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Infrastructure, rural electrification and development

Recent interest in rural electrification has emphasised the importance of linking its development with productive uses for energy and poverty reduction. This has been viewed as necessary to increase the pace of rural electrification and reduce its concentration on a relatively small number of developing countries. Despite this emphasis, progress in electrifying remote rural areas has been slow. In part this has been attributed to the emphasis on cost recovery and a reliance on the private sector to deliver electricity widely. This paper reviews the literature on the role and relation of infrastructure, particularly infrastructure in rural areas, to economic growth and development. It reviews the focus on poverty reduction by the major international development agencies and examines the arguments for increasing rural incomes. It critically reviews the economic and social issues underlying the development of rural electrification, drawing on the experience with both grid and off-grid applications in developing countries and assesses the impact of electrification on the ability to generate income in rural areas. Conclusions are drawn in relation to the beneficiaries of rural electrification, the constraints that are faced in stimulating economic activity that will contribute to making rural electrification more feasible and affordable and to the importance of complementary services and appropriate institutions to support rural electrification.