We mapped and quantified the impact of CDC’s power investments in Uganda
CDC Group plc is the UK government’s development finance institution with investments around the globe.
In a study for CDC, we explored the pathways through which improvements in the availability, affordability, and reliability of electricity supply impact businesses and households. Specifically, our research evaluated whether more and better power helped create jobs and improve livelihoods in Uganda.
We employed a mix of macro and micro analysis to derive the private sector job creation effects of better, cheaper, and more reliable power. Our approach consisted of modelling these pathways based on available industry and macro-economic data, as well as data collected during an energy-specific survey of more than 100 companies in Uganda. We also analysed the broader development impact of power on livelihoods through household surveys in communities at different stages of electrification.
We estimated that the investments in power generation and distribution led to an increase in GDP of 2.6% and the creation of some 201,600 jobs. We also found that the causality between electrification and household income generation is not straightforward: areas with higher incomes tend to get electricity sooner than poorer ones and electrification only modestly increases incomes of non-poor households.
Therefore, we conclude in our study that in order to increase employment creation, power sector investments should primarily target increasing the productive use of (mini-)grid power in the private sector. Additionally, electricity access has numerous non-financial benefits for households, such as improved quality of education and healthcare. Therefore, rural electrification projects should target education and healthcare institutions.
Please click here for the full study.