Asian Development Bank's Assistance for Rural Electrification in Bhutan - Does Electrification Improve the Quality of Rural Life?

Evaluation Document | 31 August 2010

This study assesses the performance of two rural electrification projects funded by ADB in Bhutan. It also identifies key lessons and issues, and offers recommendations to enhance development effectiveness of rural electrification.

This study assesses the impact of two ADB-funded rural electrification projects in Bhutan: the Sustainable Rural Electrification Project and the Rural Electrification and Network Expansion. Among the study's objectives was to evaluate the impact of both projects on quality of life in terms of economic, social, and environmental parameters in electrified households. Some 1,276 electrified and 822 unelectrified households were interviewed for the study.

Its results suggest that economic benefits, in terms of percentage increases in income, were higher in electrified households than unelectrified ones; and to a greater extent from nonfarm activities and to a lesser extent from farming. Children in the electrified households completed more years of schooling. Electrification also markedly reduced smoke-induced health problems.

The study found that while the use of electricity for income-generating activities in rural Bhutan has so far been limited, the potential to increase household income is high.

It recommends improving the analysis and design of low-income housing projects for better targeting and greater welfare impacts; and increasing the collection and maintenance of baseline data on selected projects amenable for impact evaluation.