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The Role of Political Economy in Energy Access: Public and Private Off-Grid Electrification in Tanzania

Ferrall, Isa; Heinemann, Georg; von Hirschhausen, Christian; Kammen, Daniel M.

FG Wirtschafts- und Infrastrukturpolitik (WIP)

Off-grid renewable energy sources are dramatically altering the energy landscape in countries with low energy access. While techno-economic perspectives are already widely discussed, the political economy is largely ignored, particularly regarding the institutions providing electricity. Two of many ways that the task of electrification can be framed are: (1) as the duty of the government to provide a basic service to its people, or (2) as a goods that can be purchased from private players in a market system. Electrification in our country of focus, Tanzania, has developed a promising off-grid market as an increasing number of private players have recently become active there. While grid extension is still a priority for the government, solar home systems, which are estimated to make up more than half of all new connections by 2030, get surprisingly less attention in terms of coordination, political support, and policy frameworks. This is despite the fact that the population is highly dispersed, making grid extension less suitable and more expensive than off-grid, decentralized systems. After an extensive literature review, our method applies a theory-embedded framework of institutional economics to the use of solar home systems for electrification in Tanzania and examines the realizations of the electricity provided. The framework defines key political economy criteria as drivers for energy access and evaluates their respective relevance. We then apply this framework to evaluate 20 selected projects, which have promoted solar home systems in rural off-grid areas in Tanzania since 2000. As a unique contribution to the literature, this research highlights the underappreciated influence of different institutional arrangements on the political economy landscape and on the electricity provided for rural electrification in sub-Saharan Africa.