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Patrik Söderholm, professor of economics at Luleå University of Technology.

African rural electrification without power grid

Published: 10 December 2012

The rural Africa lack electricity, which impedes economic development. But nobody wants to invest in the construction of power grid as the demand for electricity is missing. This creates a vicious circle that researchers at Luleå University of Technology would like to break.

– We are from an economic perspective going to find out what opportunities are available to electrify rural areas – without expanding the electricity grid – and the demand that could be created, says Patrik Söderholm, professor of economics at Luleå University of Technology.

The project involves field studies in rural Africa and to dig hard and deep to find solutions to the poverty issue.

– We will work with researchers in Tanzania and Mozambique to understand the context and the solutions that can work right there. Therefore, the research is very realistic and applied.

Unconventional solutions with renewable energy

The focus is on renewable energy sources and to take advantage of the rich natural resources that exist in most sub-Saharan countries.

– By using the sun, wind and water is harmful use of energy avoided, such as forests that are cut down and burned, says Patrik Söderholm.

Research in economics at Luleå University of Technology, focuses on just the energy, environmental and natural resource issues, but the solutions in this project may be unconventional.

– Previously we have mostly worked with problems in developed countries and studied European conditions. In the industrialized world, there are clear rules, functioning institutions and access to finance. Now we need to examine how this works from the perspective of a developing country, says Patrik Söderholm

Microgeneration where citizens produce their own electricity, wind power cooperatives with the local community as unitholders and microloans could be possible solutions for electrification and could contribute to an economic growth, where electricity is demanded.

Funding issues in focus for economists

The interdisciplinary project with three partners is led by professor Sverker Molander at Chalmers. Engineers at Chalmers studies the technical solutions, while University of Gothenburg does research on the political science aspects.

– Our mission at Luleå University of Technology is to study how the technical solutions can be realized from an economic perspective.

A major question is how development policies can be designed to support electrification. According to Patrik Söderholm is Norad, the Norwegian equivalent of Sida, very interested in the project.

– The results can be used to draw parallels to many developing countries that can hopefully get out of the poverty trap through this, concludes Patrik Söderholm.


Formas funds 6.1 million SEK, where LTU's part consists of 1.9 million SEK. The project runs from 2013 to 2015.