Three ways of evaluating rural electrification projects are described: the financial appraisal, the economic appraisal and the socio-economic appraisal. These appraisals are respectively from the point of view of the electric utility, the national income and the national welfare.
Past experiences with project appraisal in Tanzania are critically assessed. A methodological framework for improved project appraisal is presented with emphasis on socio-economic benefit measurement. The three types of appraisal are applied in a constructive way to a Tanzanian case. Measures are formulated to solve the main bottlenecks, being ineffective electricity tariffs and low power factors.