JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS CASE STUDY Job Creation Potential of the Clean Energy Transition JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 1 JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS CASE STUDY Job Creation Potential of the Clean Energy Transition ABOUT ESMAP The Energy Sector Management Assistance Program (ESMAP) is a partnership between the World Bank and over 20 partners to help low- and middle-income countries reduce poverty and boost growth through sus- tainable energy solutions. ESMAP’s analytical and advisory services are fully integrated within the World Bank’s country financing and policy dialogue in the energy sector. Through the World Bank, ESMAP works to accelerate the energy transition required to achieve Sustainable Development Goal 7 (SDG7), which ensures access to affordable, reliable, sustainable, and modern energy for all. It helps shape World Bank strategies and programs to achieve the World Bank’s Climate Change Action Plan targets. Learn more at: https://www.esmap.org. © November 2023 | International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the World Bank, with contributions given by the staff and consultants listed in the acknowledgments. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http:// creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Energy Sector Management Assistance Program (ESMAP). 2023. Jobs Generated by the Rwanda Development Policy Operations: Job Creation Potential of the Clean Energy Transition. ESMAP Case Study. Washington, DC: The World Bank. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-Party Content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images. All queries on rights and licenses should be addressed to World Bank Publications, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; e-mail: pubrights@worldbank.org. Production Credits— Designer | Circle Graphics, Inc. Cover Image | © Oliver Knight/World Bank Photos | p. x, p. 10, p. 28, p. 36 © Sarah Farhat/World Bank, p. 4 © A’Melody Lee/World Bank, p. 14 © Oliver Knight/World Bank All images remain the sole property of their source and may not be used for any purpose without written permission from the source. Contents Acknowledgments v About this Report vi Acronyms vii Key Findings viii 1. Introduction 1 2. Summary of Relevant Energy Sector Interventions 5 3. Objectives and Overall Methodology 11 4. Results 15 5. Discussion 29 6. Conclusion 37 References 43 Appendix A. Supporting Tables 46  xploring Electricity as a Constraint for Enterprises Engaged in Appendix B. E Accommodation and Food Services Activities 53 JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS iii List of Tables and Figures List of Tables Table 1. Overview of Key Informant Interviews 12 Table 2. Evolution of Electricity Tariffs, 1994–2020 18 Table 3. Key Labor Force Indicators, 2017 and 2020 19 Table 4. Occupations of Employed Population by Area, 2017 and 2020 20 Table 5. Employed Population by Branch of Economic Activity, 2020 Versus 2017 21 Table 6. Gross Domestic Product by Sector (in RF, Billions at Constant 2017 Prices) 23 Table 7. Distribution and Change of Establishments by Institutional Sector (Number and %) 24  hange in the Number of Private Establishments and Business-Oriented Table 8. C Mixed Establishments by Economic Activity, 2014–20 26 Table A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators 46 Table A.2 Evolution of the Electricity Tariff Regime, 1994–2020 50 Table A.3 Disaggregation of Employed Population by Branch Of Economic Activity, 2020 Versus 2017 52 List of Figures Figure 1. Theory of Change for the DPO Series 7 Figure 2. Evolution of Installed Capacity (MW) 15 Figure 3. Evolution of Electricity Access (% of Population) 16 Figure 4. Evolution of Annual Number and Duration of Outages Between 2017 and 2021 17 Figure 5. Selected “Biggest Obstacle” for Rwandan Enterprises 30 Figure 6. Electricity-Related Challenges, 2006, 2011, and 2019 31 Figure 7. Ranking of Factors by the Extent of Their Impact on Formal Businesses 32 Figure 8. Impact of Electricity Availability on Formal Enterprises (%) 32 Figure 9. Job Creation Patterns in the Private Sector, 2006, 2011, and 2019 34 Figure 10. Revised Theory of Change for the DPO Series (to Account for Employment Impacts) 40 iv  ONTENTS C Acknowledgments This work was made possible by the Energy Sector Management Assistance Program (ESMAP) with financial support from the Royal Ministry of Foreign Affairs of Denmark. ESMAP is a partnership between the World Bank and 19 donors to help low- and middle-income countries reduce poverty and boost growth through sustainable energy solutions. The report was prepared by a team coordinated by Zuzana Dobrotková (Senior Energy Specialist) and comprising of Sheoli Pargal (Lead Energy Economist), Anna Aghababyan (Senior Operations Officer) and Anders Pedersen (Senior Energy Specialist). The work was initiated under the guidance of Rohit Khanna (Practice Manager, ESMAP) and completed under Gabriela Elizondo Azuela (Practice Manager, ESMAP), with overall strategic direction provided by Demetrios Papathanasiou (Global Director, Energy and Extractives Global Practice). A team from the consulting company Mathematica, consisting of Faraz Usmani, Duncan Chaplin, Patricia Costa, Sarah Leser, and Sara Bryk, collected background material and conducted upstream research for this case study. The team acknowledges the important inputs, insights and assistance received from Yadviga Semikolenova (Practice Manager), Joern Huenteler (Senior Energy Specialist), Norah Kipwola (Senior Energy Specialist), and Arun Singh (Energy Specialist) and World Bank consultants Stephanie Pinnington, Nicolas Fichaux and Kavita Rai. Editor: Fayre Makeig. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS v About this Report This report presents the findings and conclusions of a case study undertaken under a program of analytical work that investigates the impacts of the global transition to clean energy on the quantity and quality of jobs in low- and middle-income countries. Under the program, entitled “Estimating the Job Creation Potential of the Clean Energy Transition,” the World Bank’s Energy Sector Management Assistance Program (ESMAP) undertook multiple streams of analysis: • A review of the literature and commonly used methodologies of investigation • Modeling of economywide job impacts of policies supporting the clean energy transition in selected countries in Sub-Saharan Africa • Case studies of the effects on employment of selected World Bank clean energy projects • Deep dives into the impact on jobs of closure of coal-fired power plants; of productive uses of electricity associated with mini grids in Nigeria; and of the Rusumo Falls Hydropower Project. Building on the above-mentioned steams of analysis, the program has also produced a high- level report summarizing its findings and conclusions “Jobs for a Livable Planet: Job Creation Potential of the Clean Energy Transition” and a discussion paper to support project design “Tracking Jobs in Projects Focused on Clean Energy and Productive Uses of Electricity”, providing strategies for tracking and enhancing job creation that can be used in the clean energy projects. The reports developed under this program together aim to support low- and middle-income countries in reaping greater socioeconomic benefits from the energy transition by supporting them in increasing the number and quality of local jobs generated while implementing clean energy projects. Realizing the benefits of the jobs created by clean energy interventions will depend on effective planning and preparation in the early stages of projects and sustained support during their implementation. The reports target multiple audiences, from policy makers to development practitioners and academics. They also aim to familiarize energy specialists with the effects of energy projects on jobs and give them tools that enable them to take account of—and, where possible, maximize—the socioeconomic benefits of the clean energy transition. The reports can be found at https://www.esmap.org/publications. vi  ABOUT THIS REPORT Acronyms DPO Development Policy Operation EDPRS-II Second Economic Development and Poverty Reduction EC Establishment Census EUCL Energy Utility Corporation Limited GDP gross domestic product GoR Government of Rwanda LFS Labor Force Survey MW megawatt REG Rwanda Energy Group WBES World Bank Enterprise Survey All currency is in United States dollars (US$, USD), unless otherwise indicated. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS vii Key Findings The World Bank supported the Government of Rwanda in institutionalizing least-cost principles for power-sector expansion through a series of three consecutive annual Development Policy Operations (DPOs) between 2017/18 and 2019/20. The objective was to enable fiscally sustainable expansion of electricity services in Rwanda while improving operational efficiency, affordability, and accountability. The case study found that while there was some association between electricity reforms and job creation in Rwanda, the link was not straightforward, and the impact on formal employment was limited. Other factors and constraints, as well as the time required for infrastructure improvements to translate into employment outcomes, may have played significant roles in shaping the labor market. Key findings from the case study were: Job Creation and Electricity Reforms: • Approximately 600,000 jobs were created in Rwanda between 2017 and 2020. • While there was some correlation between the power reforms and job creation, evidence of a direct link is mixed. • Over 75% of the new jobs were in the agriculture sector, which has low electricity consumption. • Employment in manufacturing increased, but its share in total employment decreased, suggesting limited employment impact from power-sector reforms. • Other factors, such as access to finance, may have been key inhibitors of employment expansion. • Improved electricity quality and access may have boosted labor productivity rather than increasing the number of jobs. Limitations of the Study: • The analysis relied on available data and simple pre–post comparisons, which may not capture all factors influencing employment outcomes. • It’s possible that sufficient time had not yet elapsed for electricity infrastructure improvements to fully impact employment. • The study did not distinguish how the DPO series affected employment: by improving electricity services, reducing fiscal transfers, or providing additional resources to the GoR. • Establishment- and enterprise-level datasets used focused on formal firms, potentially missing informal job expansions. viii  KEY FINDINGS Employment not an Objective of DPO: Job creation and labor-market improvements were not primary objectives of the DPO series, but the study offers insight into how changes in electricity access and quality may affect labor outcomes over time. In summary, while there was some association between electricity reforms and job creation in Rwanda, the link was not straightforward, and the impact on formal employment was limited. Other factors and constraints, as well as the time required for infrastructure improvements to translate into employment outcomes, may have played significant roles in shaping the labor market. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS ix ONE INTRODUCTION This case study seeks to assess the degree to which employment trends in Rwanda were impacted by power sector reforms supported by a series of three consecutive World Bank Development Policy Operations (DPOs) approved between 2017/18 and 2019/20. It does so by drawing on information from administrative and secondary data along with interviews to highlight the link between observed sector-specific employment changes over time and DPO-supported activities. Rwanda witnessed substantial poverty reduction due to sustained economic growth at the beginning of the twenty-first century. Between 2010/11 and 2016/17, the economy grew at just under 8 percent annually, and the share of the population living below the national poverty line declined from 45.8 to 38.2 percent (World Bank 2020c). Despite this strong economic performance, gross domestic product (GDP) per capita, which stood at $745 in 2016 (World Bank 2020a), remained below the average for Sub-Saharan Africa, making Rwanda one of the world’s poorest countries, with significant infrastructure gaps. Expanding the power sector and improving its performance, in particular, were seen as “critical for sustaining economic growth and transforming Rwanda’s economy as it transitions from subsistence agriculture to more energy-intensive industrial and service activities” (World Bank 2017). A series of power sector reforms carried out by the Government of Rwanda (GoR) from 2013 onward greatly increased the efficiency of the sector, which saw increased private investment. For example, the latest round of reforms implemented as part of the Second Economic Development and Poverty Reduction Strategy (EDPRS-II) beginning in 2014 separated electricity and water utilities. For energy, it established the Rwanda Energy Group (REG) with two subsidiaries—the Energy Utility Corporation Limited (EUCL) and the Energy Development Corporation Limited (EDCL)—to enable better governance, allow for clear financial accountability between revenue-generating service functions and non- revenue-generating infrastructure development, and streamline operations in the energy sector (World Bank 2017). EUCL was designed to focus on improving electricity services in already electrified areas, while EDCL focused on expanding electricity access to new areas (REG 2022). Further, the GoR took steps to ensure that REG and its affiliates would conduct financial reporting in line with International Financial Reporting Standards to enhance financial transparency and REG’s ability to attract private and commercial finance, both as an offtaker of privately financed independent power producers and as a borrower from commercial banks (World Bank 2017). The success of these efforts was evident in increased generation capacity, which more than doubled between 2010 and 2017. This was financed to a great extent by the private sector, near-universal electrification of the country’s hospital and health centers, and a fivefold increase in Rwandans’ electricity access, which increased from 6 percent in 2008 to nearly 30 percent in 2016 (World Bank 2017). Yet, the high cost of electricity services remained a significant constraint. The GoR’s decision to prioritize the expansion of domestic electricity generation (over cheaper electricity imports from nearby countries such as Ethiopia, Kenya, and Uganda) led to high electricity costs per unit, considering the limited availability of domestic energy resources. The resulting tariffs, while still below costs, made electricity unaffordable for many households and enterprises.1 This partly contributed to household-level electricity access remaining restricted to the relatively wealthy, with negligible coverage in the bottom 40 percent of the population. It also JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 1 resulted in Rwandan firms paying substantially more for electricity than firms in neighboring countries, and the GoR intervening to fill the shortfall between electricity costs and revenues (a shortfall that was bringing the government’s budget under increasing pressure from the power sector) (World Bank 2017). To address these challenges faced by the electricity sector and reduce the monetary burden imposed by the power sector on public coffers, the GoR requested assistance from the World Bank to support a power sector reform program underpinned by the principles of least-cost planning, competition, accountability, and operational efficiency (World Bank 2017). Accordingly, the World Bank approved a series of three consecutive DPOs between 2017/18 and 2019/20 to support fiscally sustainable expansion of electricity services in the country.2 These DPOs were structured around two key pillars: • Pillar A, which sought to contain the fiscal impact of the electricity sector; and • Pillar B, which aimed to improve the operational efficiency, affordability, and accountability of electricity services. Section 2 presents a more detailed description of the power sector reforms initiated by the GoR. Section 3 outlines the case study’s objectives and overall methodology. Sections 4 and 5 provide an overview of the labor market conditions in the country, with focus on the state of employment and the state of establishments/enterprises, respectively. Section 6 describes findings from analyses of administrative and secondary data on the electricity sector (namely, electricity capacity, reliability, and price), employment, and establishments/ firms, before presenting a discussion of the findings. Section 7 concludes the case study. Endnotes Specifically, estimates by World Bank staff suggested that, at the tariff prevailing until 1.  