A Sky View Evaluation of Mini-Grid Projects on Rural Economic Development

This paper proposes a new approach for evaluating the impact of mini-grid electrification projects, based on nigh times light (NTL) data, obtained from satellite observations. The methodology is designed and tested using mini-grid projects documented in a common framework: the FERDI’s Collaborative Smart Mapping of Mini-grid Action. We compare for each project NTL data before and after the implementation. Our results suggest that our new methodology contribute to filling the gap of quantitative evaluation of mini-grid projects. We show that NTL observed at the village level detect in about half projects fast changes after treatment, illustrating growing energy consumption and progress toward SDG7 attributable to the mini-grid. Economists also consider such evolution as highly correlated with increased economic activity. We build a test of impact, which confirms the causal nature of observed effects, based on a comparison with controls, i.e. non-treated similar localities. Finally, we show that the absence of positive effects is statistically associated with shortcomings in business models and/or project governance, which is consistent with findings in the empirical literature on mini-grids and provides evidence-based policy recommendations.