Sentence Correction: Sentence vs. Clause vs. Fragment
That the distribution of donated computers to impoverished residents of developing countries will improve their lives it cannot be denied; many development experts believe, however, that donor nations should place priority on basic issues of infrastructure: clean water, affordable and clean energy, and access to food and sanitation.
This answer choice is grammatically incorrect as it has two subjects. The pronoun it is intended to be used as a subject replacement (such as "it is raining" or "it is warm") but the sentence already has a subject: (the idea) That the distribution [...] lives.
While this answer choice corrects the original grammatical mistake by placing it cannot be denied between commas, it creates a new grammatical mistake. Changing the conjugated verb will improve to the unconjugated verb improving denies the sentence of its conjugated verb, making it a fragment.
While this answer choice corrects the original grammaticalmistake, it creates a new one. Verb+ing (distributing) can be used as a noun replacement only when there's no actual noun. Since there is a real noun - distribution - it should be used.
While this answer choice corrects the original grammatical mistake, it creates a new one.
Placing the relative pronoun which before the conjugated verb will improve creates a relative clause (which will improve their lives) that modifies residents. As a result, the clause becomes a fragment, lacking a conjugated verb:
[Main clause: ] It cannot be denied that:
[Subordinate clause] the distribution of donated computers to impoverished residents of developing countries which will improve their lives;
Furthermore, this answer choice changes the original meaning of the sentence: the relative pronoun which refers to countries, indicating that the countries, rather than the computers, will improve the residents' lives.
This answer choice corrects the original mistake of two subjects by reorganizing the sentence, placing the phrase it cannot be denied before that.