Electricity access in Sierra Leone

Background, challenges, and context

Universal access to electricity could spark sustained economic growth in developing countries, through the use of time-saving technologies and by opening up new markets.

In Sierra Leone, just 5% of the rural population has access to electricity. Close to 100 rural villages have recently been provided with electricity connections through the installation of solar mini grids. They were constructed via the Rural Renewable Energy Project (RREP), implemented by the Government of Sierra Leone in collaboration with the United Nations Office for Project Services (UNOPS) and funded by the FCDO.

However, the development success of electrification critically depends on whether households are able to put increased access to energy to productive use. Most people connected to the mini grids do not adopt electric assets that can increase their productivity and generate economic welfare. A core constraint in the uptake of productivity-enhancing technologies for many households is the lack of access to credit.

Research overview and objectives

This research looked at the economic and social impact of access to mini grid electricity under the RREP programme. This was carried out through surveys undertaken in 2019 and 2021. The original intention of the EEG project was to study a small number of communities, but the opportunity arose to combine the EEG project with an impact evaluation of RREP, and, as a result, the final research project was able to leverage the evaluation and combine donor funding – enabling the team to study a much larger population than would have otherwise been possible.

The study further examined one of the barriers to productive use – the role of credit and subsidies as policy instruments in the adoption of productivity-enhancing technologies. To test whether the low adoption of welfare-improving electric appliances is due to credit constraints, the team conducted a field experiment where liquidity constraints were partially lifted in recently electrified locations.

The electric appliance chosen was mobile smart phones. They are considered to be welfare-improving appliances; increased access to smart phones has shown promising impacts on economic activity (through, for example, increased financial inclusion because of access to mobile money and banking, and the use of phone calls and text messaging to spread information).

Research methodology

To assess the economic and social impact of access to mini grid electricity, data was collected from a range of baseline and follow-up phone surveys, carried out in 2019 and 2021, respectively.

A representative sample of households in communities where mini grids had been installed was compared with a representative sample of households in statistically similar communities where no mini grids were installed. In total, 6,010 households across 14 of Sierra Leone’s 16 districts (194 communities) were interviewed to understand how access to electricity had impacted their livelihoods. The team also investigated the quality of households’ access to renewable energy and households’ transition to cleaner energy.

The team also carried out interviews with 521 different schools to understand the current electrification status of schools, and representatives from 198 health clinics across 14 districts to understand how access to electricity had impacted clinics.

Meanwhile, to explore the impact of credit/subsidies on the take up of productive use appliances, the team used a BDM (Becker-Degroot-Marschak) experiment (one of the most widespread incentive-compatible procedures used to measure willingness-to-pay). The team first elicited participants’ willingness-to-pay for mobile smart phones. Participants were then offered the opportunity to buy a smart phone at either a high or low subsidised price (to overcome immediate credit constraints) as well as either a short- or longer-term repayment plan (to overcome inter-temporal credit constraints). A total of 445 respondents from 10 communities where mini grids had been built were selected to take part in the experiment, and 435 completed all phases of the study.

Research results, key messages, and recommendations

Access to mini grid electricity – households

The RREP project has been successful in increasing access to cleaner (non-fossil fuel) energy in rural communities.
Respondents in communities with access to the mini grids have changed their energy use: households are less likely to use diesel generators for lighting. Connected households are also less likely to cook with charcoal and spend less money on fossil fuels overall.
The assets most commonly powered by the mini grids were light bulbs, phones, and radios.
Households were 43 percentage points more likely to have light through the mini grid.
While households have started benefitting from access to cleaner energy – moving up the so called ‘energy ladder’ – it will take time for this transition to have a significant impact on the environment and livelihoods, and the use of clean energy for cooking and lighting, as the observed changes are small. More needs to be done to ensure transformative impacts.
The number of households connected to mini grids has been increasing over time. The connection rates were high: 65% of respondents in communities with mini grids in the first phase of the project were connected. 35% of households in second phase communities were connected. This take-up rate is encouraging.
Usage is however low: daily average residential electricity consumption is just 0.28 kWh. For commercial connections, average consumption is just 1.10 kWh per day.
Most mini grid connected respondents strongly agreed (48%) or somewhat agreed (24%) that the mini grid provided reliable electricity.
Less than 1% of respondents reported disconnecting from the mini grid, indicating a high overall level of satisfaction.
Compared to households that are not connected to the mini grids in the same communities, connected households were more likely to be larger, have a male household head, be self-employed, own more electrical appliances, and be more likely to spend more money on food and skip fewer meals.

Access to mini grid electricity – employment and income

There were no substantial changes in labour and income due to RREP. Given the short timeline and the disruptions to business activities across all communities caused by the COVID-19 pandemic, it is not surprising that few effects were observed at this stage. Neither were there differences between cash and food crops planted, harvested, and sold.
Mini grids are more likely to be transformative when rural entrepreneurs have increased access to productivity-enhancing technologies that require electricity. To increase agricultural value-add and productivity, a combination of both electricity access and productive inputs are likely required.
The results on employment and income should be considered intermediaries, as the time between mini grids becoming operational and the survey was limited in some communities (or electricity had not been provided yet).

Access to mini grid electricity – schools

Most schools in rural Sierra Leone do not have access to electricity. This lack of access limits the ability of schools to teach night shifts, of students to study at night, and for instruction with devices such as computers.
Electricity access has successfully been provided to some of the eligible RREP schools. However, it will require time and investment before there is greater access to electricity in the schools, and for the schools to have the appliances needed to productively use the electricity.

Access to mini grid electricity – health clinics

While most health clinics have some access to electricity, the majority lack reliable energy access throughout the day. This constrains medical service delivery as lighting, sterilisation, and refrigeration capacities are limited.
Half the clinics in the study recently received free access to off-grid solar electricity through the RREP project.
The RREP project has been successful in increasing access to energy for rural health clinics. However, more must be done to improve the reliability and availability of electricity.

The study resulted in policy recommendations for the quality of access to renewable energy; household transition to cleaner energy; improving access to renewable energy; rural electrification and education; and electricity access at health clinics. The key recommendations are:

Increase access to productive electrified assets. While the team observed high rates of connection to mini grids, self-employed individuals are not more likely to use electricity in their businesses. The team recommends pursuing a deeper understanding of the barriers to the adoption of productive electrified assets, and design interventions that could help overcome them.
Promote productive use of electricity at community health clinics and schools. While these facilities have increased access to electricity, complementary investments are however necessary to fully reap the benefits of electrification.
Limited capacity is a key binding constraint to productive use of energy systems, especially constraining use during ‘peak hours’. In addition, many mini grids are too small to carry more heavy appliances, limiting the potential for energy to be transformative.
Improve communication between key stakeholders to ensure there are no misconceptions regarding the scope and goals of the RREP project, and provide transparency over tariff structures and mini grid governance.

Willingness-to-pay for mobile smart phones

Neither credit plan changed average willingness-to-pay for phones (that is to say, it did not make people willing to pay more for a phone). But access to credit and subsidy did increase uptake of the appliance (the phone).
Credit alone impacts uptake by 16-17% through relaxed liquidity constraints.
Relaxing liquidity constraints through credit plans and price subsidies does significantly increase later mobile phone uptake.
When the higher subsidy level is combined with the long-term repayment credit scheme, the impact on uptake has a much larger effect than all the other combinations possible.
Taken together, the results signal that combining credit products with subsidies can increase the cost-effectiveness of the subsidy, stimulating the uptake of a new technology that is welfare improving.