haiti: "open for business"

HAITI OPEN BUSINESS 1er octobre 2009 DIEUSEUL ANGLADE DIRECTEUR GENERAL courriel: [email protected] DU BUREAU DES MINES ET DE LENERGIE site web:www.bme.gouv.ht

HAITI: OPEN for BUSINESS OCTOBRE 1st 2009

investment opportunities in renewable energies

Dieuseul 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 Plan Overview of the energy SectorInvestment opportunitiesConclusion

BME

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1. Overview of the energy sector

Haiti energy consumption matrix(% TOE)hydroHaiti energy markets matrix(USD)Diesel(380 M)Wood-Charcoal(150 M)Wood* Most wood-fuel consumed by SMEs (Moonshine, drycleaners, bakeries) Biomass (wood & charcoal)72%Petroleumproducts25%Other petroleum fuels BME

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The energy demand

Transportation, industry and domestic consumption

380 000 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 market1. Overview of the energy sector BME

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2.1 Liquid 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.2. Investment opportunities BME

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2.2 Cooking energies

WoodlotsProject of creation of woodlots in unused lands Substitution of keroseneReplacement of kerosene lamps with lighting by small PV systems in rural areas Briquette productionProduction of briquettes from waste/renewable sources of biomass as substitutes for wood & charcoal2. Investment opportunities BME

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2. Investment opportunities2.1 Wind Energy

Lac Azu 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 potentialwind 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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2.3Solar energy

Solar panel assembly plants

Small PV rural solar projectsFor lighting, pumping, seafood and vaccine conservation2. Investment opportunities BME

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The energy market is 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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The Government 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);3. Conclusions BME

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Pursuing actions 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 SECTOR3. Conclusions BME

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THANK YOU

Dieuseul ANGLADE, Ing. Directeur General Bureau des Mines et de lnergie

Email : [email protected] Web site: www.bme.gouv.ht BME

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IDB International Business MeetingInvestment in Wind Power Generation from an International Investors Perspective

Rolando Gonzalez-BunsterInternational Business Meeting, Port-au-Prince, 1-2 October, 2009 BasicEnergy

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Economic and Commercial AspectsCountrys 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 site selection 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 parties

An 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 bureaucracy hinders 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 Construction AspectsAvailable 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 dont 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 projects feasibility.Terrain profile can influence balance of plant costs

BasicEnergy

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Carbon CreditsAlthough the variable 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 projects 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 Gonzales Bunster, Basic Energy BasicEnergy

Prospects for Jatropha curcas cultivation in Haiti

CHIBAS CHIBASInternational Business Meeting, Port-au-Prince, 1-2 October, 2009

Why Jatropha?Haiti presently imports 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

CHIBAS

> USD 350 M

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

How 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 availability for Jatropha CHIBAS

Land use map

Land availability for Jatropha CHIBAS

A

B

In green: area where you can grow Jatropha with limiting the negative impacts.A: >800,000 haB: >500,000 ha

There is enough land to meet Haitis diesel market!

A multipurpose cropThe markets for JatrophaEdible JatrophaOil & Biodiesel (liquid biofuels) 100 million gallons (280 M USD)

Charcoal briquettes80,000 ton (23 M USD)

High protein animal feed550,000 ton (165 M USD)

Honey12,000 ton (36 M USD)Non edible JatrophaOil & Biodiesel (liquid biofuels)100 million gallons (280 M USD)

Charcoal briquettes200,000 ton (60 M USD)

Honey12,000 ton (36 M USD) CHIBAS

Working with small holdersMaximizing 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)

Lwil Agogo building strategic alliances along the value chainProfitable businesses integrating the small holders and producers CHIBAS

CHIBAS at the service 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

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

Can the biodiesel value chain be an opportunity for Private Sector Investments in Haiti?

BID & USAID-DEEDSource: Biodiesel Value Chain Feasibility Study for Haiti IDB and USAID/DEED

International Business Meeting, Port-au-Prince, 1-2 October, 2009

The study has considered 3 lines of business

FARM BUSINESS

JATROPHA PRODUCTION CENTER (JPC)

BIODIESEL

Jatropha pressingChemical plantOilCake

Machine to press jatropha

Solid fuel-pellet IDB & USAID-DEED

Monitor Company 1999 Confidential30

FARMJATROPHA PRODUCTION CENTERBIODIESELINDUSTRY

Final products considered in the study

Final products subject to more investigation but with potential% Shown as % of dry fruit.Notes:

