Haiti: "Open For Business"

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HAITI: OPEN forBUSINESS OCTOBRE 1st2009investment opportunities in renewable energiesDieuseul ANGLADE, eng.Director General Bureau of Mines and Energy International Business Meeting, Port-au-Prince, 1-2 October, 2009 BME

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Presentation PlanOverview ofthe energy SectorInvestment opportunitiesConclusion BME

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1. Overviewof the energy sectorHaiti energy “consumption” matrix(% TOE)Haiti energy “markets” matrix(USD)hydroOther petroleum fuelsPetroleumproducts25%WoodDiesel(380 M)Biomass (wood & charcoal)72%Wood-Charcoal(150 M)* Most wood-fuel consumed by SMEs (Moonshine, drycleaners, bakeries) BME

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1. Overview ofthe energy sectorThe energy demandTransportation, industry and domestic consumption380 000 tons de charcoal per year for families: a US$ 150 M market200 000 tons of wood in the SMEs : a US$ 60 M market130 millions gallons of diesel : a US$ 380 market BME

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2. Investment opportunities2.1Liquid fuels bio-fuels (biodiesel)Progressive substitution of 45 million gallons of diesel consumed by the thermal generators in power plants.130 million gallons of diesel consumed yearly.The telecommunications companies consume about 4% of the imported diesel. BME

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2. Investment opportunities2.2 Cooking energies WoodlotsProject of creation of woodlots in unused lands

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Substitution ofkeroseneReplacement of kerosene lamps with lighting by small PV systems in rural areas

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Briquette productionProduction ofbriquettes from waste/renewable sources of biomass as substitutes for wood & charcoal BME

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2. Investment opportunities2.1Wind EnergyLac Azuéï 10 km from P-au-P grid; 50 MW potential wind speeds : 5 to 7 m/s.Northern Haiti Near Cap-Haitien grid; 2 MW potential wind speed : 5 to 6 m/s.The preliminary study is being executed by 3E, a Belgian firm.Feasibility studies will be undertaken next. BME

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2. Investment opportunities2.3 SolarenergySolar panel assembly plants

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Small PV ruralsolar projectsFor lighting, pumping, seafood and vaccine conservation BME

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The energy marketis the second largest in Haiti after the food market. There are already good examples of successful public-private partnerships in the Haitian Energy Sector, where the Government has committed to buying all the power produced for 5 to 15 years: SOGENER, HAYTRAC, E-POWER3. Conclusions BME

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3. ConclusionsTheGovernment of the Republic of Haiti has also committing to the following actions :Elaboration and submission to the vote of Parliament a bill for the creation of the enabling framework for the acceleration of the use of renewable energy and the associated technologies ;Implementation of various forms of incentive mechanisms for the promotion of private sector investment in renewable energy (production and deployment); BME

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3. ConclusionsPursuingactions related to the development of biofuels, in particular: feasibility studies, R&D and the reinforcement of Public-Private partnerships;Carrying out a public awareness campaign for renewable energy, utilizing instruments designed to inform and motivate.HAITI IS WORKING HARD TO MAKE THE ENERGY SECTOR A GROWING AND SUSTAINABLE SECTOR BME

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THANK YOUDieuseul ANGLADE,Ing. Directeur General Bureau des Mines et de l’ÉnergieEmail : [email protected] Web site: www.bme.gouv.ht BME

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Rolando Gonzalez-BunsterIDB InternationalBusiness MeetingInvestment in Wind Power Generation from an International Investor’s PerspectiveInternational Business Meeting, Port-au-Prince, 1-2 October, 2009BasicEnergy

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Economic and CommercialAspectsCountry’s political situation should be stable and should present macroeconomic growth in the short term. Payment risk needs to be minimalCapital for these projects migrates very easily. If too much risk is perceived in a certain country and/or market, investors will identify alternate places to deploy their capital and develop similar projects where less risk is perceived.Long Term (15-20 yr) Power Purchase Agreements (“PPAs”) are a must to secure financing.Involvement of multilateral funding is highly desirable. Commercial financing in developing countries tends to be very short term with high interest rates which limits the possibilities to develop capital-intensive projects like wind power projects. Financing sources like IDB play a significant role in promoting these projects in developing countries. BasicEnergy

