This paper uses a computable general equilibrium (CGE) microsimulation model to explore the
distributional and poverty-related effects of price reform in the electricity sector of Mali, a poor country
in West Africa. In the first part of the paper we analyze the distribution of electricity in Mali by income
deciles, showing that few poor households are connected to the electricity grid. We then apply a
sequential CGE microsimulation model to track the transmission mechanisms between increases in
electricity prices and changes in poverty and inequality among different household groups. Our results
show that direct price increases have a minimal effect on poverty and inequality, whereas the general
equilibrium effects of such increases are quite strong and negative. The compensating policies we tested
do not help those who lose from the pricing reform. In fact they amplify the negative effects.