GENETICR&D

SEEDS

The main products have been considered IDB & USAID-DEED

Logical FrameworkOpportunity: There is a market

Private Investments provide good returns

3A benefits are hugeChallenges: Entrepreneurship Regulation & Public Investments R&D best crops Focus of development actors: arid/semi-arid lands

Strategic Options for Haiti:

Private Sector

Public Sector and Development agencies

Scenario we can accomplish together

IDB & USAID-DEED

Except for the small scale biodiesel plant, the three businesses present NPV positive in all scenariosFarm business:NPV/ haJatropha Production Center businessNPV/ JPCBiodiesel business:NPV/ industrial plant

Income/ ha1 = $2291 Income in fifth year

700 ha

6,500 ha

65,000 haVariation of NPVs according to oil prices and jatropha land productivityAsumption:Diesel pump price in Haiti: $2,31 IDB & USAID-DEED

Monitor Company 1999 Confidential33

$US2,5/gallon and 200gl oil/ha seem to be the break-even point for the Haitian biodiesel business

Break-even pointAssumptions: Diesel price at pump in Haiti Oil price (JPC business): 50% diesel price Jatropha dry fruit (Farm business): 10% oil price JPC business includes pellets businessVariation of NPVs according to oil prices and jatropha land productivity($US / gal)($US / gal)($US / gal) IDB & USAID-DEED

The economic impact in terms of development of each business is also significant in all scenarios analyzedSalaryProfits238221022100Jobs

$447/ha

35195260325032502600

700 ha

6,500 ha

65,000 ha

$1000-1150/haFarm business:Income/ haJatropha Production Center businessIncome/ haBiodiesel business:Income / industrial plant IDB & USAID-DEED

For 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 producers(1) From the fifth years and on

500,000HECTARES

250,000 owners 184,000-203,000 jobs (170,000 approximately on the farms)

Income per capita(1): > $460/ owner (=$2000/ owners with the JPCs) > $220/ worker

Environment: Replace the entire charcoal market ($320M)Renewing arid lands for fruit crops in the future

450,000 jobsAttractive vision because: scheme of farm owners integrated with the JPCs arid or semi-arid land can possibly be a transitory and complimentary culture efforts both focused and at a national scale

VISION IDB & USAID-DEED

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

Eucalyptus Project for Biomass Production

FGV - BIDInternational Business Meeting, Port-au-Prince, 1-2 October, 2009

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Agroclimatic Zoning

Land Capability

Methodology FGV - BID

Mtodo desenvolvido para confeco dos mapas de LAND SUITABILITY: cruzamento de informaes, envolvendo dados edafo-climticos e necessidades das culturas avaliadas. 39

EucalyptusPhase 1 Land Suitability FGV - BID

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Eucalyptus in the WorldSource: ABRAF, 2007

FGV - BID

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Haiti Energy Matrix

Area Covered by Forest: 3,8%Source: IEA. FGV - BID

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Biomass Project

Manufacturing

Firewood StoveBricket FGV - BID

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18 monthProcess of Forest Production FGV - BID

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Forest Management Population (trees/ha) 3,460Spacing (m) 1,70 1,70 Cutting cycle (years) 4 and 7 4 year- 1.730 trees200 m/ha 7 year-1.730 trees350 m/haAverage in 7 years50 m/ha/year

Biomass ProductionFire wood production per ha year (50% Humidity) 31,6 tBiomass production per ha year (10% Humidity)15,8 t

Forestry Project FGV - BID

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Biomass ProductionTotal biomass production in the 4, 5 and 6 year40.000 t per yearTotal biomass production After 7 year110.000 t per year

Forestry ProjectTotal area: 6.000ha 1.000ha per yearEarly plantingFirst harvest FGV - BID

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Biomass ProjectBPFNatural GasFirewood (50% humidity)charcoalBiomass (10% humidty)9.700 Kcal/Kg9.065 Kcal/Kg2.400 Kcal/Kg7.365 Kcal/Kg4.600 Kcal/Kg

FGV - BID

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Total Investments per unit of 1.000ha, USD

FGV - BID

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ANOTHER ALTERNATIVE OF BIOMASS: ELEPHANT GRASS

Production cost of elephant grass= USD 20,00/tPlanting and harvesting in the same year FGV - BID

Thank You!Cleber Lima Guarany

[email protected] FGV - BID

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The Biodiesel Haiti project Biocarburants dHaiti, SA


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Who we areBiocarburants dHaiti S.A.