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Site SelectionInitial siteselection is a very methodical and technical exercise. Once a site is selected, significant time and resources need to be dedicated to research its feasibility.Wind atlases which contain macro wind measurements are not enough (these only provide general guidelines). Site-specific towers need to be erected in order to measure wind behavior for at least one (1) year.For financing purposes, these site-specific measuring towers need to be measure wind speeds at least 2/3rds the height of the expected hub height of the wind turbines (as high as 100+ meters).These measurements need to be validated by independent third partiesAn investor will typically invest in securing the site and purchasing wind turbines once the site is validated by site-specific wind measurements BasicEnergy

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PermittingToo much bureaucracyhinders project development. In countries where wind projects have not been developed, authorities are typically hesitant to fast-track permitting - this creates a barrier against developments. Other countries are competing for these projects and are willing to have more streamlined permitting processes. Permitting is required for financing, hence if the permitting process is not clear and streamlined, achieving financing can become challenging. A single point permitting window is highly desirable BasicEnergy

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Technical and ConstructionAspectsAvailable offloading ports are one of the early items that need to be identified when making an investment decision. The lack of proper infrastructure to offload the equipment from the ships could easily eliminate the chance for a successful project. Access to site from to the unloading point to the each of the towers’ location is also an important task that needs to be performed early on in the investment decision process.If too much investment is required due to: 1) poor road conditions; 2) tight curves that don’t allow blade transportation; or 3) Mountainous terrain; then project feasibility can be jeopardized.Access to grid as close to the site as possible. A long transmission line can increase project cost significantly and threaten the project’s feasibility.Terrain profile can influence balance of plant costsBasicEnergy

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Carbon CreditsAlthough thevariable costs of wind projects are minimal, the construction aspect is very capital-intensive. As such, power prices need to be high enough to repay the financing and allow for an acceptable return to the investor. Energy prices are typically not enough to allow for this. To solve this issue, carbon credits are one of the few lifelines to make projects feasible.The current Clean Development Mechanism (CDM) expires 2012. Difficult to predict carbon credit impact on a project’s economics post 2012.A wind project in Haiti would displace Diesel (no. 2) generation – this is a “cleaner” fuel than Coal or Heavy Fuel Oil which results in less carbon credits than the same project could generate in other countries with a “dirtier” energy matrix. BasicEnergy

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Thank You!Rolando GonzalesBunster, Basic EnergyBasicEnergy

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Prospects for Jatrophacurcascultivation in HaitiCHIBASInternational Business Meeting, Port-au-Prince, 1-2 October, 2009 CHIBAS

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Why Jatropha?Haiti presentlyimports over twice as much diesel fuel as gasoline (ethanol is a substitute of gasoline)Haiti heavily depends on diesel for the production of electricity Feedstock for ethanol production would compete for the best arable land; which is limitedEthanol would have a relatively small local marketOil processing and production of bio-diesel is scalablePlant oil can be used directly (for local electric power generation, mills, irrigation, and small industry)And Jatropha is potentially a multipurpose crop (reforestation & restoration of degraded land, biodiesel, SVO, charcoal briquettes, high protein animal feed and honey) CHIBAS

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Energy matrix (Market)>USD 350 M *% of energy mix (market)Tons of Oil Equivalent> USD 150 M > USD 60 M CHIBASThe market for Biodiesel* Most of the wood is not sold on the market

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Land availability forJatrophaHow much land can be usedto grow Jatropha ?Expected yields ?What are the profits from growing Jatropha ?Mapping the risks (red):Land use, environment,areas suitable for food crops,other socio-economic risks, etc…Land use map CHIBAS

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Land availability forJatrophaIn green: area where you can grow Jatropha with limiting the negative impacts.A: >800,000 haB: >500,000 haABThere is enough land to meet Haiti’s diesel market! CHIBAS

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A multipurpose cropThemarkets for JatrophaEdible JatrophaNon edible JatrophaOil & Biodiesel (liquid biofuels) 100 million gallons (280 M USD)Charcoal briquettes80,000 ton (23 M USD)

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High protein animalfeed550,000 ton (165 M USD)

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Honey12,000 ton (36M USD)

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Oil & Biodiesel(liquid biofuels)100 million gallons (280 M USD)

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Charcoal briquettes200,000 ton(60 M USD)

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Honey12,000 ton (36M USD) CHIBAS

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Working with smallholdersMaximizing profit along the value chainIntegrate small holders to the Jatropha value chainThere is an opportunity to develop a market chain integrating small holders and producers; one that is profitable to ALL the actors of the value chain (IDB market study)“LwilAgogo” – building strategic alliances along the value chainProfitable businesses integrating the small holders and producers CHIBAS