January 2017, the affordability threshold was near the 70th income percentile (i.e., electricity was affordable for the top 30 percent and unaffordable for the lowest 70 percent) (World Bank 2017). Additional information about the first of these DPOs is available at https://projects. 2.  worldbank.org/en/projects-operations/project-detail/P162671; information about the second DPO is available at https://projects.worldbank.org/en/projects-operations/ project-detail/P166458; and information about the third DPO is available at https:// projects.worldbank.org/en/projects-operations/project-detail/P169040. 2 Introduction TWO SUMMARY OF RELEVANT ENERGY SECTOR INTERVENTIONS Over the past two decades, improvement and expansion of the electricity sector have been central to the GoR’s development and poverty reduction strategy. The GoR implemented many key reforms prior to the DPO series. Some may have improved employment outcomes but were not related to the key pillars identified above for the DPO series. Others, in particular those aimed at fiscal responsibility, were more clearly supported by the DPO series. Reforms Leading Up to the Development Policy Operations In 2000, the GoR launched the development program Vision 2002, which sought to transform Rwanda into a “knowledge-based” middle-income country by 2020. The program was implemented through a series of five-year strategic plans and included a clear recognition of the need to address the burden imposed by “inadequate and expensive electricity supply” by pursuing policies that “increase energy production and diversify into alternative energy sources” (Kaberuka 2000). In particular, EDPRS-II (covering 2013–14 to 2017–18), launched under Vision 2020, set ambitious targets for both electricity generation capacity and electricity access and sectoral reform, putting the power sector at the top of the GoR’s development agenda. Specifically, by 2018, EDPRS-II aimed to increase installed generation capacity to 563 megawatts (MW) (from 115 MW in 2013) and extend electricity access to 70 percent of Rwandans (from 15 percent in 2013) through both on- and off-grid means. Alongside investments in energy infrastructure, the GoR implemented a suite of power sector reforms focused on strengthening relevant institutions and explicitly articulating roles and responsibilities to foster better governance and increased accountability. These reforms accompanied EDPRS-II. These initiatives resulted in rapid growth of the Rwandan power sector. Installed generation capacity nearly doubled (from 115 MW to approximately 213 MW) between 2013 and 2017. However, many challenges remained. First, installed capacity fell considerably short of the ambitious expansion targets articulated in EDPRS-II. Second, failure to follow a Least-Cost Power Development Plan and the competitive procurement of power meant potential savings in the cost of power were not realized. Third, even though existing tariffs were high, they did not cover costs. This led to the power sector coming under a considerable fiscal burden due to its expansion, with the GoR intervening to fill the gap between sector cost and revenues. Finally, the high cost of power also resulted in electricity tariffs being unaffordable for many Rwandans. This lowered demand and system utilization, further increasing the average cost of supply. EDPRS-II was superseded by Rwanda’s National Strategy for Transformation for the period 2017–24, which aimed to create 1.5 million new jobs by 2024, partly through extension of affordable and reliable electricity access to 100 percent of the population.1 In particular, JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 5 the strategy represented a shift in the GoR’s focus from investments in installed capacity to policy and institutional reforms to foster the fiscal sustainability of the power sector. For example, the new National Electrification Plan (launched in 2019) aimed to institutionalize least-cost principles to improve planning for future expansions. Regulatory reforms and enhanced utility operational policies further sought to improve the power sector’s efficiency and the delivery of electricity services. Development Policy Operations Reforms To support the GoR in institutionalizing least-cost principles for power sector expansion, the World Bank approved a series of three consecutive annual DPOs between 2017/18 and 2019/20. The DPOs had the Program Development Objective of enabling fiscally sustainable expansion of electricity services in the country by containing the fiscal impact of the electricity sector and improving the operational efficiency, affordability, and accountability of electricity services (World Bank 2017, 2018, 2019). Specifically, policy actions supported as part of the series aimed to meet three main goals in the power sector: • Lower the cost of electricity service delivery and facilitate a transition to a low- carbon energy mix. By the end of the series, it was envisioned that the country would have adopted the Least-Cost Power Development Plan, the preparation of which was a prerequisite for the first DPO in the series. This would guide the prioritization of investments in least-cost energy resources. • Increase revenues from the delivery of electricity services. By the end of the series, EUCL, a subsidiary of REG responsible for maintaining electricity infrastructure (such as power plants and transmission/distribution networks) and electricity service delivery, was expected to have implemented a series of measures to enhance transparency, reduce nontechnical losses, and facilitate recovery of operating costs through an updated pricing system. • Enhance affordability for low-income consumers. By the end of the series, reduction in the cost of service delivery was expected to boost demand and incentivize electricity consumption in combination with a strategy to increase access to low-income consumers. The adoption of international quality standards for solar products was also expected to help create a conducive business environment for private sector actors in the off-grid energy market, and enhance access to energy services for lower-income consumers. Table A.1 in appendix A outlines the Prior Actions associated with each DPO.2 This table also indicates the corresponding results indicators (along with associated baseline values and targets for each indicator) as articulated during the design of the DPO series. 6 Summary of relevant energy sector interventions Theory of Change Figure 1 presents the theory of change for the DPO series as outlined in the Program Document for the third DPO (World Bank 2019). The theory of change delineates the high-level links between the Prior Actions and the beneficiary/Program Development Objective–level indicators indicated in table A.1, and the Program Development Objective and other higher- level objectives. FIGURE 1 Theory of Change for the DPO Series Prior Actions Beneficiary/PDO-level indicators PDO and higher-level objectives Pillar A: Contain the fiscal impact of the electricity sector A Tariff reforms Contain electricity subsidies Multiyear fiscal planning as a percentage of GDP for the energy sector Pillar B: Improve the operational efficiency, affordability, and accountability or electricity service B.1 Least-cost generation planning and regional trade Transition to least-cost and PPP Law and PPPs for low-carbon energy mix competitive procurement of generation B.2 Lifeline tariff and affordable Support economic and industrial connections development objectives of Rwanda Enable fiscally sustainable Least-cost electrification Increase access to expansion of Free up fiscal resources for human planning affordable and reliable electricity capital development electricity services services Off-grid solar product in Rwanda. standards Achieve Rwanda’s commitment to the Paris Climate Agreement Mini grid specifications & investment guidelines B.3 Transition to IFRS Improve accountability and External audit & publication transparency of REG of financial statements B.4 Commercial loss reduction & quality of service Improve operational efficiency and quality of electrical services Modernized HR, operations, & IT infrastructure Source: World Bank 2019. Note: GDP = gross domestic product; HR = human resources; IFRS = International Financial Reporting Standards; IT = information technology; PDO = Program Development Objective; PPP = public-private partnership; REG = Rwanda Energy Group. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 7 Endnotes Specifically, Priority Area 1 of the National Strategy for Transformation aimed to “create 1.  1,500,000 (over 214,000 annually) off-farm, decent and productive jobs for economic development” (Government of Rwanda 2017). Prior Actions are policy and institutional actions (including policy reforms) that are 2.  deemed critical to achieving the objectives of a DPO-supported program. These present the legal terms defined in the financing agreement (World Bank 2022a). 8 Summary of relevant energy sector interventions THREE OBJECTIVES AND OVERALL METHODOLOGY This case study seeks to shed light on the extent to which power sector reforms supported by the DPOs might have increased national employment. To do so, it relies on analyses of administrative and secondary data from several sources: (i) Rwandan Labor Force Survey. Data collected in multiple rounds of the Labor Force Survey (LFS) (before and after approval of power sector reforms) provide insights on economywide employment and labor underutilization characteristics and trends (National Institute of Statistics of Rwanda n.d.[a]). Specifically, the LFS includes information on total employment, youth employment, and time-related underemployment (disaggregated by sex and urban/rural status).1 It covers both formal and informal employment, and also sheds light on the occupational and sectoral distribution of the labor force. However, the case study does not use data from LFS rounds before 2017, because prior to that year, there was a change in the statistical methodology used by the National Institute of Statistics to estimate key labor market metrics (such as the unemployment rate) to that year. (ii) Rwandan Establishment Census. The case study uses data from multiple rounds of the Establishment Census (EC) (as with its use of data from multiple rounds of the LFS). The data provide insights on the economic activities, size, and formality status of establishments over time (National Institute of Statistics of Rwanda n.d.[b]). For formal establishments, the EC also contains information on organizational barriers and constraints (including those pertaining to the availability of infrastructure and public services, such as electricity). The case study relies on data from the 2014, 2017, and 2020 rounds of the EC. (iii) World Bank Enterprise Survey. This is a firm-level survey of a representative sample of firms in the nonagricultural formal private economy (World Bank 2022b). These data provide insights on a host of topics related to the business environment, for example, access to finance, infrastructural constraints, and competition. As such, they complement the data from the EC. They also provide information on the stock of (and changes in) aggregate permanent, full-time employment in a country’s private sector. The EC database contains data from three rounds (2006, 2011, and 2019) for Rwanda. (iv) GDP and national accounts statistics from the National Institute of Statistics of Rwanda (2021) provide insights on sector-specific trends in output before and after the launch of the DPO series. These insights enable assessment of the extent to which any observed changes in sectoral employment are accompanied by corresponding changes in sectoral GDP. (v) Administrative statistics on electricity from various sources (including REG, which is responsible for expanding, maintaining, and operating the country’s energy infrastructure, and the Rwanda Utilities Regulatory Authority, which oversees the regulation of public utilities) shed light on trends related to installed electricity capacity as well as access, cost, and quality over time. (vi) Program documents associated with the DPO series (including program documents, program information documents, and the Implementation Completion and Results report) shed light on the evolution of power sector constraints, implementation status (including the undertaking of required Prior Actions), and progress as measured by indicators included in the Policy and Results Matrix (World Bank 2017, 2018, 2019, n.d.). JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 11 Findings from a series of key informant interviews with selected stakeholders complement the descriptive analyses. Interviews were conducted with staff from the Ministry of Infrastructure, REG, and the Rwanda Utilities Regulatory Authority. The case study’s writers also met with representatives from firms associated with the design, monitoring, and evaluation of mini grid and off-grid energy infrastructure. Lastly, a set of interviews were conducted with selected private sector firms. Table 1 provides a breakdown of the key informant interviews conducted as part of this case study. Given the complex, interlinked nature of the power sector reforms supported by the DPO series, it is worth highlighting the key themes guiding the DPO series and their potential links to employment: • Fiscal responsibility. A key theme of the DPO series focuses on the need to contain the costs of the energy sector. Achieving this goal would free up government funds for other priorities. For example, investment in social sectors (such as health and education) would offer a long-term boost to labor force productivity and employment. However, since the possible priorities are wide ranging, this case study does not attempt to capture their potential links to job creation. • Efficiency, cost, and quality of power supply. Another key theme focuses on the need to improve the power sector’s financial condition through promoting competitive procurement of power generation capacity and moving away from ad hoc, bilaterally negotiated contracts; using International Financial Reporting Standards; and improving operational efficiency and quality of electricity services, including by limiting losses and reducing the average duration and frequency of interruptions (System Average Interruption Duration Index and System Average Interruption Frequency Index, respectively). Together, these measures would be expected to improve efficiency, lower costs, and enhance the sector’s ability to attract private investment as well as to provide more and higher-quality TABLE 1 Overview of Key Informant Interviews NAME OR TYPE OF INSTITUTION NUMBER OF INTERVIEWS Ministry of Infrastructure 3 Energy Development Corporation Limited 3 Energy Utility Corporation Limited 2 Rwanda Utilities Regulatory Authority 1 Technology development consulting firm 1 Energy sector professional association 3 Private sector entitiesa 3 a Interviewees from the private sector were managing directors of a commercial building complex and of an industrial plastics factory, and the owner of a bar/restaurant. 