Haitian Corporation established in 2007Major stakeholders: 4 local entrepreneurs: Reynold Roy, Reginald Noel, Georges Garnier, Pascale OriolPaid up capital: us $ 120,000Present activity: production of biodiesel on an experimental basis out of used vegetable oil collected from local restaurantsCurrent production: 500 gal /month sold to individuals Biocarburants dHaiti, SA

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What do we want to do ?

Based on experience acquired over the past 2 years: Transform current activity into a biodiesel production project out of jatropha oil Biocarburants dHaiti, SA

How do we want 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.

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 dHaiti, SA

Our production Goal: 1 Million gallons of biodiesel Phase 1: 300 gal/ha/year for a total production : 360,000 gal of biodiesel

Expected time to full output : 3 years

Phase 2: 640 000 gal out of jatropha plantations own by small farmers

Expected time to full output: 3 years from end of phase 1

Biocarburants dHaiti, SA

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Target MarketPrivate industries with electricity generation capacity (generators)

currently 22 % of Haiti s diesel consumption or 25 M gal / year


At todays diesel price of $ 2.80 we expect to be 10 to 15 % cheaper

At todays price, sales at end of phase 2 will amount : $ 2.5 millions

Expected net profit on sales : 21 %

Biocarburants dHaiti, SA What price?

What is the estimated investment?

2,8 Millions us $ for plant and related equipment as well as plantation program Biocarburants dHaiti, SA

What are we looking for in potential partners?Help in refining and completing project documentEquity financing Assistance in securing bank financingTechnical, logistical and managerial support once project launched


Thank You!Reginald Noel, Biocarburants dHaiti SA, [email protected] Biocarburants dHaiti, SA

WINECO-TEVASAEthanol plant TEVASAInternational Business Meeting, Port-au-Prince, 1-2 October, 2009

Terminal VarreuxWHARF SPECIFICATION

DRAFT11.0 METERS FOR WHARF 9.8M FOR TANKERSLOA190 METERS MAXFENDERSYOKOHAMA

LIST OF TANKS

46,000 BBLS1646,000 BBLS, WITH FLOATING ROOF 225,000 BBLS217,500 BBLS18,300 BBLS4

TEVASA

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

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

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

Processing ethanol for the 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

Plant Layout TEVASA

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

ENERSA

Renewable Energy For a Better WorldTransforming Hatis energy challenges into wealth and job creating opportunities


ENERSACOMPANY PROFILEHatis only designer and MANUFACTURER of solar panels and solar appliancesSmall, young, but the FASTEST GROWING solar company in the country (700% growth)

Socially responsible companyTrained from scratch & employed so far 18 solar technicians (almost all of them youth from Cit Soleil)Investing in our Human Resources Investing in environmental projectsSupporting youth initiatives

Industry leader in number of installations (in just over 2 years of operations)From 800 sq ft, moving to new 10,000 sq ft facility

Widest covered geographic area

58 towns & remote villages and countingcontracts in all 10 departments of the country

In very little time, we became the best local partner for nationwide solar projects

ENERSASOLAR as a strategic solutionHati in excellent radiation zone750,000 to 1M households without access

Making PV affordable & accessible Reducing the countrys dependence on imported fossil fuelCreating jobs

So, were in the business of Socioeconomic Development

Germanyhas 10 times that, just in solar PV- 1,500 MW PV installed in 2008 aloneSpainInstalled 1,800 Mw PV in 2008has an OVERALL installed capacity of about 360 MWwhile HatiEstimated total PV installed : only 700 Kw

SOLAR STREET LIGHTMARKET VALUE ADDED CHAIN ENERSA

PV MARKET VALUE ADDED CHAINSi- FeedstockWaferCellModuleBOSInstallation

Manufacturing DivisionInstallation Division43% Si- FeedstockWaferCellModuleBOSInstallationSolar appliance

59% MANUFACTURING as a wealth creating option

ENERSA

OUR PRODUCTSMobile phone chargerSTANDARD modelMobile phone chargerBELT model Mobile phone chargerBELT model plusCHAJMANSmall BusinessMobile phone Charging stationSolar LampLightRadioMobile phoneSolar Home System3 LightsRadioMobile phoneSolar Module PS-X30W60W120WNATIONAL TEAM WORK

Components from other Hatian industrial companies as much as possible

ENERSA

OTHER PRODUCTS & SERVICES

Village Mini Central Solar PlantSolar Irrigation PumpCoffee Export CoopHospitalMULTI Kw INSTALLATIONS4 main focus:SecurityCostUser friendlyInstall. friendly

