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

HAITI: OPEN for BUSINESS OCTOBRE 1 st 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. Presentation Plan. Overview of the energy Sector

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

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  1. HAITI: OPEN for BUSINESS 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

  2. Presentation Plan • Overview of the energy Sector • Investment opportunities • Conclusion BME

  3. 1. Overview of the energy sector Haiti energy “consumption” matrix (% TOE) Haiti energy “markets” matrix (USD) hydro Other petroleum fuels Petroleumproducts 25% Wood Diesel (380 M) Biomass (wood & charcoal) 72% Wood-Charcoal (150 M) * Most wood-fuel consumed by SMEs (Moonshine, drycleaners, bakeries) BME

  4. 1. Overview of the energy sector The energy demand Transportation, industry and domestic consumption • 380 000 tons de charcoal per year for families: a US$ 150 M market • 200 000 tons of wood in the SMEs : a US$ 60 M market • 130 millions gallons of diesel : a US$ 380 market BME

  5. 2. Investment opportunities 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. BME

  6. 2. Investment opportunities 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 production Production of briquettes from waste/renewable sources of biomass as substitutes for wood & charcoal BME

  7. 2. Investment opportunities 2.1 Wind Energy • Lac 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

  8. 2. Investment opportunities 2.3 Solar energy • Solar panel assembly plants • Small PV rural solar projectsFor lighting, pumping, seafood and vaccine conservation BME

  9. 3. Conclusions 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-POWER BME

  10. 3. Conclusions BME 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);

  11. 3. Conclusions BME 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 SECTOR

  12. THANK YOU Dieuseul ANGLADE, Ing. Directeur General Bureau des Mines et de l’Énergie Email : dsanglade@yahoo.com Web site: www.bme.gouv.ht BME

  13. Rolando Gonzalez-Bunster IDB International Business Meeting Investment in Wind Power Generation from an International Investor’s Perspective International Business Meeting, Port-au-Prince, 1-2 October, 2009 BasicEnergy

  14. Economic and Commercial Aspects • Country’s political situation should be stable and should present macroeconomic growth in the short term. • Payment risk needs to be minimal • Capital 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

  15. Site Selection • Initial 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

  16. Permitting • Too 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

  17. Technical and Construction Aspects • Available 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 costs BasicEnergy

  18. Carbon Credits • Although 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 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

  19. Rolando Gonzales Bunster, Basic Energy Thank You! BasicEnergy

  20. Prospects for Jatrophacurcas cultivation in Haiti CHIBAS International Business Meeting, Port-au-Prince, 1-2 October, 2009 CHIBAS

  21. 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 limited • Ethanol would have a relatively small local market • Oil processing and production of bio-diesel is scalable • Plant 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

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

  23. Land availability for Jatropha • 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 use map CHIBAS

  24. Land availability for Jatropha In green: area where you can grow Jatropha with limiting the negative impacts. A: >800,000 ha B: >500,000 ha A B There is enough land to meet Haiti’s diesel market! CHIBAS

  25. A multipurpose cropThe markets for Jatropha Edible Jatropha Non edible Jatropha Oil & Biodiesel (liquid biofuels)100 million gallons (280 M USD) Charcoal briquettes200,000 ton (60 M USD) Honey12,000 ton (36 M USD) • Oil & 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) CHIBAS

  26. Working with small holdersMaximizing profit along the value chain • Integrate 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

  27. CHIBAS at the service of the local agro-industry • CHIBAS 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

  28. Gael Pressoir, CHIBAS, ExecutiveDirector Geneticist & Plant Breeder gael.pressoir@chibas-bioenergy.org Skype: gael_pressoir Phone: +509 3465 0449 Thank You! CHIBAS

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

  30. The study has considered 3 lines of business FARM BUSINESS JATROPHA PRODUCTION CENTER (JPC) BIODIESEL Jatropha pressing Machine to press jatropha Chemical plant Cake Oil Solid fuel-pellet IDB & USAID-DEED

  31. The main products have been considered GENETICR&D FARM JATROPHA PRODUCTION CENTER BIODIESEL INDUSTRY S E E D S Notes: Final products considered in the study Final products subject to more investigation but with potential % Shown as % of dry fruit. IDB & USAID-DEED

  32. Logical Framework • Opportunity: • There is a market • Private Investments • provide good returns • 3A benefits are huge • Strategic Options for Haiti: • Private Sector • Public Sector and • Development agencies Scenario we can accomplish together • Challenges: • Entrepreneurship • Regulation & Public Investments • R&D best crops • Focus of development actors: arid/semi-arid lands IDB & USAID-DEED

  33. Income/ ha1 = $229 65,000 ha 700 ha 6,500 ha Except for the small scale biodiesel plant, the three businesses present NPV positive in all scenarios Variation of NPVs according to oil prices and jatropha land productivity Farm business: NPV/ ha Jatropha Production Center business NPV/ JPC Biodiesel business: NPV/ industrial plant 1 Income in fifth year Asumption: Diesel pumpprice in Haiti: $2,31 IDB & USAID-DEED

  34. $US2,5/gallon and 200gl oil/ha seem to be the break-even point for the Haitian biodiesel business Variation of NPVs according to oil prices and jatropha land productivity ($US / gal) ($US / gal) Break-even point • Assumptions: • Diesel price at pump in Haiti • Oilprice (JPC business): 50% diesel price • Jatrophadryfruit (Farmbusiness): 10% oilprice • JPC businessincludes pellets business ($US / gal) IDB & USAID-DEED

  35. The economic impact in terms of development of each business is also significant in all scenarios analyzed $1000-1150/ha Jobs 238 2210 22100 35 195 260 3250 2600 3250 $447/ha Salary Profits 65,000 ha 700 ha 6,500 ha Farm business: Income/ ha Jatropha Production Center business Income/ ha Biodiesel business: Income / industrial plant IDB & USAID-DEED

  36. 250,000 owners • 184,000-203,000 jobs(170,000 approximately on the farms) • Income per capita(1): • > $460/ owner (=$2000/ owners with the JPC’s) • > $220/ worker • Environment: • Replace the entire charcoal market ($320M) • Renewing arid lands for fruit crops in the future 450,000 jobs 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 VISION 500,000 HECTARES • Attractive vision because: • scheme of farm owners integrated with the JPC’s • arid or semi-arid land • can possibly be a transitory and complimentary culture • efforts both focused and at a national scale (1) From the fifth years and on IDB & USAID-DEED

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

  38. Eucalyptus Project for Biomass Production International Business Meeting, Port-au-Prince, 1-2 October, 2009 FGV - BID

  39. Methodology Agroclimatic Zoning LandCapability FGV - BID

  40. Phase 1 – Land Suitability Eucalyptus FGV - BID

  41. Eucalyptus in the World Source: ABRAF, 2007 FGV - BID

  42. Haiti Energy Matrix Area Covered by Forest: 3,8% Source: IEA. FGV - BID

  43. Biomass Project Manufacturing Bricket Firewood Stove FGV - BID

  44. Process of Forest Production 18 month FGV - BID

  45. Forestry Project FGV - BID

  46. Forestry Project Total area: 6.000ha – 1.000ha per year Early planting First harvest FGV - BID

  47. Biomass Project FGV - BID

  48. Total Investments per unit of 1.000ha, USD FGV - BID

  49. Thank You! • Cleber Lima Guarany • cleber.guarany@fgv.br FGV - BID

  50. The Biodiesel Haiti project International Business Meeting, Port-au-Prince, 1-2 October, 2009 Biocarburants d’Haiti, SA

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