Manuscript Title
Summary
This manuscript develops a framework to assess the cost-benefit of extending electricity access to unelectrified rural communities in developing countries. Within this framework the authors explore three financial mechanisms namely: direct subsidies, rental programs and microloans that can be used to promote the affordability of distributed rural electrification systems. These financial mechanisms are evaluated on the basis of their utility to a rural consumer against the cost or profit incurred by the providing agency or government. To motivate the relevance of the article, the authors begin by showing the conditions under which distributed electrification systems1 dominate grid extension in terms of the least cost option of electrification. This paper is an interesting and important contribution to literature, given the relevance of rural electrification on both national and international development agenda. The framework demonstrated in this paper can used to inform resolute policies to solve this problem. Over all the authors demonstrated a sound understanding of subject matter and appropriately execute of the aims of the paper.
Strength:
The paper adopts a novel and comprehensive approach to evaluating rural electrification programs from both the consumer and providing agency perspective. The merit of incorporating both agents (i.e. consumer and providing agency) in the framework is that it gives a more practical and resolute approach to evaluating and informing rural electrification programs.
Another key contribution of this paper is the application of sensitivity analysis to the parameters of the financial mechanisms, to tease out optimal decision points.
The framework proposed has a general applications; this framework can be used to support policies decision of other social services in developing countries such as water and transportation.
Weakness:
Generally the motivation of the paper was vague, the authors failed to adequately highlight the reasons why distributed electrification systems may be a better option than centralized systems. Instead of only demonstrating this through computation, it will best for the readership if the authors could incorporate some empirical evidence (for example Deichmann, Meisner, Murray, & Wheeler (2011)2) to support their computation. Secondly the authors fail to explicitly motivate why they incorporate the consumer’s utility in their model, both from a theoretical and empirical point of view.
The structure of the article is a bit incoherent, for the instance at the beginning paper the authors stated that as a basis for examining the financial
