How to Expand Rural Power Supply through Large-Scale Electrification (1966-1978)

Yim, Hong-Bin

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This case study examines the Republic of Korea’s Rural Electrification Project, which was carried out by the Korean government and Korea Electricity Power Corporation (KEPCO) between 1970 and 1987. The main purpose of this project was to achieve the nationwide electrification by offering long-term, low-interest loans. These loans were to be used for the construction of distribution facilities to rural residents who were regionally and financially disadvantaged, and not on large-scale transmission facilities, which would diminish return on investments. The Rural Electrification Project was a pioneering project intended to upgrade the education, culture, health, and hygiene in these areas, and was designed to develop the economy by increasing the productivity of these rural residents. As was originally planned, the electrification project made incredible progress in Korea within 10 years. Although there were still approximately 50,000 households without electricity on some islands and in remote regions, the project was galvanized again in 1983, leading to an electrification rate of 99.8 percent by 1987. This was deemed an impressive success.

The Rural Electrification Project greatly improved rural incomes with special crop cultivation and livestock businesses, which proved to be commercially successful. The achievements of Rural Electrification Project can be summarized

as economic effects that contributed to an increase in rural residents’ incomes, in addition to social effects that improved their quality of life and mental well-being. The economic effects refer to the economic benefits generated using electric power, such as the improvement of agricultural technologies that led to an increase in labor productivity, and income increases through rural factory operations. Improvements in agricultural productivity achieved using electricity were also noteworthy.

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KDI School of Public Policy and Management, World Bank
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