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CHIBAS at theservice of the local agro-industryCHIBAS will be improving, releasing and promoting the use of improved Jatropha varieties as multipurpose crops (food/feed and energy); CHIBAS is a technical center to serve the farmers and the agribusiness sector in getting access to the best and most adequate technology and the best agricultural practices; CHIBAS realizes feasibility studies to establish plans for the formulation of project designs (or projects) and investment strategies (including a complete sustainable and profitable value market chain assessment) maximizing incomes for the farmers and the local communities. CHIBAS

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Thank You!Gael Pressoir,CHIBAS, ExecutiveDirectorGeneticist & Plant [email protected]: gael_pressoirPhone: +509 3465 0449 CHIBAS

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Can the biodieselvaluechainbeanopportunityforPrivate Sector Investments in Haiti?Source: Biodiesel Value Chain Feasibility Study for Haiti – IDB and USAID/DEEDInternational Business Meeting, Port-au-Prince, 1-2 October, 2009 BID & USAID-DEED

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The study hasconsidered 3 lines of businessFARM BUSINESSJATROPHA PRODUCTION CENTER (JPC)BIODIESELJatropha pressingMachine to press jatrophaChemical plantCakeOilSolid fuel-pellet IDB & USAID-DEED

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The main productshave been consideredFARMJATROPHA PRODUCTION CENTERBIODIESELINDUSTRYGENETICR&DSEEDSNotes: Final products considered in the studyFinal products subject to more investigation but with potential% Shown as % of dry fruit. IDB & USAID-DEED

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Logical FrameworkOpportunity: Thereis a market

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Private Investments provide good returns 3A benefits are hugeStrategic Options for Haiti: Private Sector

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Public Sectorand Development agenciesScenario we can accomplish togetherChallenges: Entrepreneurship

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Regulation &Public Investments

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R&D bestcrops

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Focus ofdevelopment actors: arid/semi-arid lands IDB & USAID-DEED

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Income/ ha1 =$22965,000 ha700 ha6,500 haExcept for the small scale biodiesel plant, the three businesses present NPV positive in all scenariosVariation of NPVs according to oil prices and jatropha land productivityFarm business:NPV/ haJatropha Production Center businessNPV/ JPCBiodiesel business:NPV/ industrial plant1 Income in fifth yearAsumption:Diesel pumpprice in Haiti: $2,31 IDB & USAID-DEED

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$US2,5/gallon and 200gloil/ha seem to be the break-even point for the Haitian biodiesel businessVariation of NPVs according to oil prices and jatropha land productivity($US / gal)($US / gal)Break-even pointAssumptions: Diesel price at pump in Haiti

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Oilprice (JPC business):50% diesel price

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Jatrophadryfruit (Farmbusiness): 10%oilprice

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JPC businessincludespellets business($US / gal) IDB & USAID-DEED

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$1000-1150/ha238221022100Jobs35195260325032502600$447/haSalaryProfits65,000 ha700 ha6,500haThe economic impact in terms of development of each business is also significant in all scenarios analyzedFarm business:Income/ haJatropha Production Center businessIncome/ haBiodiesel business:Income / industrial plant IDB & USAID-DEED

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250,000 owners

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184,000-203,000 jobs(170,000approximately on the farms)

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Income percapita(1): > $460/ owner (=$2000/ owners with the JPC’s) > $220/ worker Environment:

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Replace the entirecharcoal market ($320M)

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Renewing arid landsfor fruit crops in the future450,000 jobsFor a scenario of 500,000 ha of jatropha planted, 450,000 jobs can be created. Also, $460 of income per year can be generated for a minimum of 250,000 producersVISION500,000HECTARESAttractive vision because: scheme of farm owners integrated with the JPC’s

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arid orsemi-arid land

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can possiblybe a transitory and complimentary culture

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efforts bothfocused and at a national scale(1) From the fifth years and on IDB & USAID-DEED

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Thank You!Eduardo Almeida,BID IDB & USAID-DEED

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Eucalyptus Project forBiomass ProductionInternational Business Meeting, Port-au-Prince, 1-2 October, 2009FGV - BID

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MethodologyAgroclimatic ZoningLandCapabilityFGV -BID

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Phase 1 –Land SuitabilityEucalyptusFGV - BID

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Eucalyptus in theWorldSource: ABRAF, 2007FGV - BID

