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Linking electrification and productive use

Access to electricity has been shown to provide myriad benefits, in terms of access to lighting, access to information, improved well-being and increased flexibility over people’s time. Electrification’s impact on people’s incomes, however, is uniquely important: as a means to scale energy access and address poverty. This report by Oxfam considers the evidence looking at the impact of electrification on increased productivity and income.

Given the extent to which access to electricity is central to economic productivity in industrialized economies one might assume that providing poor and remote populations with access to electricity would galvanize the local economy, thereby making electrification a central tool for fighting poverty. However the evidence on this linkage is more complex.

This report looks at the evidence examining the impacts of electrification on income and productivity. It explores the historic experience of industrialized nations (in particular the US), and reviews a number of individual studies. The work further explores the findings of other reviews of the literature and considers works seeking to understand the relative impacts of different types of infrastructure on poverty alleviation, with a focus on understanding the role played by electrification.

The report holds important lessons for efforts at electrification, pointing to the need for planners to support their projects with complimentary services and be extremely cautious when estimating impacts on productivity and income. Finally the report calls for more research to aid understanding of the conditions under which electrifications impacts are likely to be truly catalytic.

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