The economics of rural electrification projects

Abstract This paper focuses on the economics of rural electrification and project selection. The broad criteria for preliminary screening of RE projects are described in relation to national policy objectives. The economic justification is the key step in the project processing cycle, and depends on the present discounted value of benefits exceeding costs. A comprehensive analytical model for identifying benefits is presented and the practical problems of evaluating them are described. Finally, the paper contains the detailed economic evaluation of an RE project in Malaysia.