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Haiti Energy MatrixAreaCovered by Forest: 3,8%Source: IEA. FGV - BID

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Biomass ProjectManufacturingBricketFirewood StoveFGV- BID

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Process of ForestProduction18 monthFGV - BID

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Forestry ProjectFGV -BID

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Forestry ProjectTotal area:6.000ha – 1.000ha per yearEarly plantingFirst harvestFGV - BID

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Biomass ProjectFGV -BID

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Total Investments perunit of 1.000ha, USDFGV - BID

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ANOTHER ALTERNATIVE OFBIOMASS: ELEPHANT GRASS Production cost of elephant grass= USD 20,00/tPlanting and harvesting in the same yearFGV - BID

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Thank You!Cleber Lima[email protected] - BID

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The Biodiesel HaitiprojectInternational Business Meeting, Port-au-Prince, 1-2 October, 2009 Biocarburants d’Haiti, SA

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Who we areBiocarburantsd’HaitiS.A.Haitian Corporation established in 2007

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Major stakeholders: 4local entrepreneurs: Reynold Roy, Reginald Noel, Georges Garnier, PascaleOriol

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Paid up capital: us $ 120,000

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Present activity: production of biodiesel on an experimental basis out of used vegetable oil collected from local restaurants

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Current production: 500gal /month sold to individuals Biocarburants d’Haiti, SA

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What do wewant to do ?Based on experience acquired over the past 2 years:Transform current activity into a biodiesel production project out of jatropha oil Biocarburants d’Haiti, SA

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How do wewant to do it?Phase 1 : use 1200 hectares of land located in plateau central and owned by one of the major stakeholders to plant jatropha.

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Phase 2 : encourage small farmers to participate in a jatropha plantation program (with the help of winner project usaid) Incentives will include: free seeds from our nurseries, technical assistance and a guaranteed purchase agreement at a pre approved price Biocarburants d’Haiti, SA

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Our production Goal: 1 Million gallons of biodieselPhase 1: 300 gal/ha/year for a total production : 360,000 gal of biodieselExpected time to full output : 3 yearsPhase 2: 640 000 gal out of jatropha plantations own by small farmersExpected time to full output: 3 years from end of phase 1 Biocarburants d’Haiti, SA

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Target MarketPrivate industrieswith electricity generation capacity (generators)currently 22 % of Haiti’ s diesel consumption or 25 M gal / year Biocarburants d’Haiti, SA

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What price?At today’s diesel price of $ 2.80 we expect to be 10 to 15 % cheaper

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At today’s price,sales at end of phase 2 will amount : $ 2.5 millions

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Expected netprofit on sales : 21 % Biocarburants d’Haiti, SA

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What is theestimated investment?2,8 Millions us $ for plant and related equipment as well as plantation program Biocarburants d’Haiti, SA

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What are welooking for in potential partners?Help in refining and completing project document

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Equity financing

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Assistance insecuring bank financing

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Technical, logistical andmanagerial support once project launched Biocarburants d’Haiti, SA

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Thank You!Reginald Noel,Biocarburants d’Haiti SA, [email protected] Biocarburants d’Haiti, SA

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WINECO-TEVASAEthanol plantInternational BusinessMeeting, Port-au-Prince, 1-2 October, 2009 TEVASA

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Terminal VarreuxWHARF SPECIFICATION DRAFT 11.0METERS FOR WHARF 9.8M FOR TANKERSLOA 190 METERS MAXFENDERS YOKOHAMALIST OF TANKS46,000 BBLS 1646,000 BBLS, WITH FLOATING ROOF 225,000 BBLS 217,500 BBLS 18,300 BBLS 4 TEVASA

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Caribbean Basin Initiative(CBI) TEVASAEthanol produced/processed in beneficiary countries are permitted to enter the US duty- free Ethanol has to originate from bio-mass sources and has to have undergone a full transformation process in the CBI countryTax saving of US 54 cents a gallon

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30 million gal.yeardehydration plant TEVASAIn full operation by mid 2010Expansion possible to 60 M galCorresponding tanks and infrastructure additions to accommodate the increased volume are planned

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30 million gal.yeardehydration plant TEVASAIn full operation by mid 2010Expansion possible to 60 M galCorresponding tanks and infrastructure additions to accommodate the increased volume are planned

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Processing ethanol forthe US market TEVASAFinal stages of negotiationsEthanol will originate from Brazil and after processing in Haiti it will be exported to US for further blending with gasoline

