and primary data were collected, and quasi-experimental control-group comparisons were carried out in Benin, Uganda and Senegal – three BMZ partner countries with very different electrification rates. This included interviews with German development-cooperation actors and partner governments as well as quantitative surveys and focus-group discussions with the target groups – i.e. the rural population and micro, small and medium-sized enterprises in these regions.  

The full report "Access to (Green) Energy in Rural Africa" is available on the DEval website.