Agricultural Windfalls and Electrification

Andrew L. Dabalen, Justice Tei Mensah, Aimable Nsabimana and Alexandre Nshunguyinka

No 11019, Policy Research Working Paper Series from The World Bank

Abstract: This paper studies how windfalls from agriculture influence demand for electrification in a developing country. Leveraging two decades of administrative data on the universe of electricity grid customers in Rwanda, and plausibly exogenous variations in international coffee prices, we document two key findings: (I) Historical coffee price booms explain about 4% of the increase in electrification rates in Rwanda. (II) Coffee price shocks are also associated with an increase in electricity consumption by connected households. Relaxing liquidity constraints associated with upfront payment of connection fees and increased demand for electrical appliances are likely mechanisms.

Date: 2025-01-07
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