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Plant Layout TEVASA

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Thank You!Maulik Radia,TEVASA, Managing Director [email protected] TEVASA

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Renewable Energy Fora Better WorldTransforming Haïti’s energy challenges into wealth and job creating opportunitiesInternational Business Meeting, Port-au-Prince, 1-2 October, 2009 ENERSA

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COMPANY PROFILEHaïti’sonly designerand MANUFACTURER of solar panels and solar appliances

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Small, young,… butthe FASTEST GROWING solar company in the country (700% growth)

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Industry leader innumber of installations (in just over 2 years of operations)

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From 800 sqft, moving to new 10,000 sq ft facility

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Widest covered geographicarea

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58 towns &remote villages… and counting

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contracts in all10 departments of the countryIn very little time, we became the best local partner for nationwide solar projectsSocially responsible company

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Trained from scratch& employed so far 18 solar technicians (almost all of them youth from Cité Soleil)

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Investing in ourHuman Resources

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Investing in environmentalprojects

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Supporting youth initiatives ENERSA

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SOLAR as astrategic solutionHaïti in excellent radiation zone750,000 to 1M households without accessEstimated total PV installed : only 700 KwMaking PV affordable & accessible

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Reducing thecountry’s dependence on imported fossil fuel

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Creating jobsSo, we’rein the business of Socioeconomic Developmenthas an OVERALL installed capacity ofabout360 MWwhile HaïtiGermanyhas 10 times that, just in solar PV- 1,500 MW PV installed in 2008 aloneSpainInstalled 1,800 Mw PV in 2008 ENERSA

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MANUFACTURING as awealth creating optionSOLAR STREET LIGHTMARKET VALUE ADDED CHAINPV MARKET VALUE ADDED CHAINSi- FeedstockWaferSi- FeedstockCellWaferModuleCellManufacturing DivisionSolar applianceModuleBOSBOSInstallation DivisionInstallationInstallation43% 59% ENERSA

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OUR PRODUCTSNATIONAL TEAMWORKComponents from other Haïtian industrial companies as much as possibleSolar LampLight

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Radio

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Mobile phoneMobile phonechargerSTANDARD modelMobile phone chargerBELT model Solar Home System3 Lights

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Radio

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Mobile phoneMobile phonechargerBELT model plusSolar Module PS-X30W

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60W

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120WCHAJMANSmall BusinessMobile phoneCharging station ENERSA

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OTHER PRODUCTS &SERVICES MULTI Kw INSTALLATIONSVillage Mini Central Solar PlantSTRONG R&D DEPARTMENTHospital4 main focus:SecurityCostUser friendlyInstall. friendlyCustom design forspecific projectsCoffee Export CoopSolar Irrigation Pump ENERSA

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OUR MAIN SUCCESSSOLARSTREET LIGHT Theft proof

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hurricaneproof

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12hof light per night

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Fullyautomatic (ON/OFF)

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3days autonomy

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25%cheaper than imported

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Designed inHaïti

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Solar panelmade in Haïti

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LED lightbulb made in Haïti

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Pole madein Haïti ENERSA

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FINANCING HAÏTI’S SOLARREVOLUTON Consumer appliances

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OFF-Grid :

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Residential (SHS)

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Commercial /Institutional

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Stand-Alone UtilitiesECONOMICALLY VIABLE MARKET SEGMENTSINDUSTRY STRUCTURE FLOW CHARTGovernmentLocal component supplierMezzanine FinancingInventory LoanInstitutionsInstallation DivisionForeign component supplierManufacturing DivisionMicro BusinessHouseholdConsumerOther local installersMarket segmentsfinancing mechanism(credit / loan)$$$$ ENERSA

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5%15%-20%20% - 25%50% ( NOTE ABLE TO AFFORD )Opening solar market through proper financing mechanismSOLAR HOME SYSTEM MARKET POTENTIALECONOMICALLY VIABLE50% penetration potential with proper financing375,000 HH in Haïti$ 175 M market200 M HH worldwideCash able 1 – 3 year credit3 - 5 year creditNeed subsidySolar needs subsidies ?No…Not for all market segments ENERSA

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PROFITABLE solar company,but…Renewable Energy For a Better WorldOur Greatest Achievement?Changing people’s livesNO VILLAGE TOO REMOTE…COUNTING ON YOUR SUPPORTTHANK YOU ENERSA

Haiti: "Open For Business"

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