Electrification, Productivity, and Value Addition: An Input-Output Analysis of Mini-Grids for Agro-Processing Clusters in the Lake Turkana Wind Power Corridor

{ "background": "The Lake Turkana Wind Power project has created a unique energy corridor in a historically underserved region. However, the potential for its generated power to stimulate local economic development, particularly through decentralised mini-grids for agro-processing, remains under-researched.", "purpose and objectives": "This study quantifies the impact of mini-grid electrification on the productivity and value addition of agro-processing clusters within the corridor. It aims to measure changes in output, inter-sectoral linkages, and household income resulting from enhanced energy access.", "methodology": "We employed a field-based input-output analysis. Primary data were collected from agro-processing enterprises and households in selected clusters. A linear regression model, $Yi = \\beta0 + \\beta1 Ei + \\mathbf{X}i'\\boldsymbol{\\beta} + \\epsiloni$, where $Ei$ is a binary electrification variable, was used to estimate productivity effects. Robust standard errors were calculated to account for heteroscedasticity.", "findings": "Electrified clusters demonstrated a 37% higher value-added per unit of raw agricultural input compared to non-electrified counterparts. The input-output multipliers for electrified agro-processing sectors were significantly higher, indicating stronger local economic linkages. The productivity coefficient ($\\beta1$) was positive and statistically significant at the 5% level.", "conclusion": "Targeted mini-grid deployment for productive use in agro-processing can catalyse significant local economic development within renewable energy corridors, transforming wind power infrastructure into a direct driver of rural industrialisation.", "recommendations": "Energy access policies should integrate targeted productive-use incentives and cluster development strategies. Financing models for mini-grids must prioritise anchor agro-processing businesses to maximise local economic multipliers.", "key words": "input-output analysis, mini-grids, agro-processing, rural electrification, economic multipliers, Lake Turkana", "contribution statement": "This paper provides the first empirical application of input-output analysis to quantify the economy-wide