Abstract:
One way of alleviating poverty is to promote modern energy access, in particularly, electricity.
In any country lack of electricity is one of the major impediments to growth and economic
development of rural economies. However, in the Ethiopian context there is a very limited
empirical study that has examined the causal relationship between the massively accomplish
rural electrification endeavors and poverty reduction. Advocates of RE suggested that it increase
the wellbeing of the society but some critics that it creates unequal social tension. The objectives
to determine impact of RE on households’ welfare: income, and education, the socio-economic
development of both on-farm and off-farm commercial activities and the level of poverty in the
area. This study has shown that the impact of electricity on reduction of poverty is positive and
significant. BY using PSM and OLS the impact of electricity access on household on farm income
is found to be insignificant and having the wrong sign. But, the result of the study revealed as
rural electrification affected educational attainment and off-farm income positively and
significantly. By using ATT nearest neighboring off farming income on the electrified area
70.2% more than on unelectrified kebele and 35 minutes more study time in electrified than
unelectrified. Due to its important and contribution all types of electrification used to reduce
poverty. The study addresses that this kind of study is essential to push the government body to
connect rural areas for the sustainable economic development.