Custom design forspecific projectsSTRONG R&D DEPARTMENT

ENERSAOUR MAIN SUCCESSSOLAR STREET LIGHT Theft proof hurricane proof 12h of light per night Fully automatic (ON/OFF) 3 days autonomy 25% cheaper than imported Designed in Hati Solar panel made in Hati LED light bulb made in Hati Pole made in Hati

ENERSAFINANCING HATIS SOLAR REVOLUTONMezzanine FinancingInventory Loan$Market segmentsfinancing mechanism(credit / loan)$$$Local component supplier

Other local installers

ConsumerInstitutionsGovernmentManufacturing DivisionInstallation DivisionForeign component supplierMicro BusinessHousehold Consumer appliances OFF-Grid : Residential (SHS) Commercial / Institutional Stand-Alone Utilities

ECONOMICALLY VIABLE MARKET SEGMENTS

INDUSTRY STRUCTURE FLOW CHART

ENERSAOpening solar market through proper financing mechanism5%

15%-20%

20% - 25%

50 % ( NOTE ABLE TO AFFORD )Cash able 1 3 year credit3 - 5 year creditSOLAR HOME SYSTEM MARKET POTENTIAL

ECONOMICALLY VIABLE

50% penetration potential with proper financing

375,000 HH in Hati$ 175 M market

200 M HH worldwide

Need subsidySolar needs subsidies ?NoNot for all market segments

ENERSANO VILLAGE TOO REMOTETHANK YOURenewable Energy For a Better WorldOur Greatest Achievement?Changing peoples livesCOUNTING ON YOUR SUPPORTPROFITABLE solar company, but

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Chart2554664554709664554

28NPV/Ha400 GL/HA4650kg seed/haFARMdiesel priceFARMOILPELLETSBIODIESELDiesel priceLand productivity1- 1,394- 3553,928- 1781002003004002- 1791512,9936081- 9,489,743- 9,346,804- 9,203,865- 9,060,92631,0366572,0571,3942- 7,451,936- 5,356,100- 3,260,263- 1,164,42742,2511,1641,1222,1793- 5,414,130- 1,365,3952,683,3396,732,0734- 3,376,3232,625,3098,626,94114,628,573NPV/Ha300 GL/HA3500kg seed/hadiesel priceFARMOILPELLETSBIODIESELJPC1- 1,416- 3472,899- 216Diesel priceLand productivity2- 502352,19537510020030040034134161,49096713,264,4129,953,09116,588,50023,221,97941,3277977861,55822,544,7148,543,68214,489,38020,433,14731,825,0157,134,27212,390,25917,644,315NPV/Ha200 GL/HA2350 kg seed/ha41,105,3165,724,86210,291,13814,855,483diesel priceFARMOILPELLETSBIODIESEL1- 1,438- 3381,869- 255BIODIESEL2- 824- 821,397142Diesel priceLand productivity3- 21017492454010020030040044044304519371- 1,905,021- 1,655,771- 1,406,520- 1,157,2702- 586,913925,5242,437,9613,950,398NPV/Ha100 GL/HA1200 kg seed/ha3731,1953,506,8186,282,4429,058,065diesel priceFARMOILPELLETSBIODIESEL42,049,3036,088,11310,126,92314,165,7331- 1,460- 338840- 2932- 1,146- 207599- 903- 833- 773571124- 51954116315

280000000000000000

100 gl oil/ha200 gl oil/ha300 gl oil/ha400 gl oil/haDiesel price ($US)NPV ($US)Farm business - 6,500 hectares

29-300000000000000000

100 gl oil/ha200 gl oil/ha300 gl oil/ha400 gl oil/haDiesel price ($US)NPV ($US)JPC business - 19 centers

Hoja30000000000000000

100 gl oil/ha200 gl oil/ha300 gl oil/ha400 gl oil/haDiesel price ($US)NPV ($US)Biodiesel business - 1,8MM gl/year plant

NPV/haProfit/haSalary/haJobs/ha(/ha)700 ha2302292182350.346500 ha23022921821830.3465000 ha230229218218330.34NPV/JPCProfit/JPCProfit/haJobs/JPCJobs/ha2689774193945554190.05453123851863687664520.04019674215189570554190.054443945922115194257094480.028463395491938790664560.040186688714193647554190.054NPV/plantProfit/plantProfit/haJobs/plantJobs/ha194,000 gl/year-264232928441.8342857180.0111,8MM gl/year174595457334188.20630769300.00518MM gl/year215214027304394.043112.375293820.001per business unitper business unitper hectareper hectare

Number of JPC