Access to electricity is a prerequisite for economic and social development. It has been noted already that 1.6 billion people are still not connected to electricity. New connections are made by grid extension (for urban, peri-urban and rural households) or through the implementation of decentralised power systems using local resources (hydro, solar, biomass, wind) or diesel generators. In the IEA's reference scenario, if no new policies are put in place, there will still be 1.4 billion people not connected in 2030. The rate of electrification is still very low in poor countries and progress is slow. In a general review of rural electrification programmes, theWorld Bank considers that, generally speaking, off-grid systems are more expensive and bring fewer benefits than grid connections. Photovoltaic cells, for example, are often limited in capacity and offer fewer hours of lighting. In addition, decentralised power systems often face operational and maintenance problems due to a lack of skilled human resources.
However, the combination of high oil prices with progress in cost and efficiency of renewable energy systems (batteries) could enhance the attractiveness of decentralised systems in areas difficult to reach with the grid. Large programmes of decentralised electrification, through solar systems and bio-digesters, have been developed successfully in Bangladesh. The ‘willingness to pay' for consuming electricity is generally higher than the long-term marginal cost of supply but there is the problem of payments of connecting charges that have sometimes to be extended over a long period of time. This means that, in many rural electrification programmes, access to electricity is not brought to the very poor. Access to electricity has major impacts on daily life. Benefits concern comfort, health, education and local production.
Comfort: In poor rural areas, when a village is connected, the major primary uses of electricity are lighting, television and mobile phones. Electric lighting increases the time available for education or productive activities. More light means that people may work longer, generating higher income. TV brings information about the global village. After lighting, TV, radio and mobile phones, there is a progressive transition towards higher standards of living if there is economic growth: the acquisition of refrigerators (which provide better food conservation), fans, irons, small appliances and air conditioning.
Health: Kerosene is the main fuel for lighting when there is no electricity. Kerosene is expensive (even when subsidised), polluting and inefficient. It is, with wood fuel, the main element responsible for indoor pollution. Moving from kerosene to electricity significantly cuts the cost of lighting, with much greater luminosity and much less pollution. Rural electrification also transforms the working conditions of local clinics and health centres which can run for longer periods and use more equipment. However, the cold chain for vaccines and medicines may remain fragile because of the risk of power supply disruptions that are very frequent in developing countries. Electricity may also facilitate access to clean water (pumping).
Education: Various surveys show that children in electrified households have higher education levels than those without electricity. They are able to spend more time studying (at home and at school), they have access to information (especially through the internet) and their village becomes more attractive for teachers (and doctors).
Production: Electricity enlarges business opportunities and extends working hours. Electricity may be used for increasing the productivity of agriculture (pumping and irrigation), and of industry and services. The most important potential transformation is probably for small businesses, including home enterprises. According to the World Bank, for example, women in Ghana prepare snacks to be sold to the people who come to their houses to watch TV in the evenings. In South Africa, households sell cold drinks and rent out refrigerator space. Connection to electricity opens the door for the use of information and communication technologies (ICTs).
A number of research studies have been undertaken to measure the impact of ICTs on economic development. Quantification is difficult because case studies are scattered but there is general agreement that ICTs play, and will increasingly play, an important role in economic and social development and poverty reduction. When electricity is available, the two major applications of ICTs are mobile phones and the internet. However, access to the internet depends on the level of education. The main benefits of ICTs in developing countries are access to information, access to markets and access to credit. These factors may impact local business and the range of opportunities for creating new businesses.
Access to information: Mobile phones and the internet considerably improve access to information. It may concern agricultural and irrigation techniques, weather forecasting or the appropriate use of fertiliser. ICTs provide great potential for education, learning and training. New technologies may cheaply enhance the educational system when appropriate human resources are available. In sub-Saharan Africa, twenty-two countries are currently linked to the ‘Virtual African University'. Students interact directly with faculty members and have access to an online library which also provides courses in computer science, economics and languages. For health, access to information is vital for rural hospitals and health centres. ‘Telemedicine' is developing by the intensive use of ICTs.
Access to markets: Mobile phones and the internet facilitate contact with markets. In Mauritania, fishermen follow the prices on the fish market and know when they have to stop fishing. The internet also offers the possibility of expanding markets, broadening the range of customers and facilitating customs procedures, transport and logistics. Local companies may have access to global markets.
Access to credit: ICTs facilitate the access to microcredit and microfinance for business creation. Microcredit aims at lending to the poor, who have no access to the banking system, small amounts of money ($30- $100), with no guarantees, to help them create an economic activity. It was introduced in Bangladesh by Mohammad Yunus on the principle that ‘The poor always pay back'. It is now promoted in many countries by the Grameen Trust. From the Grameen model a number of new, more efficient, business models have been launched in many poor countries. One may also mention PlaNet Finance created by Jacques Attali which ‘aims to bring the full potential of the internet for development of microcredit' and Kiva.org, a microcredit institution set up by students from Stanford. The International Labour Organization notes that the spread of ICTs in developing countries creates millions of jobs of many different kinds.
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