12 Objectives and overall methodology electricity. The case study addresses this topic by using available administrative and secondary data to examine the extent to which the reliability and availability of electricity changed from 2017 to the present. It then compares those trends with changes in employment outcomes to gauge the association between the two. • Renewable energy. A third theme of the DPO series focuses on revising laws to facilitate renewable energy generation. This includes grid-connected hydropower and solar power, as well as the removal of barriers to mini grid and off-grid solar energy (namely, solar home systems). This case study addresses this topic by drawing on insights from a series of interviews focusing on mini grids. However, given mini grids’ relatively small contribution to increasing overall generation capacity, this case study does not separately consider the employment implications of investments in mini grids or solar home systems. • Access. A fourth theme of the DPO series focuses on implementing lifeline tariffs and reducing connection charges to increase access to more affordable electricity services. The expected beneficiaries of the activities related to this theme would primarily be low-energy-use consumers newly gaining access through grid and off-grid electricity sources. While the case study reviews the evolution of various electricity tariff regimes to gauge their association with overall employment trends, it does not directly assess the employment impacts experienced by these beneficiary groups, given the absence of data covering households; micro, small, and medium enterprises; and informal firms likely to benefit from activities related to this theme. To summarize, this case study analyzes the induced jobs that the DPO series would most likely create through improved access to and quality of electricity. Due to the DPOs’ policy focus as well as their nationwide coverage, an assessment of direct and indirect jobs was not feasible. Endnote According to the International Labour Organization (ILO n.d.), “persons in time-related 1.  underemployment comprise all persons in employment who satisfy the following criteria during the reference period: a) are willing to work additional hours; b) are available to work additional hours i.e., are ready, within a specified subsequent period, to work additional hours, given opportunities for additional work; and c) worked less than a threshold relating to working time i.e., persons whose hours actually worked in all jobs during the reference period were below a threshold, to be chosen according to national circumstances.” JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 13 FOUR RESULTS Evolution of Electricity Capacity, Access, Reliability, and Cost Installed Capacity Between 2017 and 2021, installed capacity increased by 14 percent, from approximately 209 MW to 238 MW (figure 2). This represented continued growth in installed capacity relative to the preceding three years, which saw a 33 percent increase in installed capacity (from 156 MW in 2014 to 209 MW in 2017). FIGURE 2 Evolution of Installed Capacity (MW) 300 DPO 2 250 (11/15/2018) DPO 3 200 (8/29/2019) DPO 1 (12/1/2017) MW 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Rwanda Energy Group. Note: DPO approval dates indicated in parentheses. DPO = Development Policy Operation; MW = megawatt. Electricity Access In 2014, less than 20 percent of Rwanda’s population had access to electricity. By 2017, this figure had increased to over 34 percent, representing a 70 percent increase in the national electrification rate (figure 3). Rwanda’s National Strategy for Transformation, launched in 2017, aimed to ensure electricity access for 100 percent of the population by 2024 (with an JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 15 FIGURE 3 Evolution of Electricity Access (% of Population) 50.0 DPO 2 45.0 (11/15/2018) DPO 3 (8/29/2019) 40.0 35.0 30.0 DPO 1 (12/1/2017) 25.0 % 20.0 15.0 10.0 5.0 0.0 2014 2015 2016 2017 2018 2019 2020 Source: World Bank’s World Development Indicators. Note: DPO approval dates indicated in parentheses. DPO = Development Policy Operation. envisioned distribution of 70 and 30 percent from grid and off-grid sources, respectively). Between 2017 and 2020, the latest year for which World Bank statistics are available, the electrification rate increased from approximately 34 percent to nearly 47 percent, representing a 13 percentage point increase in the share of the population with access (37 percent; figure 3). This increase was consistent with that of the preceding three years.1 That said, national trends in electricity access masked considerable urban-rural disparities in terms of level of electrification as well as the change in electrification rate. Between 2014 and 2020, for instance, the share of the urban population with access to electricity increased from 72 to 86 percent. Over the same period, the rural electrification rate more than quadrupled from 9 percent to 38 percent. Despite this rapid growth, a majority of rural Rwandans still lacked access to electricity. Electricity Reliability Between 2017–18 and 2020–21, the reported number of electricity outages in Rwanda declined by 60 percent, from approximately 7,500 per year to 3,000 per year (figure 4). The total duration of outages (measured in hours) showed a somewhat smaller reduction, of approximately 40 percent, over the same period. About four-fifths of the reduction in outage duration occurred between 2017–18, when the first DPO was approved, and 2018–19, when the second DPO was approved. Subsequent improvements in electricity quality between 2018–19 and 2020–21 were negligible. In fact, the period from 2019–20 to 2020–21 16 results FIGURE 4 Evolution of Annual Number and Duration of Outages Between 2017 and 2021 8,000 DPO 1 DPO 2 DPO 3 (12/1/2017) (11/15/2018) (8/29/2019) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2017–2018 2018–2019 2019–2020 2020–2021 Total duration of outages (hours) Total number of outages Source: Rwanda Utilities Regulatory Authority. Note: DPO approval dates indicated in parentheses. The fiscal years on the x-axis go from July 1 to June 30. DPO = Development Policy Operation. (i.e., following the approval of the third DPO) saw a slight worsening in reliability as measured by the annual frequency of outages. Electricity Price The GoR’s overarching goal with regard to electricity delivery is “to achieve fast electrification levels for industry and household usage based on a sustainable and affordable tariff” (REG 2019). Table 2 compares the tariff regime of 1994 to those in 2017, 2018, and 2020 (in Rwanda francs and US dollars, based on prevailing exchange rates). It shows an 8–17 percent decrease in nominal dollar-denominated tariffs for residential low-usage customers as well as medium and large industries between 1994 and 2017, even as they increased for other types of customers. This suggests that the tariff regime established in 2017 aimed to incentivize electricity use by residential low-usage consumers as well as medium and large industries relative to other types of customers.2 Minor adjustments to the 2018 and 2020 nominal tariffs (in Rwanda francs) increased rates slightly for most types of customers except those using less than 15 kilowatt- hours (kWh) per month. However, the nominal dollar-denominated tariff rates were lower for nearly all types of customers in 2020 compared with 2017 tariff rates, and no major adjustments have been made to the tariff structure since the approval of the DPO series in 2017. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 17 TABLE 2 Evolution of Electricity Tariffs, 1994–2020 1994 JANUARY 1, AUGUST 13, JANUARY 20, % % 2017 2018 2020 CHANGE CHANGE BETWEEN BETWEEN 1994 AND 2017 AND 2017 2020 RF per $: — 142.7 — 820.02 — 863.96 — 1,014.3 — — RF $ RF $ RF $ RF $ Residential 0–15 kWh 17 0.12 89 0.11  89 0.10  89 0.09 −8.3% −18.2% 15–50 kWh 17 0.12 182 0.22 182 0.21 212 0.21 83.3% −4.5% >50 kWh 17 0.12 189 0.23 210 0.24 249 0.25 91.7% 8.7% Nonresidentiala 0–100 kWh 17 0.12 189 0.23 204 0.24 227 0.22 91.7% −4.3% >100 kWh 17 0.12 192 0.23 222 0.26 255 0.25 91.7% 8.7% Small industries £22,000 kWh 17 0.12 126 0.15 110 0.13 134 0.13 25.0% −13.3% Medium industries 22,000– 17 0.12  90 0.11  87 0.10 103 0.10 −8.3% −9.1% 660,000 kWh Large industries >660,000 kWh 17 0.12  83 0.10  80 0.09  94 0.09 −16.7% −10.0% Source: Rwanda Utilities Regulatory Authority. Note: Energy consumption blocks represent monthly consumption. Each year uses the contemporaneous Rwanda franc–US dollar exchange rate for conversions. kWh = kilowatt-hour; RF = Rwanda franc. a This category covers nonresidential buildings, such as hospitals, schools, universities, and places of worship. Evolution of Employment Between 2017 and 2020 The Rwandan labor market in 2017 was primarily agricultural and informal. Although agriculture had a share of only about 25 percent in Rwanda’s GDP (World Bank 2020b), employment in this sector accounted for nearly 40 percent of total employment—the single largest sector, characterized by substantial reliance on subsistence farming and high levels of labor underutilization (National Institute of Statistics of Rwanda 2017b). Over 75 percent of total employment was in the informal sector, and informality was especially pervasive in agriculture (National Institute of Statistics of Rwanda 2017b). A comparative analysis of data from the 2017 and 2020 rounds of the LFS sheds light on employment and job creation trends before and after the approval of the first DPO. Table 3 provides an overview of the Rwandan labor force in 2020 to facilitate comparison with the labor market situation prior to approval of the first DPO in 2017. Between 2017 and 2020, 18 results TABLE 3 Key Labor Force Indicators, 2017 and 2020 TOTAL MALE FEMALE URBAN RURAL 2017 2020 2017 2020 2017 2020 2017 2020 2017 2020 Population 16 years 6,812,978 7,381,778 3,188,634 3,467,978 3,624,344 3,913,801 1,520,102 1,544,572 5,292,875 5,837,208 old and over Labor forcea 3,600,916 4,105,648 1,993,119 2,217,978 1,607,797 1,887,671 999,721 1,061,656 2,601,194 3,043,993 Labor force 52.9% 55.6% 62.5% 64.0% 44.4% 48.2% 65.8% 68.7% 49.1% 52.1% participation rate (%)b Unemployment 17.8% 13.1% 15.2% 12.3% 21.0% 14.0% 18.5% 14.5% 17.5% 12.6% rate (%) Time-related 23.3% 28.1% 21.9% 25.3% 25.0% 31.4% 10.5% 14.0% 28.2% 33.1% underemployment (% of labor force) Youth 21.7% 17.3% 17.9% 16.7% 26.1% 17.9% 21.7% 19.1% 21.7% 17.3% unemployment rate (16–30 years) (%) Median total 20,800 26,000 26,000 26,000 18,200 20,800 52,000 60,000 18,200 20,800 monthly earnings on the main job (RF) Source: Labor Force Survey (2017 and 2020 rounds). a “Labor force” is the sum of working-age individuals (16 years old and over) actively engaged in the labor market or actively looking for work, i.e., employed or unemployed. b “Labor-force participation rate” is the share of the working-age population (16 years old and over) actively engaged in the labor market, i.e., employed. the labor force participation rate increased by approximately 3 percentage points, from 53 to 56 percent, and the unemployment rate decreased by nearly 5 percentage points, from about 18 to 13 percent. In addition, the unemployment rate among youth also fell, from approximately 22 to 17.3 percent. However, this period saw an increase in underemployment from 23.3 percent in 2017 to 28.1 percent in 2020, suggesting that although there was an increase in jobs, workers in some of these new positions were underemployed.3 Table 4 shows the occupations of the employed population in 2017 and 2020. More than 600,000 jobs were created in the period, as shown by the change in the size of the total employed population. In 2017, the employed population mainly had elementary occupations (54 percent), were service and sales workers (19 percent), and craft and related trade workers (8 percent).4 Rural areas had more elementary occupations and skilled agriculture jobs. By contrast, urban areas had a relatively higher concentration of services and sales workers, craft and related trade workers, specialized professionals, plant and machine operators, managers, and technicians. Despite the addition of approximately 600,000 new jobs between 2017 and 2020, this broad distribution remained largely unchanged over this JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 19 TABLE 4 Occupations of Employed Population by Area, 2017 and 2020 OCCUPATION % OF EMPLOYED POPULATION TOTAL TOTAL URBAN RURAL 2017 2020 % CHANGE 2017 2020 2017 2020 2017 2020 Elementary occupations 1,595,105 1,924,232 20.6% 53.9% 53.9% 34.4% 28.9% 61.3% 62.4% Service and sales workers 568,415 624,438  9.9% 19.2% 17.5% 28.5% 26.5% 15.7% 14.4% Craft and related trade 224,244 298,711 33.2% 7.6% 8.4% 8.4% 10.7% 7.3% 7.6% workers Skilled agricultural workers 201,171 266,774 32.6% 6.8% 7.5% 1.4% 1.3% 8.8% 9.6% Professionals 187,371 215,128 14.8% 6.3% 6.0% 11.6% 13.5% 4.3% 3.5% Plant and machine operators 72,313 87,641 21.2% 2.4% 2.5% 5.4% 5.5% 1.3% 1.4% Managers 45,706 61,710 35.0% 1.5% 1.7% 4.8% 5.2% 0.3% 0.5% Technicians and associated 40,894 57,399 40.4% 1.4% 1.6% 3.1% 5.3% 0.7% 0.4% professionals Clerical and support workers 24,746 32,901 33.0% 0.8% 0.9% 2.5% 3.1% 0.2% 0.2% TOTAL 2,959,965 3,568,934 20.6% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: Labor Force Survey (2017 and 2020 rounds). period. For example, elementary occupations, service and sales workers, and craft and related trade workers remained the three most common occupations in 2020. Over 75 percent of the new jobs created between 2017 and 2020 were related to agriculture, forestry, and fishing. This resulted in an approximately 6.6 percentage point increase in the share of total employment in this sector (table 5). Other sectors that contributed significantly to the total growth in jobs over this period include activities related to accommodation and food services (11.3 percent of jobs created), administrative and support services (7 percent), and transportation and storage (6.2 percent). By contrast, employment related to wholesale retail trade and motor vehicle repair contracted substantially between 2017 and 2020, with the total share of jobs in this sector shrinking by 4.7 percentage points. These results suggest that the share of employment in the more-electricity-intensive sectors declined relative to employment in other sectors. More precisely, employment shares fell by 1.6 percentage points in construction and 0.6 percentage points in manufacturing, and rose by only 0.1 percentage points in mining and quarrying. This resulted in a net change of -2.1 percentage points in employment across these three sectors.5 In comparison, as noted above, the employment share rose by 6.6 percentage points in agriculture (table 5). 