CLOSING THE CIRCUIT

The document highlights that rural electrification often fails when supply is expanded without addressing the barriers to end-use demand, such as high equipment costs and lack of financing. It provides evidence from historical US programs and modern sub-Saharan African minigrids to show that stimulating productive use improves system capacity utilization and financial viability. The authors recommend that development partners implement financing mechanisms, support the private sector in equipment sales, and update national policies to include end-use targets.

• Electrification programs in developing nations disproportionately prioritize supply over demand; for instance, World Bank energy access investments from 2000 to 2008 allocated nearly half of funds to supply expansion but only 0.7% to productive use.
• Stimulating end-use demand is critical for the financial sustainability of electricity systems because it increases capacity utilization, which lowers per-unit energy costs, improves cost recovery, and reduces the need for subsidies.
• Failure to stimulate demand can lead to a 'downward spiral' where low capacity utilization forces developers to raise tariffs to recover costs, which in turn causes more customers to disconnect.
• Significant barriers prevent rural end users in sub-Saharan Africa from adopting electricity-powered equipment, including high upfront costs (irrigation pumps can cost 13% to over 300% of average annual farming income), lack of credit histories, and high micro-finance interest rates (28%–35% from 2004 to 2011).
• High electricity tariffs in sub-Saharan Africa further discourage productive use; minigrid costs can exceed $0.50/kWh, and the threshold for unaffordability is generally 6% of a household's income.
• The use of energy-efficient and 'soft-start' motors can lower system costs by reducing peak load and allowing for smaller, less expensive installed capacities.
• To ensure sustainable electrification, national strategies should move beyond measuring success by the number of connections or megawatts installed and instead include indicators such as disaggregated consumption per capita and service levels.

APA

McCall, M., & Santana, S. (2018). CLOSING THE CIRCUIT. RMI. https://rmi.org/app/uploads/2018/10/SEED-Demand-Stimulation-Report.pdf

Chicago

McCall, Margaret, and Scarlett Santana. CLOSING THE CIRCUIT. RMI, 2018. https://rmi.org/app/uploads/2018/10/SEED-Demand-Stimulation-Report.pdf.

Wikipedia

{{cite report |last1=McCall |first1=Margaret |last2=Santana |first2=Scarlett |title=CLOSING THE CIRCUIT |publisher=RMI |date=October 2018 |url=https://rmi.org/app/uploads/2018/10/SEED-Demand-Stimulation-Report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mccall2018closing, author = {McCall, Margaret and Santana, Scarlett}, title = {{CLOSING THE CIRCUIT}}, institution = {RMI}, year = {2018}, month = oct, url = {https://rmi.org/app/uploads/2018/10/SEED-Demand-Stimulation-Report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }