This study investigates the problems and prospects of rural electrification in poor countries with the case study of Songo Songo Wayleave Villages Electrification Scheme (WVES) in Tanzania. WVES is one of the incentives of the project to the affected villages. However, this service will be provided commercially. This study examines the implication of this decision of providing electricity commercially in villages with deep and pervasive poverty. The socio-economic status of the communities, the demand, willingness and ability to pay for electricity services has been analysed. Findings show that although willingness to pay is high, the ability to pay (actual demand) is very low by the majority of the respondents; suggesting that application of TANESCO commercial tariffs to the project area would be a disincentive to many villagers. This decision will also have cost implications to the TANESCO’s installed facilities. It is recommended that special credit be provided to facilitate rural communities in WVES. Also, policy and decision makers should encourage production of broader range of renewable energies and production of micro-hydro energy sources that are both economic and affordable to rural communities.