20 results TABLE 5 Employed Population by Branch of Economic Activity, 2020 Versus 2017 SECTOR EMPLOYED POPULATION 2017 2020 CHANGE (2017 TO 2020) NUMBER SHARE NUMBER SHARE CHANGE % PERCENTAGE SHARE OF (%) (%) IN CHANGE POINT JOBS NUMBER IN CHANGE IN CREATED NUMBER SHARE (%) Agriculture, 1,110,612 37.5% 1,572,159 44.1% 461,547 41.6% 6.6% 75.8% forestry, and fishing Wholesale, retail 492,486 16.6% 423,371 11.9% −69,115 −14.0% −4.7% −11.3% trade, motor vehicle repair, motorcycles Construction 304,473 10.3% 309,533 8.7% 5,060 1.7% −1.6% 0.8% Manufacturing 179,926 6.1% 196,543 5.5% 16,617 9.2% −0.6% 2.7% Activities of 202,632 6.8% 182,257 5.1% −20,375 −10.1% −1.7% −3.3% households as employers Transportation 119,181 4.0% 156,807 4.4% 37,626 31.6% 0.4% 6.2% and storage Education 116,713 3.9% 127,276 3.6% 10,563 9.1% −0.3% 1.7% Accommodation 47,902 1.6% 116,922 3.3% 69,020 144.1% 1.7% 11.3% and food services activities Administrative 30,247 1.0% 72,661 2.0% 42,414 140.2% 1.0% 7.0% and support services activities Public 71,556 2.4% 69,530 1.9% −2,026 −2.8% −0.5% −0.3% administration and defense Mining and 54,618 1.8% 66,182 1.9% 11,564 21.2% 0.1% 1.9% quarrying Human health 52,794 1.8% 62,683 1.8% 9,889 18.7% 0% 1.6% and social work activities Others 176,825 6% 213,010 6% 36,185 20.5% 0% 5.9% TOTAL 2,959,965 100% 3,568,934 100% 608,969 20.6% 0% 100% Source: Calculations based on Labor Force Survey 2020. See table A.3 for disaggregated data based on gender and rural-urban status. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 21 Note, however, that employment actually increased in manufacturing (9.2 percent), construction (1.7 percent), mining and quarrying (21 percent), hospitality (144 percent), administrative services (140 percent), and so on, between 2017 and 2020. In other words, the number of new jobs increased in sectors identified as relatively more electricity intensive than agriculture/ forestry/fisheries—other than wholesale/retail trade and motor vehicle repair (which saw a decline of 14 percent). However, this increase was not at the same rate as in agriculture/ forestry/fisheries. Evolution of Sectoral Output Between 2017 and 2020 Why is notable employment growth observed in relatively less-electricity-intensive sectors (especially agriculture, forestry, and fishing), than in more-electricity-intensive sectors (such as construction and manufacturing)? One possible explanation is that electricity-intensive sectors gained in productivity due to improved electricity services, reducing the need for employment to increase at the same rate. This, in turn, could have prompted workers who would have otherwise been employed in those sectors to move into subsistence jobs in agriculture, forestry, and fishing—an example of how improved electricity services can potentially reduce employment opportunities in sectors using electricity. Table 6, which presents an overview of sector-specific GDP trends between 2017 and 2020, provides suggestive evidence in support of this hypothesis. Specifically, although the sectoral categorizations shown in this table do not perfectly correspond to those presented in table 5, the broad trends in sectoral output shown in table 6 suggest that relatively more-electricity- intensive sectors (such as construction and manufacturing) experienced higher GDP growth over this period than sectors that are less electricity intensive (such as agriculture, forestry, and fishing). This contrasts starkly with the relative contribution of such sectors to the observed job creation. For example, even though the construction sector contributed less than 1 percent to the total jobs created between 2017 and 2020, output for this sector grew by over 30 percent. This output accounted for nearly 13 percent of the total GDP growth over the same period. Similarly, growth in manufacturing, which accounted for less than 3 percent of the jobs created over 2017–20, was responsible for nearly 15 percent of the total GDP growth over the same period. By contrast, agriculture, forestry, and fishing contributed only about 22 percent of the total GDP growth between 2017 and 2020, despite accounting for over three-quarters of the employment growth over this period. These patterns are consistent with increased productivity in some of the more-electricity-intensive sectors (for instance, due to higher levels of automation due to improved access to and quality of electricity services), resulting in electricity-enabled expansion in output without a corresponding increase in employment.6 22 results TABLE 6 Gross Domestic Product by Sector (in RF, Billions at Constant 2017 Prices) SECTOR 2017 2020 % CHANGE % OF GDP (2017–20) GROWTH (2017–20) Gross domestic product (GDP) 7,694 8,838 14.9% 100.0% Agriculture, forestry & fishing 2,027 2,278 12.4% 21.9% Industry 1,330 1,614 21.4% 24.8% Mining & quarrying 165 117 −29.1% −4.2% Total manufacturing 591 762 28.9% 14.9% Of which: Food 210 265 26.2% 4.8% Beverages & tobacco 159 186 17.0% 2.4% Textiles, clothing & leather goods 34 61 79.4% 2.4% Wood & paper; printing 26 34 30.8% 0.7% Chemicals, rubber & plastic products 34 54 58.8% 1.7% Non-metallic mineral products 34 44 29.4% 0.9% Metal products, machinery & equipment 32 51 59.4% 1.7% Furniture & other manufacturing 61 67 9.8% 0.5% Electricity 84 100 19.0% 1.4% Water & waste management 32 34 6.3% 0.2% Construction 458 602 31.4% 12.6% Services 3,684 4,136 12.3% 39.5% Trade & transport 992 1,198 20.8% 18.0% Wholesale, retail trade, repair of motor vehicles, motorcycles 637 834 30.9% 17.2% Transport services 355 364 2.5% 0.8% Other services 2,692 2,938 9.1% 21.5% Hotels & restaurants 140 98 −30.0% −3.7% Information & communication 134 216 61.2% 7.2% Financial services 191 222 16.2% 2.7% Real estate activities 560 611 9.1% 4.5% Professional, scientific and technical activities 163 195 19.6% 2.8% Administrative and support service activities 277 281 1.4% 0.3% Public administration and defense; compulsory social security 446 514 15.2% 5.9% (continues) JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 23 TABLE 6 Gross Domestic Product by Sector (in RF, Billions at Constant 2017 Prices) (Continued) SECTOR 2017 2020 % CHANGE % OF GDP (2017–20) GROWTH (2017–20) Education 231 153 −33.8% −6.8% Human health and social work activities 160 192 20.0% 2.8% Cultural, domestic & other services 391 456 16.6% 5.7% Taxes less subsidies on products 654 809 23.7% 13.5% Source: National Institute of Statistics Rwanda 2017 and National Institute of Statistics Rwanda 2021. Note: GDP = gross domestic product. Evolution of Establishments Between 2014 and 2020 Improvements in the provision of electricity services might have improved employment outcomes also through increases in the formation of enterprises. Rwanda was estimated to have approximately 190,000 establishments in 2017 (table 7).7 Approximately 95 percent of TABLE 7 Distribution and Change of Establishments by Institutional Sector (Number and %) INSTITUTIONAL 2014 2017 % CHANGE 2020 % CHANGE SECTOR IN COUNT IN COUNT COUNT % COUNT % (2014–17) COUNT % (2017–20) Private sector 146,227 94.8% 180,880 95.1% 23.7% 222,159 95.6% 22.8% Cooperative 2,071 1.3% 2,838 1.5% 37.0% 3,277 1.4% 15.5% Public sector 1,499 1% 1,780 0.9% 18.7% 2,331 1% 31.0% Public-private partnership 1,891 1.2% 2,049 1.1% 8.4% 2,033 0.9% (0.8)% NGO (Rwanda) 2,406 1.6% 2,326 1.2% (3.3)% 2,173 0.9% (6.6)% NGO (International) 142 0.1% 415 0.2% 192.3% 310 0.1% (25.3)% TOTAL 154,236 100% 190,288 100% 23.4% 232,283 100% 22.1% Source: Establishment Census 2020. Note: NGO = nongovernmental organization. 24 results these were classified as belonging to the private sector, while cooperatives, public sector, public-private partnerships, and local and international nongovernmental organizations composed the remaining 5 percent. The number of private sector establishments increased from approximately 181,000 in 2017 to over 220,000 between 2017 and 2020, representing an increase of nearly 23 percent. This is comparable to the increase in private sector establishments between 2014 and 2017, but far higher than the 8 percent increase in the population ages 16 and above between 2017 and 2020 (see table 3). Table 8 shows changes in the distribution of Rwandan establishments by economic activity between 2014 and 2020. In 2017, prior to the approval of the first DPO, more than half of the establishments were engaged in wholesale and retail trade, and repairing motor vehicles and motorcycles. Other major activities included activities related to accommodation and food services (28 percent), manufacturing (7.7 percent), and other service activities (6.7 percent).8 The four main economic activities carried out by establishments remained largely unchanged in 2020. Although these four areas remained dominant over the period covered in this table (consistently comprising approximately 95 percent of all establishments), the relative shares of establishments engaged in these activities changed considerably over time. Some of these shifts appear to be inconsistent with employment changes by sector (which might lead to cause for concern about these data’s accuracy). The number of establishments engaged in wholesale and retail trade, and motor vehicle/motorcycle repair, for example, grew by approximately 39 percent between 2017 and 2020. This increased the share of establishments for this economic activity from approximately 50 percent to nearly 60 percent over the same period. The fact that this growth coincided with a reduction in the size of the labor force engaged in this activity (as shown in table 5) suggests that it was driven primarily by the entry of smaller establishments (those employing relatively fewer people) even while relatively larger establishments with more employees exited the area or reduced their workforce. Both the number and share of establishments engaged in accommodation and food services, in contrast, fell between 2017 and 2020, even while the number of employees engaged in these activities more than doubled over the same period (as shown in table 5). Although the emergence of the COVID-19 pandemic likely explains part of this reduction—as establishments engaged in accommodation and food services were disproportionately affected by social distancing restrictions—the growth in the number of employees suggests that consolidation of smaller establishments and/or growth of larger ones also took place. Studies suggest that such establishment-level consolidation is less likely to occur in contexts characterized by unreliable access to electricity (e.g., Abeberese 2017; Kassem 2021). Finally, trends in the total number of establishments in relatively electricity-intensive sectors (namely, manufacturing, mining and quarrying, and construction) were mixed. For example, the number of firms engaged in manufacturing or in construction increased by between 8 and 17 percent, while the number of firms carrying out mining and quarrying fell by 8 percent. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 25 TABLE 8 Change in the Number of Private Establishments and Business-Oriented Mixed Establishments by Economic Activity, 2014–20 26 ECONOMIC ACTIVITY 2014 SHARE 2017 SHARE % CHANGE PERCENTAGE 2020 SHARE % CHANGE PERCENTAGE COUNT (2014) COUNT (2017) IN COUNT POINT CHANGE COUNT (2020) IN COUNT POINT CHANGE results (2014–17) IN SHARE (2017–20) IN SHARE (2014–17) (2017–20) Wholesale and retail trade; motor vehicle and motorcycle repair 78,453 52.9% 96,002 52.2% 22.4% −0.7 133,267 59.0% 38.8% 6.8% Accommodation and food services activities 44,621 30.1% 51,830 28.2% 16.2% −1.9% 46,093 20.4% −11.1% −7.8% Other services activities 8495 5.7% 12,355 6.7% 45.4% 1.0% 18,198 8.1% 47.3% 1.3% Manufacturing 10,730 7.2% 14,171 7.7% 32.1% 0.5% 16,580 7.3% 17.0% −0.4% Financial and insurance activities 1,146 0.8% 1,530 0.8% 33.5% 0.1% 2,351 1.0% 53.7% 0.2% Professional, scientific, and technical activities 932 0.6% 1,207 0.7% 29.5% 0.0% 1,909 0.8% 58.2% 0.2% Administrative and support services activities 917 0.6% 1,401 0.8% 52.8% 0.1% 1,186 0.5% −15.3% −0.2% Water supply; sewage, waste management, and remediation activities 49 0.0% 574 0.3% 1071.4% 0.3% 1,185 0.5% 106.4% 0.2% Information and communication 397 0.3% 1,130 0.6% 184.6% 0.3% 1,133 0.5% 0.3% −0.1% Education 499 0.3% 1,014 0.6% 103.2% 0.2% 986 0.4% −2.8% −0.1% Human health and social work activities 458 0.3% 617 0.3% 34.7% 0.0% 917 0.4% 48.6% 0.1% Transportation and storage 282 0.2% 366 0.2% 29.8% 0.0% 667 0.3% 82.2% 0.1% Arts, entertainment, and recreation 131 0.1% 430 0.2% 228.2% 0.1% 402 0.2% −6.5% −0.1% Agriculture, forestry, and fishing 724 0.5% 545 0.3% −24.7% −0.2% 392 0.2% −28.1% −0.1% Mining and quarrying 281 0.2% 306 0.2% 8.9% 0.0% 283 0.1% −7.5% 0.0% Construction 156 0.1% 156 0.1% 0.0% 0.0% 169 0.1% 8.3% 0.0% Real estate activities 4 0.0% 103 0.1% 2475.0% 0.1% 143 0.1% 38.8% 0.0% Electricity, gas, steam, and air conditioning supply 20 0.0% 127 0.1% 535.0% 0.1% 58 0.0% −54.3% 0.0% TOTAL 148,376 100 183,867 100% 23.9% — 225,919 100.0% 22.9% — Source: Establishment Census 2020. Endnotes Alternative estimates from REG indicate that approximately 65 percent of households 1.  