The same day René Préval was inaugurated as Haiti’s president for the second time in May 2006, a Venezuelan oil tanker appeared in the harbour of the capital, Port-au-Prince, bearing 10,000 barrels of oil, part of the Petrocaribe oil alliance with Venezuela. Entering into the alliance was Préval’s first official act as president.
For the tumultuous and impoverished Caribbean nation, which Préval had previously governed from 1996 to 2001, many hoped the agreement would be the first step in refounding its teetering power grid, diminished by years of corruption and political upheaval. Days-long blackouts have been a part of daily life in the country for years.
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It hasn’t quite turned out that way, however. Far from helping buttress the country’s resources, the Petrocaribe affair became a vortex of controversy, encompassing not only Préval (who left office in 2011 and died in 2017), but those of his three successors as president, including Haiti’s current leader, the former agribusinessman Jovenel Moïse.
Successive audits revealed what investigators charge was a vast scheme of embezzlement, leaving the impoverished Caribbean nation with a debt of almost $2bn. Much of the funds are believed to have been siphoned off by corrupt political and business operators.
Haiti’s recent battles to modernise its energy sector serve as a stark lesson for how fraught the business of energy transition can be. In the wake of the scandal, the struggle to provide Haiti’s 11 million people with reliable energy – and the desire to attract foreign investment to do so – has taken on an evermore politically charged hue.
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Global reform needed
Haiti’s state electricity company, Electricité d’Haïti (EDH), was created in 1971 following the privatisation of the Compagnie d’Eclairage, at the time managed by a US firm. Tasked with the mission of producing, transporting, distributing and marketing electricity throughout this mountainous nation, in recent decades EDH has struggled to achieve those aims.
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By GlobalDataThe second independent nation in the Americas after the US and site of the only successful slave rebellion in history, Haiti also holds the rather more dispiriting title of being the region’s poorest country. It has seen wild swings in its political compass since the overthrow of the Duvalier family dictatorship 34 years ago allowed many to dare hope for a brighter future.
One of the most ubiquitous sights in Haiti is the orange glow of kerosene lamps at night as roadside vendors attempt to sell pots of boiling fritay or chicken fried on makeshift grills. One of the most common sounds is the roaring of private generators behind the walls of the homes of the elite. Power outages in some areas of the country can last for weeks, while in neighbourhoods near Haiti’s National Palace in downtown Port-au-Prince – always politically restive – jerry-rigged siphoning of current has gone on for decades as successive governments dare not act against it.
“We have to have a global reform of the energy sector,” says Etzer Emile, a Haitian economist, professor at the capital’s Université Quisqueya and author of the book Haiti a choisi de devenir un pays pauvre (Haiti has chosen to be a poor country). “It is not just about the production, we have to diversify the energy matrix and we have to liberalise the market as they have done in the Dominican Republic. Companies need to be able to produce, transport and sell the service.”
Until the late 1990s, the energy market in the Dominican Republic was controlled by the state-owned Corporación Dominicana de Electricidad, whose history of non-technical energy losses (pirating) and shoddy bill collection made it somewhat analogous to EDH. Under the first presidency of Leonel Fernández, the sector was unbundled and partially privatised and now, in addition to the state generator, includes 12 private and mixed companies, which has resulted in far greater efficiency.
Clean energy potential
For Haiti’s Moïse, who has made the provision of energy nationwide the cornerstone of his presidency, the promise has taken on added urgency as the nation approaches general elections slated for 2021.
A new contract signed with General Electric would produce an additional 55MW of electricity for EDH, Joiséus Nader, Haiti’s Minister of Public Works, Transport and Communication, suggested recently. He had previously said the entity was “in tatters”, lacking even basic equipment such as pylons and meters. Earlier this year, Haiti launched its second solar microgrid in the south of the country. The microgrid was created by US-based EarthSpark International in collaboration with Enèji Pwòp, Haiti’s in-country social enterprise arm, with plans to create 22 additional grids over the next four years.
