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While the interest of policy makers in the nexus between electrification, productive electricity usage and development impacts has been increasing steadily over the last decade, the lack of robust evidence on causal effects of electrification is striking. This joint GIZ-ESMAP study: Productive Use of Energy (PRODUSE) – Measuring Impacts of Electrification on Small and Micro-Enterprises in Sub-Saharan Africa sets out to improve the understanding of this issue.

PRODUSE pursued two main objectives: (a) gaining insights on the interaction between electrification and productive electricity usage by examining the impact of electrification on micro-enterprises and (b) improving the available toolkit for the impact evaluation of electrification programs. The report shows that proper usage of statistical techniques is required for deriving solid findings on these impacts and has demonstrated that methodological rigour is possible even if available project evaluation budgets are small.

The study confirms that differences between firms that get connected to electricity and those that do not get connected are substantial.  While service firms tend to get connected to the grid, take-up rates in the manufacturing sector of rural areas were low in the countries that have been studied. Connected firms in rural areas in both the manufacturing and the service sectors use electricity mostly for lighting and phone charging. Some rural manufacturing firms also use electric appliances if it is essential for their production process (such as welders). In general, however, take-up of electric appliances remains modest. In the service sector more appliances are used, mostly refrigerators and entertainment devices.