had electricity access in 2021 (approximately 47 percent connected to the grid and 18 percent connected to off-grid systems) (EDCL 2021). Between 1994 and 2017, for example, the electricity tariff (in nominal dollar terms) for 2.  residential low-usage customers as well as medium and large industries decreased by 8–17 percent, whereas that for all other types of consumers increased by 25–92 percent (table 2). Underemployment refers to a situation where labor is utilized insufficiently. It is typically 3.  measured as the share of workers working less than a nationally defined threshold for work time. In the Rwandan context, this threshold is defined as 35 working hours per week (Baxter, Dyèvre, and Gathani 2015). According to the International Standard Classification of Occupations (ILO 2004), 4.  elementary occupations comprise “simple and routine tasks which mainly require the use of hand-held tools and often some physical effort.” These include selling goods on streets, stocking vending machines, and driving animal-drawn vehicles. Electricity use per employee was calculated by combining employment for the categories 5.  manufacturing, construction, and mining and quarrying in table 5 and comparing that to energy use in the “industry and construction” sector reported for Rwanda in data from UN (2021). Those data suggest a ratio of 0.3 million kWh per 1,000 employees in 2017 and 0.35 million kWh per 1,000 employees in 2020 for the industry and construction sector. In comparison, total electricity use for all other sectors was approximately 0.18 million kWh per 1,000 employees in 2017 and 0.17 million kWh per 1,000 employees in 2020. A notable exception is mining and quarrying, a relatively electricity-intensive sector that 6.  contracted by nearly 30 percent in terms of output between 2017 and 2020 (table 6). The sector’s contribution to job creation was negligible over the same period (table 5). Following international standards, the Establishment Census defines an establishment as 7.  an “enterprise or part of an enterprise that is situated in a single location and in which only a single (non-ancillary) productive activity is carried out or in which the principal productive activity accounts for most of the value added,” whereas an enterprise is defined as an “economic transactor with autonomy in respect of financial and investment decision- making, as well as authority and responsibility for allocating resources for the production of goods and services” (National Institute of Statistics of Rwanda 2017a). An enterprise may be a corporation, a nonprofit institution, or unincorporated. Thus, an “enterprise” is either a stand-alone or a multibranch entity. Each of its separate branches is considered an “establishment.” The Establishment Census focuses primarily on the nonagricultural economic sectors 8.  of Rwanda. It is for this reason that agriculture, forestry, and fishing (the sector that employs the most people) only had about 550 establishments (0.3 percent of the total). These establishments are typically engaged in agricultural processing activities. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 27 FIVE DISCUSSION To what extent did the power sector reforms supported by the DPOs affect the observed employment trends in Rwanda? Approximately 600,000 new jobs were created in the country between 2017 and 2020. According to this case study, there is mixed evidence on the extent to which the observed job creation during the period covered by the DPOs can be attributed to improvements in the availability and quality of power supply. The energy sector’s performance continued to improve during the period covered by the DPO series. As shown in figure 3, relatively rapid growth in installed capacity began around 2014, well before the DPO series. This growth coincided with substantial increases in electricity access and reductions in the frequency and duration of outages (figures 4 and 5). Overall generation capacity continued to grow between 2017 and 2020, the time period covered by the DPO series, albeit at a slower pace relative to the period immediately before the approval of the first DPO. Consistent with this continued growth in installed capacity, access to electricity (as a share of the population) increased by about 13 percentage points, from approximately 34 percent in 2017 to nearly 47 percent in 2020. Similarly, improvements in electricity reliability (especially in terms of a reduction in the annual number of outages) coincided with the approval of the first DPO in 2017–18, and they were broadly sustained over the period covered by the DPO series (i.e., through 2020–21). It is worth noting that the growth patterns of the relatively small mini grid subsector do not mirror “In 2017, REG ceased the these broader positive trends. Operational mini grids issuance of preliminary were constructed in the country largely before 2017, permits to start mini grid since the preliminary approval process to start a mini projects, and all projects in grid project (overseen by EDCL, a subsidiary of REG) pipelines were frozen . . . was put on hold until mapping exercises associated By the time the NEP with the National Electrification Plan were completed [National Electrification in 2019 (USAID 2019). The initial targets had Plan] was completed, envisioned mini grid electricity access being many of the areas that provided to approximately 10 percent of the villages were expected to be in Rwanda (REG 2019). Subsequent updates to the covered by the mini grid National Electrification Plan revised the target were connected to the significantly downward and reduced the share of national grid.” villages served by mini grids to 1.2 percent (EDCL 2021). This was partly due to REG’s capacity to connect —Managing Director more villages with grid electricity than initially of a mini grid firm expected as well as the limited capacity of mini grid providers to connect more villages with relatively low demand. These challenges with the expansion of mini grid access are reflected in the performance of the DPO series against Results Indicator B2, which aimed for 61 percent of households to have electricity access (38 percent grid connected and 23 percent off-grid connections). Specifically, grid electricity connections for households composed 39 percent of the total, and the target was achieved, whereas off-grid household connections lagged at 15 percent. This resulted in the national household electrification rate increasing from 41 percent in 2017 to 54 percent in June 2021, even though it lagged behind the target value of 61 percent (World Bank 2022c).1 JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 29 At the same time, however, Rwandan enterprises did not see electricity as a binding constraint for their day-to-day operations or for the growth of their businesses. As shown in figure 5, the share of Rwandan firms reporting electricity as the “biggest obstacle” for their business fell sharply between 2006 and 2011 (well before the implementation of the policy actions supported by the DPOs), and it remained “We don’t have a generator negligible in 2019. Access to finance and land, and as we rarely experience a tax rates imposed considerably heavier burdens on power outage, and when Rwandan enterprises. If these or other nonenergy it happens, it lasts a very constraints were binding for the growth of Rwandan short time. . . .” enterprises, any underlying improvement in electricity quality or availability would be unlikely to —Managing Director result in enterprise growth or associated expansion of plastics factory in employment. “During the past five years, An assessment of specific electricity-related we rarely experienced challenges suggests that the beneficial effects of power outage . . .” electricity quality improvements on firms largely predated the policy actions supported by the DPOs. —Owner of bar/restaurant As shown in figure 6, the number of outages that FIGURE 5 Selected “Biggest Obstacle” for Rwandan Enterprises Access to finance Access to land 50 50 40 40 30 30 20 20 10 10 0 0 2005 2010 2015 2020 2005 2010 2015 2020 % of firms Electricity Tax rates 50 50 40 40 30 30 20 20 10 10 0 0 2005 2010 2015 2020 2005 2010 2015 2020 All Manufacturing Services Source: World Bank Enterprise Surveys (http://www.enterprisesurveys.org). 30 discussion FIGURE 6 Electricity-Related Challenges, 2006, 2011, and 2019 Number of outages (per month) Outage losses (% annual sales) Share of elec. from generator (%) 10 30 12 25 10 8 20 8 6 6 15 4 4 10 2 2 5 2005 2010 2015 2020 2005 2010 2015 2020 2005 2010 2015 2020 All Manufacturing Services Source: World Bank Enterprise Surveys (http://www.enterprisesurveys.org). firms reported experiencing in a typical month, the losses accrued by the businesses due to these outages, and the share of electricity firms derived from a generator (acquired to mitigate outage risks) all fell significantly between 2006 and 2011. These gains appear to have been partially reversed (as of 2020) for the manufacturing sector (as shown in figure 7), even as the services sector continued to show performance improvements through 2020, although at a slower pace.2 Enterprise survey data from other sources are also consistent with these trends. For example, figure 7 illustrates enterprises’ self-reported rankings of different organizational barriers and constraints by their impact on formal businesses. The factor ranking shown in the figure is for 2017 and is based on data from the National Institute of Statistics of Rwanda. Nearly 80 percent of enterprises reported having “no problem” related to the availability of electricity in that year, and only about 7 percent reported that electricity posed a “serious problem” or “very serious problem” for their operations. It is worth noting that enterprise size had an influence on the extent to which electricity availability was reported to be a concern for formal enterprises (figure 8). In particular, larger enterprises were somewhat more likely to report facing problems with electricity availability. That said, even among this subgroup of enterprise-level respondents, nearly 75 percent indicated that the availability of electricity was not a concern for their businesses. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 31 FIGURE 7 Ranking of Factors by the Extent of Their Impact on Formal Businesses 100 90 80 70 60 50 40 30 20 10 0 ns t nd g s er ity s n e ry or en tie m n ac tio at ne io ab ic ki la le nm li sp tr ec w at n ci hi ob ll of ba ec ic fa nn of g ca ac ro pr y un n el or lit rt ni vi m y o ki lit of g c m po en bi ch or ce d tin et bi m la an y w ns te ry an la rn lit ke ai co of ra to ai or bi s Av te fin ar le ol Av t la la y In ed Te M to of lit gu e ai bl bi ill Av of y Re da lit sk la y ai bi or lit of Av la bi aff y ai la lit Av of ai bi Av la y lit ai bi Av la ai Av No problem Minor problem Serious problem Very serious problem Not applicable Source: Adapted from the National Institute of Statistics of Rwanda (2017c). FIGURE 8 Impact of Electricity Availability on Formal Enterprises (%) 100 86 79 78 80 74 60 40 16 19 20 12 13 4 4 3 2 5 3 4 1 0 No problem Minor problem Serious problem Very serious problem Micro Small Medium Large Source: Adapted from the National Institute of Statistics of Rwanda (2017c). 32 discussion Meanwhile, a key limitation of these data sources is that they focus exclusively on subsets of firms. The World Bank Enterprise Survey, for example, targets formal (registered) companies with five or more employees for interviews. While the Integrated Business Enterprise Survey conducted by the National Institute of Statistics of Rwanda does sample informal firms, data on certain metrics (e.g., the extent to which electricity access is a challenge for business operations) are available only for formal enterprises. These data sources also exclude enterprises working in agriculture or related sectors. This selective focus of the enterprise surveys likely does not provide a comprehensive picture of the evolving electricity access situation for most Rwandan enterprises. For example, in 2017, Rwanda had an estimated 13,244 formal and over 135,000 informal enterprises (National Institute of Statistics of Rwanda 2017c). It is possible that the extent to which electricity access is a constraint for this latter group of enterprises differs considerably from what is reported here. Lastly, jobs appear to have been created mainly in relatively less electricity-intensive sectors in Rwanda between 2017 and 2020. Over 75 percent of the approximately 600,000 jobs created over this period were in the agriculture sector, which accounts for only 2 percent of the total electricity consumption in the African context (Shirley 2020). Indeed, the share of employment in agriculture, forestry, and fishing increased between 2017 and 2020, whereas employment shares declined in manufacturing or construction. Given that agriculture, forestry, and fishing is a relatively less energy-intensive sector than either manufacturing or construction, underlying improvements in electricity services are likely to have had only a limited impact on the creation of these jobs, even as employment increased, albeit at a lower rate, in manufacturing, construction, and so on. Firm-level employment trends are broadly consistent with these patterns. Figure 9 shows that the share of firms adding jobs fell sharply from approximately 85 percent in 2006 to 60 percent in 2011 (left panel) but more than 62 percent of firms were nevertheless adding jobs in 2019. Disaggregating by services and manufacturing firms shows that a larger share of services firms added jobs in 2019 relative to 2011. The share of enterprises adding jobs in 2019 was thus slight slightly higher than in 2011. The share of firms reducing jobs remained relatively flat throughout (center panel). Most importantly, the rate of change in net employment, while positive, remained stable during this period (right panel)—due primarily to smaller firms reporting they were no longer adding jobs, as indicated by the analyses of World Bank Enterprise Survey data. Taken together, these patterns suggest that improvements in electricity services likely had a limited impact on the observed shifts in employment. It is also worth noting that the absence of a marked increase in employment in relatively electricity-intensive sectors is also broadly consistent with the approach to carrying out electricity tariff reforms in Rwanda. Specifically, the electricity tariff regime established in 2017 as part of implementation of the required Prior Actions for the DPO sought to incentivize electricity use among low-income/low-usage customers (i.e., those using less than 15 kWh per month). These “lifeline” tariffs for consumers using less energy are unlikely to have generated large employment impacts given the size of the “lifeline” consumption block. There were also tariff reductions for medium and large enterprises, although, as noted above, the data suggest that employment changes were not concentrated in those sectors. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 33 FIGURE 9 Job Creation Patterns in the Private Sector, 2006, 2011, and 2019 Percent of firms that added jobs Percent of firms that reduced jobs Net percent employment change 80 80 80 60 60 60 % 40 40 40 20 20 20 0 0 0 2005 2010 2015 2020 2005 2010 2015 2020 2005 2010 2015 2020 All Manufacturing Services Source: World Bank Enterprise Surveys (http://www.enterprisesurveys.org). Endnotes That said, the foundation for the off-grid market laid through the DPO series appears to 1.  have helped in its rapid expansion in subsequent years. For example, quarterly reports from the Rwanda Renewable Energy Fund project, the largest driver of off-grid solar home systems in Rwanda, show that the number of solar home system connections supported by Window-5 increased from 28,328 in Q3 2021 to 131,712 in Q2 2022 (Window-5 is the subsidy window that was launched in fall 2020, building on the planning and policy work supported through the DPO series) (Development Bank of Rwanda 2021, 2022). This nearly fivefold expansion likely helped Rwanda move toward achieving the 2021 electrification rate target, and would have required employment of several sales and support staff. While the magnitude of this employment increase is limited compared with national employment numbers, these employment shifts are more directly attributable to the DPO series. See appendix B for a descriptive analysis of the extent to which electricity is a reported 2.  obstacle for firms engaged in activities related to accommodation and food services (i.e., restaurants and hotels). As shown in table 5, this sector accounts for approximately 11 percent of the observed job creation between 2017 and 2020. 34 discussion SIX CONCLUSION In 2017, the World Bank initiated a series of three successive DPOs in Rwanda to support the government’s program to make the power sector more efficient. This case study examines the relation between employment outcomes and DPO-supported reforms for improving the power sector’s operational efficiency and increasing access to electricity. This case study analyzes existing administrative and secondary data on the power sector, employment, and establishment/enterprise outcomes. This is complemented by insights from a series of interviews with key stakeholders and potential beneficiaries. The findings from the analyses of the above data suggest that the DPO-supported reforms coincided with continued growth in the electricity sector and improvements in its performance. Installed generation capacity, for example, increased substantially in the lead-up to the approval of the first DPO, with subsequent increases sustained beyond 2017, albeit at a slower pace.1 Similarly, analyses of power sector data show evidence of substantial improvements in electricity quality, potentially as a result of Prior Actions carried out in the lead-up to the approval of the first DPO, with substantial decreases in the reported frequency of annual outages, as well as a smaller reduction in the annual duration of outages. These improvements in electricity quality were broadly sustained beyond 2017. Finally, access to electricity increased by approximately 13 percentage points between 2017 and 2020, in line with the 14 percentage point increase in electrification rate in the previous three years. While access to off-grid and mini grid electricity sources appeared to have increased at a slow pace, the DPO series exceeded the targets pertaining to grid connectivity (World Bank 2022c). While the DPO-supported reforms do appear to have improved electricity quality, it is less clear that these changes resulted in improved employment outcomes. To be clear, job creation and improvements in labor market outcomes were not objectives for the DPO series. The analyses conducted as part of this case study, however, present a valuable opportunity to assess the extent to which underlying changes in access to electricity services and the quality of those services may have impacted labor outcomes over time, especially since more and better jobs are often thought of as a benefit of improved access to modern energy services (IRENA 2020). In this regard, this case study finds that there is mixed evidence on the relation between job creation and improvements in electricity capacity, access, and quality over the period covered by the DPO-supported reforms. For example, while the case study finds some evidence of improvements in labor market outcomes during this period, jobs appear to have been created primarily in the agriculture, forestry, and fishing sector. Despite an increase in the number of workers employed in manufacturing (where one might expect to see the largest positive employment impacts due to underlying improvements in electricity), the sector had a dwindling share in total employment over the period covered by this case study. Taken together with the evidence on key energy indicators, this suggests that the reforms supported by the DPO series had a relatively limited impact on employment outcomes despite large improvements in power quality and availability, as well as improvements in access and generation capacity. Data from the Rwandan Enterprise Survey suggest that constraints other than electricity (e.g., access to finance) may be key inhibitors of firms’ growth and JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 37 employment expansion in the country. At the same time, energy intensity may also be related to capital deepening and increased labor productivity rather than labor deepening. Improvements in electricity services thus appear to not have resulted in a comparable expansion in employment. Finally, given that the DPO-supported reforms appear to be linked with continued improvements in the power sector’s performance, it is possible that sufficient time has not yet elapsed for these electricity infrastructure improvements to materialize into employment outcomes. It is worth noting the four main limitations of this case study. First, note that these analyses are limited by the fact they are based on extant data and simple pre-post comparisons. It is possible that the outcomes in 2019 (the final year of outcomes for the analysis of firm-level electricity sector outcomes) and 2020 (the final year for labor market outcomes) were negatively impacted by factors other than the electricity sector reforms. If so, this would result in an underestimate of the degree to which the reforms were associated with improvements in outcomes for the electricity sector and labor market. Although there is no reason to believe that this is the case, the possibility should be kept in mind when interpreting these results. Second, as mentioned above, it is possible that employment benefits associated with the DPO series accrue over a longer time period. For example, the broader evidence based on the impacts of household electrification on labor market outcomes is mixed (Lee, Miguel, and Wolfram 2020). This suggests that contextual factors (including the time elapsed since the intervention in question) play a key role in influencing the magnitude of the observed effects. The data available for this case study are not conducive to exploring longer-term trends for outcomes of interest. Third, the data used for the analyses do not provide the means to distinguish the different ways in which the DPO series could have impacted employment. Specifically, the DPO series could have impacted national employment trends by (1) improving electricity services and thus supporting the expansion and hiring of firms and household enterprises; (2) reducing the need for fiscal transfers to the power sector as a result of increased utility cost recovery and revenues generated due to power sector reforms, thereby increasing the potential for productive public investments in other domains; and (3) directly providing additional resources to the GoR as part of the DPO series, which further enables productive investments. National and sectoral employment trends capture the aggregate change associated with all three pathways, without necessarily shedding light on the relative importance of any single pathway. A review of data from the Ministry of Finance and Economic Planning (2022), for instance, provides suggestive evidence that the period coinciding with the DPO series’ approval coincided with an uptick in capital expenditures, consistent with the last two of the three hypothesized employment impact pathways. Finally, several of the establishment- and enterprise-level data sets used for the descriptive analyses presented in this case study focused primarily on formal firms. These would omit potential expansions in productive uses of power associated with informal jobs and establishments. 38 conclusion Revised Theory of Change Figure 10 presents a revised version of the original theory of change for the DPO series (shown in figure 1). The modified theory of change more explicitly delineates the causal pathways linking the DPO series–supported reforms and investments with expected changes in employment (namely, induced jobs). Specifically, the modified theory of change begins with an overview of the Prior Actions associated with both Pillars A and B of the DPO series, which are required to be completed in advance of each DPO’s approval. These Prior Actions consist of sets of activities designed to meet pillar-specific objectives.2 For example, in line with Pillar A’s goal of containing the electricity sector’s fiscal impact, the related Prior Actions entailed tariff reforms (including introduction of time-of-use tariffs for selected consumers and the adoption of a quarterly tariff adjustment policy) as well as the development of short- and medium-term budget projections so as to facilitate multiyear fiscal planning for the energy sector. Together, these resulted in the introduction of a new tariff schedule that is designed to increase utility cost recovery and revenues and lower the level of subsidies needed for the electricity sector. The theory of change shown in figure 10 highlights the two main pathways through which the DPO series may have been linked to economywide employment impacts. First, by lowering the level of subsidies necessary for the electricity sector primarily under Pillar A (partially supported by Pillars B.3 and B.4), the DPO series aimed to increase fiscal resources available for capital and social sector investments in other sectors of the economy. Capital investments (e.g., the construction of non-electricity-sector productive infrastructure, such as roads) could result in employment associated with construction in the short to medium term. Social sector investments (e.g., to improve the quality of secondary education through teacher training programs) could increase the productivity of the labor force, which could increase their potential for employment in the longer term. Assuming increased public spending enhances growth, investments of both types could result in higher economic growth and increased demand for labor in the longer term. This could result in higher wages and employment. In the context of this case study, it was not possible to conclude the economywide employment impacts of reducing the electricity sector’s fiscal impact. To do so would have required evidence regarding how government savings were reinvested in the economy. Such evidence was not available at the time of writing the case study. However, this causal pathway is still mapped in the theory of change. The second pathway through which the DPO series was linked to economywide employment impacts relates to the Prior Actions primarily undertaken under Pillar B. The pathway highlights the impacts of improving the operational efficiency, affordability, and accountability of electricity services. Specifically, this pathway shows how the quantity and range of possible goods and services produced and provided by households and enterprises, and in turn labor productivity, can be enhanced through increased access to affordable and reliable electricity via different sets of reforms and investments (specifically, those under Pillars B.1, B.2 and B.4). These, in turn, result in the creation of new enterprises and expansion of existing enterprises, resulting in higher wages and employment. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 39 FIGURE 10 Revised Theory of Change for the DPO Series (to Account for Employment Impacts) Prior Actions Activities Outputs Intermediate Outcomes Pillar A: Contain fiscal impact of the electricity sector • Tariffs rationalized for selected A Tariff reforms consumers (e.g., time-of-use tariffs) New tariff Increased utility cost • Quarterly tariff-adjustment policy categories recovery/revenues introduced introduced Multi-year fiscal planning • Short- and medium-term budget for the energy sector projections for National Electrification Plan developed Pillar B: Improve the operational efficiency, affordability, and accountability of electricity services • Increased competitive procurement New of power and private-sector-owned generation Average cost of service B.1 Least cost generation generation infrastructure and declines planning and regional • Increased investment in least-cost transmission trade generation options (e.g., hydro, projects are geothermal) consistent • Increased alignment of domestic Increase in systemwide PPP Law and with the regulatory framework with regional electricity reliability competitive procurement LCPDP, PPP of generation PPPs electricity trade needs Law, and • Integration of GHG emissions- competitive reduction commitments in electricity- procurement Increase in generation sector planning procedures capacity • Tariffs lowered for low-volume B.2 Lifeline tariff and customers and upfront connection Grid affordable connections fees eliminated extension Increase in and mini grid electrified • Universal electrification policy using development business Least cost electrification both least-cost grid extension and off- and planning grid solutions adopted agricultural • National standards for solar home Tariffs lowered customers Off-grid solar product systems adopted standards for low-volume • Incentive scheme to enhance customers and Increase in affordability of off-grid solutions upfront electrified Mini-grid specifications launched connection household and investment guidelines • Mini-grid licensing framework fees eliminated customers reformed • IFRS- Fiscal resources • Financial reporting of REG and its available to subsidize compliant B.3 affiliates consolidated lifeline tariff and Transition to IFRS financial • Reporting guidelines consistent with statements eliminate connection External audit and IFRS adopted published fees for low-volume publication of financial • Independent audits of financial customers • Independent statements statements of REG and its affiliates audits