Can energy poverty be eradicated by project aid? Evidence from African countries

Abstract

AbstractWhile the main task of electricity development in other countries of the world is to expand the production of electricity or to improve the way it is generated, the problems faced by sub‐Saharan Africa (SSA) countries are more immediate and urgent ‐ here less than half of the population has access to electricity. This study aims to examine whether aid projects can alleviate energy poverty. Since the assisted power facilities will affect neighbouring countries across borders, this study constructs a dynamic spatial Durbin model to take spatial spillover effects into account. The results of the spatial correlation test indicate that the spatial distribution of aid projects is random, which is an important finding that evenly distributed aid policies lead to disorderly aid. Further analysis shows that the mismatch effect of aid resources hinders the development of electricity in recipient countries. Urbanisation and technical assistance are the key factors to accelerate the development of electric power and improve the benefit of assistance. This paper suggests that aid policies should be implemented on a long‐term and stable basis, with a focus on those recipient countries that are highly urbanised to take advantage of their unique advantages.