Using Nigh -Time Light to Estimate the Impact of Mini-Grid Electrification Projects on Electric Power Consumption: Analytical Background and Case Study in Madagascar

Mini-grids are key for improving electricity access in developing countries’ rural areas, but there is a dearth of evidence of their impacts, due to data unavailability. We exploit the local infrastructure nature of mini-grids to define treated entities as the localities of installation. We mobilize remotely sensed nighttime light (NTL), commonly used as a correlate of electric power consumption (EPC). We use a randomized controlled trial to deal with usual confounding factors. However, the heterogeneity of the relationship between electricity consumption and emitted radiance may create a significant bias of estimation if street lighting is not taken into account. We propose a framework to measure and test this bias. We apply it to impact evaluation of a mini-grids’ project in Madagascar. We conclude to a positive impact of this project but the impact on EPC could be overestimated by one third if street lighting is not taken into account.