mandated conducted • Pilot scheme for bulk metering to Plan for • Reduced electricity B.4 Commercial loss accurately measure system losses reduction of losses reduction and quality of launched commercial • Reduced service • Automated customer/bill management losses and frequency and launched improved duration of outages Modernized HR, • Competitive hiring processes adopted quality of supply • Increased reported operations, and IT • GIS unit fully staffed to enable spatial adopted customer infrastructure data collection satisfaction WB-supported action Induced jobs Assumptions Source: Adapted from the theory of change outlined by the World Bank (2019). Summaries of activities are based on a synthesis of program descriptions provided by the World Bank (2017, 2018, 2019, 2022c). Note: “High-tier” and “Tier 3+” refer to the World Bank’s Multi-Tier Framework, which expresses access to energy as a spectrum of service levels experienced by households and businesses. DPO = Development Policy Operation; GDP = gross domestic product; GHG = greenhouse gas; GIS = Geographic Information System; HR = human resources; IFRS = International Financial Reporting Standards; IPP = independent power producer; IT = information technology; LCPDP = Least-Cost Power Development Plan; PDO = Project Development Objective; PPP = public-private partnership; REG = Rwanda Energy Group; WB = World Bank. Beneficiary/PDO- Outcomes Impacts level indicators • Increased public (productive) capital investments, resulting in short-/medium-term Contain electricity employment Lower fiscal subsidies as a • Increased social sector transfers to percentage of investments, resulting in electricity sector GDP more productive labor force Increased Economic growth and increased public spending labor demand is growth- enhancing • Electricity affordability is main binding Higher wages constraint and • Electricity and labor employment Lower per-unit are complements Enable fiscally electricity costs Transition to sustainable expansion for firms, Creation of new least-cost and of electricity services agricultural enterprise and low-carbon in Rwanda. producers, and Rising incomes expansion of energy mix boost domestic home-based existing businesses demand for goods enterprises and services produced using additional electricity Support economic and industrial Access to Increase in development “high-tier” range of objectives of (Tier 3+) • Expansion of productive uses Rwanda electricity is quantity and Increase access of electricity main range of possible to affordable and binding goods and reliable electricity constraint services that can Switch to services be produced by electric appliances and households and Free up fiscal machinery for enterprises resources for productive uses human capital • Increased labor development Appliances/machinery productivity to enable productive uses of electricity are available and affordable Increase in Achieve REG’s ability to Electricity Rwanda’s Improve attract private reliability is commitment to accountability and and commercial main binding the Paris transparency of finance as constraint Climate REG offtake for IPPs Agreement and as commercial borrower Improve Increased utility operational revenues efficiency and quality of electrical Greater reliability of services power supply JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 41 It is worth underscoring that the links between Prior Actions and employment impacts under the second pathway are distinct for each subcomponent of Pillar B. For example, under Pillar B.1 (which aimed to foster a transition to a least-cost, low-carbon energy mix), the Prior Actions entailed the development and adoption of the Least-Cost Power Development Plan, the public-private partnership law, and competitive procurement procedures, resulting in investments in least-cost electricity infrastructure. This would reduce the average cost of services and lower per-unit electricity costs for firms, agricultural producers, and home- based businesses. This increased affordability of electricity could expand the quantity and range of goods and services that can be produced, and increase labor productivity, since it could enable a shift to use of electricity for tasks for which it was earlier prohibitively expensive. By contrast, under Pillar B.4 (which aimed to improve electricity services’ operational efficiency and quality), the Prior Actions entailed the development and adoption of a plan for reducing commercial losses and improving service quality (for example, through bulk metering to improve measurement and monitoring of system losses). This could reduce the frequency and duration of outages. This increased reliability of power supply could similarly expand the quantity and range of goods and services that can be produced, and increase labor productivity, considering it could enable the use of electricity for productive uses for which electricity was previously inefficient. Across these two main pathways, the theory of change in figure 10 also highlights key assumptions that must hold for the expected causal links between Prior Actions and employment impacts to be valid. For example, enterprises’ and households’ ability to produce and provide an expanded range of goods and services will be unlikely to lead to the creation or expansion of new/existing enterprises if there is no demand for those goods and services in the first place. Similarly, if the reliability of available electricity services is not the main binding constraint for households and enterprises, then reliability improvements enabled by the DPOs will be unlikely to lead to changes in labor productivity. Note that the underlying assumptions associated with the causal pathways in figure 10 are context dependent. Project teams should pay close attention to the relevance and validity of these and other assumptions when looking to design similar sets of interventions in other countries and contexts. Endnotes The slowdown is potentially due to the DPO series’ goal of ensuring that all generation 1.  and transmission infrastructure projects adhere to least-cost planning principles and comply with the adopted PPP law. The GoR, therefore, did not accept any new generation and transmission projects for implementation during 2018–20 (World Bank 2022c). It is worth underscoring that the activities linked to Prior Actions are to be undertaken 2.  by the country, not the World Bank. However, the World Bank can provide technical assistance to support these efforts. 42 conclusion References Abeberese, Ama Baafra. 2017. “Electricity Cost and Firm Performance: Evidence from India.” The Review of Economics and Statistics 99 (5): 839–52. Baxter, Mallory, Arnaud Dyèvre, and Sachin Gathani. 2015. “Youth Employment in Rwanda: A Scoping Paper.” International Development Research Centre, Ottawa, Canada. http:// hdl.handle.net/10625/57792. Development Bank of Rwanda. 2021. Renewable Energy Fund Project Quarterly Implementation Status Report: July 1st–September 30th, 2021 (Q3, 2021). Kigali, Rwanda: Development Bank of Rwanda. Development Bank of Rwanda. 2022. Renewable Energy Fund Project Quarterly Implementation Status Report: April 1st–June 30th, 2022 (Q2, 2022). Kigali, Rwanda: Development Bank of Rwanda. EDCL (Energy Development Corporation Limited). 2021. “A Concept Note on the Rwanda National Electrification Plan (NEP)—2021 Revision.” https://www.reg.rw/fileadmin/ NEP_2021_Revision_Concept_Note.pdf. Government of Rwanda. 2017. 7 Years Government Programme: National Strategy for Transformation (NST1) 2017–2024.” Kigali: Government of Rwanda. https:// www.nirda.gov.rw/uploads/tx_dce/National_Strategy_For_Trsansformation_-NST1- min.pdf. ILO (International Labour Organization). 2004 “International Standard Classification of Occupations.” https://www.ilo.org/public/english/bureau/stat/isco/isco88/9.htm. ILO. N.d. “Time-Related Underemployment.” https://www.ilo.org.mcas.ms/wcmsp5/ groups/public/---dgreports/---stat/documents/publication/wcms_422452.pdf?McasCtx= 4&McasTsid=20892 IRENA (International Renewable Energy Agency). 2020. Tracking SDG 7: The Energy Progress Report 2020. Abu Dhabi: IRENA. https://irena.org/-/media/Files/IRENA/Agency/ Publication/2020/May/SDG7Tracking_Energy_Progress_2020.pdf. Kaberuka, Donald. 2000. Rwanda Vision 2020. Kigali: Ministry of Finance and Economic Planning, Republic of Rwanda. https://repositories.lib.utexas.edu/bitstream/handle/ 2152/5071/4164.pdf. Kassem, Dana. 2021. “Does Electrification Cause Industrial Development? Grid Expansion and Firm Turnover in Indonesia.” CRC TR 224 Discussion Paper Series no. 052, University of Bonn and University of Mannheim, Germany. Lee, Kenneth, Edward Miguel, and Catherine Wolfram. 2020. “Does Household Electrification Supercharge Economic Development?” Journal of Economic Perspectives 34 (1): 122–44. Ministry of Finance and Economic Planning. 2022. “Updated Macro Framework Public Dataset: July 2022.” https://www.minecofin.gov.rw/publications/data. National Institute of Statistics of Rwanda. 2017a. Establishment Census Report 2017. Kigali: National Institute of Statistics of Rwanda. https://statistics.gov.rw/publication/ establishment-census-report-2017. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 43 National Institute of Statistics of Rwanda. 2017b. Labour Force Survey Report 2017. Kigali: National Institute of Statistics of Rwanda. https://www.statistics.gov.rw/publication/ labour-force-survey-report-august-2017. National Institute of Statistics of Rwanda. 2017c. “Integrated Enterprise Survey 2017.” https://www.statistics.gov.rw/datasource/integrated-enterprise-survey-2017. National Institute of Statistics of Rwanda. 2021. “GDP National Accounts, 2020.” https:// www.statistics.gov.rw/publication/gdp-national-accounts-2020. National Institute of Statistics of Rwanda. N.d.(a). “Labor Force Survey.” https://www. statistics.gov.rw/datasource/labour-force-survey-0. National Institute of Statistics of Rwanda. N.d.(b). “Establishment Census.” https://www. statistics.gov.rw/datasource/establishment-census. REG (Rwanda Energy Group). 2019a. The National Electrification Plan: Report on Definition of Technologies (on-grid and off-grid) at Village Level. Kigali: REG. http://www.reg.rw/fileadmin/ user_upload/Task_Design_of_the_National_Electrification_Plan_in%20Rwanda_Report.pdf. REG. 2019b. Rwanda Energy Group Strategic Plan 2019–2024. Kigali: REG. https://www.reg.rw/ fileadmin/user_upload/REG_Strategic_plan.pdf. REG. 2022. “About Us—History.” https://www.reg.rw/about-us/history/. Shirley, Rebekah. 2020. “Powering Agriculture: Unlocking Africa’s Next Green Revolution.” South African Institute of International Affairs, September 25, 2020. https://saiia.org.za/ research/powering-agriculture-unlocking-africas-next-green-revolution/. UN (United Nations). 2021. “Total Electricity.” Energy Statistics database. http://data.un.org/ Data.aspx?d=EDATA&f=cmID%3aEL. USAID (United States Agency for International Development). 2019. “Off-Grid Solar Energy Market Rwanda: Summary Version of the 2019 Power Africa Off-Grid Solar Market Assessment Report.” https://2017-2020.usaid.gov/sites/default/files/documents/1860/ PAOP-Market-Assessment-Brief-Rwanda-English.pdf. World Bank. 2017. Project Appraisal Document to the Republic of Rwanda for a First Programmatic Energy Sector Development Policy Financing. Washington, DC: World Bank. World Bank. 2018. “Program Information Document: Second Rwanda Energy Sector Development Policy Operation.” World Bank, Washington, DC. World Bank. 2019. International Development Association Program Document for a Proposed Development Policy Credit in the Amount of SDR 90 Million (US$125 million equivalent) to the Republic of Rwanda for a Third Rwanda Energy Sector Development Policy Financing. Washington, DC: World Bank. https://documents1.worldbank.org/curated/en/139261567389640856/pdf/ Rwanda-Third-Rwanda-Energy-Sector-Development-Policy-Financing-Project.pdf. World Bank. 2020a. “GDP per Capita (current US$)—Rwanda.” https://data.worldbank.org/ indicator/NY.GDP.PCAP.CD?end=2017&locations=RW&start=2006. World Bank. 2020b. “Agriculture, Forestry, and Fishing, Value Added (% of GDP)—Rwanda.” https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS?locations=RW. World Bank. 2020c. Bolstering Poverty Reduction in Rwanda: A Poverty Assessment. Washington, DC: World Bank. World Bank. 2022a. “Development Policy Financing.” https://www.worldbank.org/en/ what-we-do/products-and-services/financing-instruments/development-policy- financing. 44 References World Bank. 2022b. “World Bank Enterprise Surveys.” http://www.enterprisesurveys.org/. World Bank. 2022c. Implementation Completion and Results Report on a Series of Four Credits in the Amount of SDR 268.1/EUR 94.1 Million (US$ 475 million equivalent) to the Republic of Rwanda for a/the First Programmatic Energy Sector Development Policy Financing, Second Rwanda Energy Sector Development Policy Financing, Third Rwanda Development Policy Financing, and Energy Sector Supplement Development Policy Financing. Washington, DC: World Bank. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 45 APPENDIX A Supporting Tables TABLE A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators PRIOR DESCRIPTION OF PRIOR ACTION RESULTS INDICATOR BASELINE TARGET ACTION Pillar A: Contain the fiscal impact of the electricity sector 1.1 The REG Board of Directors approved Results Indicator A1: FY2016/17: 1.4% of GDP FY2020/21: No more the assessment of the REG’s and its Contain electricity than 1.5% of GDP affiliate companies’ current revenue subsidies as a requirement contained in the REG percentage of GDP Strategic Plan 2017–2026 and began an independent review of said assessment. 2.1 (a) REG has approved the results of an efficient revenue requirement study, piloting the use of efficiency benchmarks in the determination of the revenue requirement trajectory toward cost recovery; (b) RURA has implemented new electricity tariffs effective August 13, 2018, introducing new tariff categories and rationalized tariffs for selected consumers. 2.2 MININFRA and MINECOFIN have jointly Results Indicator A2: FY2016/17: No FY2020/21: Yes (a) adopted options to achieve fiscal Implement quarterly sustainability for the electricity sector tariff adjustment and contain budget transfers to the electricity sector in the medium term, and (b) submitted the results to the Economic Cluster. 