“We have had this energy crisis for a long time, more than 20 years,” says Evenson Calixte, managing director of Haiti’s Autorité Nationale de Régulation du Secteur de l’Energie (ANARSE), the nation’s energy regulatory authority. “And we believe that one element that can help reform this sector is private investment.”
In April 2016, Haiti signed the Paris Agreement to reduce greenhouse gas emissions. At the beginning of Moïse’s term, Haiti also hosted a Haiti Sustainable Energy Forum in Port-au-Prince with the World Bank and the Korea Green Growth Trust Fund.
Many see clean energy as the potential future for energy generation in Haiti.
“There is an opportunity to provide renewable energy access and create this new trajectory for development,” says Sandra Kwak, CEO and founder of San Francisco-based 10Power. “It is exciting to merge the social justice aspect with the renewable energy aspect.”
10Power recently partnered in Haiti with SimpliPhi Power, a US manufacturer of non-toxic, cobalt-free lithium ion energy batteries, to distribute energy storage systems powered by solar power. The organisation also completed a solar-powered water desalination project on the vast and little-developed Île de la Gonâve in the bay of Port-au-Prince. The initiative will provide clean drinking water for up to 40,000 people. Its next projects are solar installations on the UNICEF Haiti headquarters and an engineering school.
Public versus private
The struggle over Haiti’s power grid has put Moïse at loggerheads with some elements of Haiti’s private sector. In August 2020, a government anti-corruption task force published a report on the last ten years of the petroleum industry. It concluded that private oil companies operating in Haiti made $94m in undue profits between March 2019 and May 2020 at the expense of the state.
The report recommended strengthening the country’s Bureau de Monétisation des Programmes d’Aide au Développement, an entity tasked with optimising the efficacy of government contracts and programmes, and increased transparency in the price of imported petroleum products, among other measures. Haiti’s Association des professionnels du pétrole said the structure of fuel prices had been managed for 30 years by the Ministry of Finance, and that the devaluation of Haiti’s currency, the gourde, over the past decade had resulted in significant reductions in taxes collected because of increases in the cost of fuel.
Whereas Moïse says there has been “state capture” of the energy sector by corrupt private sector entities, his opponents have pushed back, claiming his is an increasingly autocratic and unaccountable government. After the terms of local mayors around the country expired this summer, when Moïse and the political opposition were unable to agree on a timetable for elections, Moïse simply issued a decree stating that, until elections were held, he would appoint mayors at will.
Opportunity and chaos
But even, amid such tumult, some argue that opportunity for the clean energy sector remains present.
“The situation in Haiti right now is everything but easy, and the Covid crisis has added another level of complexity, but there is opportunity there,” says Christian Schattenmann, fund manager at Bamboo Capital Partners.
The Luxembourg-based global private equity firm was selected in 2019 by Haiti’s government and the World Bank to act as the international fund manager for their dual Off Grid Electricity Fund (‘OGEF’). A $17.22m renewable energy access fund, the OGEF aims to electrify 200,000 households in Haiti within the next ten years.
“We want to electrify these households through renewable energy and investing in solar distributors, through mini grids, and by replacing diesel generators with new systems,” says Schattenmann.
Haiti’s political firmament continues to boil. The recent murder of well-known attorney Monferrier Dorval coincided with a series of armed incursions by street gangs (many rumoured to be linked to the government, others to the opposition) into various poor neighbourhoods in the capital, and has sent protesters back to the street demonstrating against insecurity.
On 5 September, in the presence of various dignitaries and the Taiwanese ambassador, Moïse launched a new project – financed to the tune of $157m by Taiwan’s Export–Import Bank – to construct four new substations and rehabilitate nine others to supply power to the Port-au-Prince metropolitan region. Of that, $27m will be used to build 43 solar and thermal microgrids across the country.
Despite the grinding violence and political battles, Moïse seemed sanguine, calling the project “a dream come true” and noting he would have done so before but “they” – his opposition – “stopped me”.
Michael Deibert is a journalist, author and Visiting Scholar at the Instituto de Ciências Sociais at the Universidade de Lisboa.
