Rwanda has seen significant growth in off-grid electrification projects to support rural communities lacking access to grid electricity. However, there is a need for methodological assessment to evaluate the efficiency of these systems and identify areas for improvement. This study employs a fixed effects model (FE) to estimate the efficiency gains of off-grid community systems. The empirical model is specified as: Y₈ₓ = eta₀ + eta₁X₈ₓ + uᵢ, where Y₈ₓ represents system performance, X₈ₓ includes variables such as investment costs and maintenance practices, and uᵢ accounts for unobserved heterogeneity across communities. The robustness of the findings is assessed through likelihood ratio tests. The panel data analysis reveals that a 10% increase in investment per capita leads to an approximately 5% improvement in system performance, indicating the importance of adequate funding and resource allocation for optimal efficiency. This study provides empirical evidence on how off-grid community systems can be improved by focusing on targeted investments and best practices. These insights are crucial for policy makers aiming to enhance sustainable rural electrification efforts. Policy recommendations include increased investment in infrastructure, training programmes for maintenance personnel, and fostering partnerships between communities and private sector providers to ensure long-term sustainability of off-grid systems.
Kayimba et al. (Fri,) studied this question.
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