3.1 The Economic Cluster has approved a medium-term trajectory for fiscal transfers to REG and measures to stay within the budget envelope; this include a financing plan for national electrification prioritizing private financing for off-grid solutions, a commitment to implementing quarterly tariff adjustment policy, and a decision to pursue a partial listing of EUCL on a stock exchange. (continues) 46 Appendix A TABLE A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators (Continued) PRIOR DESCRIPTION OF PRIOR ACTION RESULTS INDICATOR BASELINE TARGET ACTION Pillar B: Improve the operational efficiency, affordability, and accountability of electricity services B.1: Transition to a least-cost, low-carbon energy mix 1.2 The REG Board of Directors approved Results Indicator B1: September 2017: No December 2020: Yes the outline of the Sector Development Ensure all generation Investment Plan, which is based on the and transmission LCPDP. projects initiated or accepted by the 1.3 MININFRA adopted a resolution requiring government over the the LCPDP to be updated on an annual past 24 months are basis by REG. consistent with the LCPDP and comply 1.4 The Rwanda Development Board with the PPP law strengthened the capacity of its Strategic and competitive Investment Department through procurement (a) organizational restructuring of said procedures department, (b) the appointment of at least one PPP analyst, and (c) the certification on PPP matters of at least two staff of the Strategic Investment Department. 2.3 The Rwanda Development Board has approved guidelines for implementing the PPP Law of 2016, which mandates competitive procurement of private sector–owned electricity infrastructure, with the exception of mini grids that do not require offtaker agreements with the public sector. 2.4 MININFRA has adopted an updated Energy Sector Strategic Plan, covering the period 2017/18–2023/24, which is consistent with the LCPDP and the National Electrification Plan. 3.2 MININFRA has approved an updated LCPDP methodology that, among other things, incorporates the government’s commitments to reducing greenhouse gas emissions. 3.3 REG has approved new standard power purchase agreement clauses and a standardized risk allocation matrix, which are applicable to all future independent power producers to ensure adequate risk sharing between REG and private investors. 3.4 RURA has completed a review of its regulatory framework for cross-border electricity trade, which concluded that its grid code and licensing regulations are compatible with electricity trade in the East Africa Power Pool. (continues) TABLE A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators (Continued) PRIOR DESCRIPTION OF PRIOR ACTION RESULTS INDICATOR BASELINE TARGET ACTION B.2: Increase access to affordable and reliable electricity services 1.5 The REG Board of Directors (a) Results Indicator B2: September 2017: 40.7% December 2020: 61% approved the technical audit of Expand electrification nationwide (29.7% (38% on-grid and 23% the government’s approach to rate nationwide on-grid and 11% off-grid) off-grid) 2019: 42% electrification and (b) submitted it to (percentage of 2016: 21% among among female-headed MININFRA for approval. households) female-headed households households 1.6 RURA adopted a new electricity tariff schedule, which includes, among other things, time-of-use incentives, demand charges for large consumers, and lifeline tariffs for low-volume electricity consumers (consumption below 15 kilowatt-hours). 1.7 MININFRA approved a new connection policy that eliminates up-front payment of the full connection fee and allows said connection fee to be paid over time. 1.8 The Rwanda Standards Board issued and published in the official gazette the national standards consistent with the standards developed by the International Electrotechnical Commission for solar systems and MININFRA approved the Guidelines on Minimum Standards Requirements for Solar Home Systems to Support Off-Grid Standards Enforcement. 2.5 REG has approved the National Electrification Plan, which identifies principles for investments to achieve universal access by 2024 and close the gender access gap, and submitted it to MININFRA for approval. 2.6 MININFRA has (a) adopted procedures Results Indicator B3: June 2017: 16% December 2020: 25% for implementing investments in on- Expand electrification grid and off-grid electrification, and rate among rural (b) approved a grid extension plan that households (percentage is prepared in full accordance with the of households) least-cost options. 3.5 MININFRA has approved guidelines setting the minimum requirements for off-grid solutions that are consistent with international best practice to ensure off-grid solutions remain affordable in Rwanda. 3.6 REG has approved an incentive scheme to make off-grid solutions affordable for low-income households. 3.7 (a) RURA has updated the simplified licensing framework for mini grids that do not require an offtaker agreement with the public sector. (b) RURA has issued and published the technical specifications for mini grids. (c) MININFRA has approved the investment guidelines for mini grids. (continues) 48 Appendix A TABLE A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators (Continued) PRIOR DESCRIPTION OF PRIOR ACTION RESULTS INDICATOR BASELINE TARGET ACTION B.3: Improve accountability and transparency of REG 1.9 The REG Board of Directors (a) Results Indicator B4: September 2017: No December 2020: Yes endorsed the shift to consolidated Independent audits of financial reporting for the Group and REG, EDCL, and EUCL its affiliates, and the revision of the compliant with IFRS, chart of accounts in compliance with without qualifications IFRS requirements, and (b) approved and published within the road map toward compliance with the first two quarters of IFRS. the following year 2.7 The financial statements of EUCL for the year ended June 30, 2018, have been prepared according to IFRS and audited by an independent auditor. 3.8 (a) REG has completed its transition toward complying with IFRS, as evidenced by the independent auditor’s unqualified opinion on the financial statements of both REG and EUCL. (b) The REG Board of Directors has mandated the external audit and publication of the financial statements of REG, EDCL, and EUCL within the first quarter of the following financial year. B.4: Improve the operational efficiency and quality of electricity services 1.10 The REG (a) initiated the piloting of Results Indicator B5: FY2017/18: 22% FY2019/20: 19% the use of bulk metering to accurately Reduce total losses for measure system losses, and (b) the electricity sector approved a plan for commercial loss as a percentage of reduction for EUCL. electricity supply 1.11 MININFRA piloted the use of Results Indicator SAIDI (2017): 44 hours SAIDI (2020): 28 hours. competitive international hiring for B6: Reduce SAIFI (2017): 265 SAIFI (2020): 183.4 key staff in REG by (a) completing the average duration of competitive hiring of the new REG interruptions (SAIDI) chief executive officer and (b) initiating and average frequency the competitive hiring process for of interruptions (SAIFI) the appointment of a new REG chief financial officer. 2.8 REG has approved a strategy and the related operational procedures for improving commercial customers’ quality of service and the general quality of electricity supply. 2.9 (a) REG has fully staffed the GIS unit. (b) REG has revised the operational procedures for new connections to include GIS data collection for all new connections. (c) REG has approved the piloting of GIS data in the identification of grid faults and complaint resolution. (continues) JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 49 TABLE A.1 Prior Actions Under the Series of the Three Development Policy Operations and Related Results Indicators (Continued) PRIOR DESCRIPTION OF PRIOR ACTION RESULTS INDICATOR BASELINE TARGET ACTION 2.10 REG has adopted operational Results Indicator B7: 2017: No 2020: Yes procedures for efficient corporate Implement and publish planning and human resources. an annual customer satisfaction survey 3.9 REG has fully transitioned to automated customer and bill management using its new Integrated Business Management System. Source: World Bank 2019. Note: EDCL = Energy Development Corporation Limited; EUCL = Energy Utility Corporation Limited; GDP = gross domestic product; GIS = Geographic Information System; IFRS = International Financial Reporting Standards; LCPDP = Least-Cost Power Development Plan; PPP = public-private partnership; MINECOFIN = Ministry of Finance and Economic Planning; MININFRA = Ministry of Infrastructure; REG = Rwanda Energy Group; RURA = Rwanda Utilities Regulatory Authority; SAIDI = System Average Interruption Duration Index; SAIFI = System Average Interruption Frequency Index. TABLE A.2 Evolution of the Electricity Tariff Regime, 1994–2020 CATEGORIES ENERGY DEMAND CHARGE SERVICE EXCHANGE TARIFF CHARGE (RF/KVA/MONTH) CHARGE RATE US$ IN US$ (RF/KWH) (RF/MONTH) TO RF 1994 All customers 17 — — 142.71 0.12 1997 All customers 42 — — 2005 All customers 81.26 — — 2006 Industries 105 — 10,000 Others 112 — 500 July 1, 2012 Domestic 134 — 500 629.21 0.21 Industries From 23h00 96 — 0.15 to 7h00 From 7h00 126 — 0.20 to 17h00 From 17h00 168 0.27 to 23h00 September 1, Low-voltage 182 — — 726.71 0.25 2015 customers Medium- 126 — 123 0.17 voltage customers (continues) 50 Appendix A TABLE A.2 Evolution of the Electricity Tariff Regime, 1994–2020 (Continued) CATEGORIES ENERGY DEMAND CHARGE SERVICE EXCHANGE TARIFF CHARGE (RF/KVA/MONTH) CHARGE RATE US$ IN US$ (RF/KWH) (RF/MONTH) TO RF January 1, Residential 0–15 kWh 89 — -820.02 0.11 2017 15–50 kWh 182 — — 0.22 >50 kWh 189 — — 0.23 Nonresidential 0–100 kWh 189 — — 0.23 >100 kWh 192 — — 0.23 Small industries (£22,000 kWh) 126 — 3,125 0.15 Medium (22,000– 90 Peak Shoulder Off-peak 0.11 industries 660,000 kWh) 10,469.50 5,588.40 1,891.5 0.00 Large (>660,000 kWh) 83 7,184.40 4,004.20 1,085.9 0.10 industries August 13, Residential 0–15 kWh 89 — 863.96 0.10 2018 15–50 kWh 182 — 0.21 >50 kWh 210 0.24 Nonresidential 0–100 kWh 204 — 0.24 >100 kWh 222 0.26 Small (£22,000 kWh) 110 Peak Shoulder Off-peak 10,000 0.13 industries 11,017 4,008 1,691 10,000 0.00 Medium (22,000– 87 10,514 3,588 1,292 0.10 industries 660,000 kWh) Large (>660,000 kWh) 80  7,184 2,004  886 10,000 0.09 industries January 20, Residential 0–15 kWh 89 — 1,014.3 0.09 2020 15–50 kWh 212 — 0.21 >50 kWh 249 — 0.25 Nonresidential 0–100 kWh 227 — — 0.22 >100 kWh 255 — — 0.25 Small (£22,000 kWh) 134 Peak Shoulder Off-peak 10,000 0.13 industries 11,017 4,008 1,691 0.00 Medium (22,000– 103 10,514 3,588 1,292 0.10 industries 660,000 kWh) Large (>660,000 kWh) 94  7,184 2,004  886 0.09 industries Source: RURA. Note: kVA = kilovolt-ampere; kWh = kilowatt-hour. 52 TABLE A.3 Appendix A Disaggregation of Employed Population by Branch of Economic Activity, 2020 Versus 2017 SECTOR TOTAL TOTAL MALE FEMALE URBAN RURAL (% OF CORRESPONDING EMPLOYED POPULATION) 2017 2020 2017 2020 2017 2020 2017 2020 2017 2020 2017 2020 Employed population 2,959,965 3,568,934 100 100.0 1,690,031 1,945,487 1,269,934 1,623,448 814,394 907,654 2,145,571 2,661,280 Agriculture, forestry, and fishing 1,110,612 1,572,159 37.5% 44.1% 30.4% 37.1% 47.0% 52.4% 6.1% 5.8% 49.4% 57.1% Wholesale, retail trade, motor vehicle and motorcycle repair 492,486 423,371 16.6% 11.9% 14.2% 10.4% 19.9% 13.6% 23.7% 19.1% 13.9% 9.4% Construction 304,473 309,533 10.3% 8.7% 16.0% 12.3% 2.7% 4.3% 8.4% 7.7% 11.0% 9.0% Activities of households as employers 202,632 182,257 6.8% 5.1% 4.9% 3.5% 9.4% 7.1% 17.7% 15.7% 2.7% 1.5% Manufacturing 179,926 196,543 6.1% 5.5% 6.5% 5.5% 5.6% 5.5% 6.1% 6.4% 6.1% 5.2% Transportation and storage 119,181 156,807 4.0% 4.4% 6.9% 7.9% 0.3% 0.2% 6.8% 6.6% 3.0% 3.6% Education 116,713 127,276 3.9% 3.6% 4.0% 3.5% 3.8% 3.6% 4.6% 5.8% 3.7% 2.8% Public administration and defense 71,556 69,530 2.4% 1.9% 3.1% 2.5% 1.5% 1.2% 4.7% 5.0% 1.5% 0.9% Mining and quarrying 54,618 66,182 1.8% 1.9% 2.9% 3.1% 0.4% 0.3% 0.3% 0.4% 2.4% 2.3% Human health and social work activities 52,794 62,683 1.8% 1.8% 1.5% 1.4% 2.2% 2.2% 3.2% 5.0% 1.3% 0.7% Accommodation and food services activities 47,902 116,922 1.6% 3.3% 1.5% 2.9% 1.7% 3.8% 3.7% 4.9% 0.8% 2.7% Administrative and support services activities 30,247 72,661 1.0% 2.0% 1.2% 2.7% 0.8% 1.3% 2.2% 3.3% 0.6% 1.6% Professional, scientific, and technical activities 25,407 25,884 1.0% 0.7% 1.1% 0.8% 0.6% 0.6% 2.1% 2.4% 0.4% 0.2% Others 151,418 187,126 5.1% 5.2% 5.8% 6.3% 4.2% 3.9% 10.2% 11.8% 3.2% 3.0% APPENDIX B Exploring Electricity as a Constraint for Enterprises Engaged in Accommodation and Food Services Activities As shown in figure 6, between 2006 and 2011 (well before the policy actions supported by the Development Policy Operations [DPOs] were implemented), the share of Rwandan enterprises reporting electricity as the “biggest obstacle” for their businesses declined sharply. The share remained negligible in 2019. Access to finance and land, and tax rates imposed considerably heavier burdens on Rwandan enterprises. These patterns suggest that any underlying improvement in electricity quality or availability would unlikely lead to enterprises’ growth or employment expansion in Rwanda if these or other nonenergy constraints were binding for their growth. However, these economywide trends may mask sector-specific differences. Specifically, enterprises in sectors that experienced relatively significant growth in total employment between 2017 and 2020 (i.e., before and after the launch of the DPO series) may have benefited disproportionately from more recent improvements in power sector performance (e.g., improvements in reliability) during the period covered by the DPO series. This appendix explores this question in the context of enterprises engaged in accommodation and food services activities (i.e., restaurants and hotels). As shown in table 5, employment in this sector grew nearly 145 percent between 2017 and 2020, increasing from approximately 48,000 to 69,000 workers. This growth contributed over 11 percent of the total job creation over the same period (table 5). To assess trends in the reported constraints pertaining to electricity, enterprises listed as restaurants or hotels were identified based on sectoral characterization data gathered in the three available rounds of the World Bank Enterprise Survey (WBES) for Rwanda, which cover the years 2006, 2011, and 2019. In total, WBES contains 79, 46, and 79 enterprises in 2006, 2011, and 2019, respectively, that can be classified as such based on a comparison of industry classification across years. The share of enterprises reporting electricity as a “major obstacle” or a “very severe obstacle” was computed by limiting the data to only the aforementioned enterprises. These results revealed that, in 2006, approximately 53 percent of enterprises classified as restaurants or hotels reported that electricity was a “major obstacle” or a “very severe obstacle.” By 2011 (well before the approval of the first DPO), this figure had declined to 13 percent, and it remained relatively stable (at 14 percent) until 2019. While the WBES does not necessarily provide representative sector-/industry-level data, this pattern broadly matches figure 6, that is, the reported reduction in electricity as a stated obstacle for the operation of hotels/restaurants appears to have occurred between 2006 and 2011 (well before the DPO series). Between 2011 and 2019, the change in this reported obstacle is negligible. JOBS GENERATED BY THE RWANDA DEVELOPMENT POLICY OPERATIONS 53