Highlights of HAITI’S SREP INVESTMENT PLAN and CTF Project

Island Energy Transitions: Pathways for accelerated uptakes of RenewablesMartinique June 24, 2015

Marc André CHRYSOSTOMECoordinator, Energy CellMinistry Public Works, Transportation and Communications

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Country Context

• Population: 10.9 million• GDP per capita: US$ 846 (2014)• Widening poverty disparities

between urban and rural areas• Economic development

repeatedly been interruptedby external shocks (food and fuel price fluctuations, natural disasters, and etc.)

• Government’s goal of becoming an emerging economy within the next decade

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Energy sector – Challenges and Constraints

• Electrification rate of 30% (5% in rural areas)

• Intensive use of fuelwood and charcoal

• High dependence on fossil fuel–based electricity generation

• Aging and fragile infrastructure• High technical and commercial losses• Institutional, legal and regulatory

framework limitations• Economic and financial constraints• Capacity and information constraints

75%

22%

3%

Wood and Charcoal

Petroleum Products

Hydropower

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Overview of the Electricity Sector

• Électricité d’Haïti, EDH, (Electricity of Haiti ), national, government owned ‐utility , main provider of electricity services

• Installed generation capacity of 320 MW, 176 MW available for an estimated peak load demand of more than 500 MW,

• One main interconnected grid and 11 isolated grids, serving about 250,000 “active” customers

• Government’s approach to initiate Power sector reform and to improve EDH’s financial performance- Reduce EDH losses (WB and IDB support)- Increase availability and reduce costs of power supply- Prepare the ground for broader legal, institutional, and regulatory

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SREP Haiti: Opportunity and Description

Opportunity: Guide energy sector development toward a cleaner, cheaper, and more sustainable path

SREP objective: Initiate a transformation from the underdeveloped, unreliable, and expensive fossil fuel–based electricity generation mix to a modern and sustainable energy system relying on diverse sources of power.

Support recent government efforts to address the widening energy needs by improving the quality of electricity services in cities and expanding access to basic energy services in rural areas.

Energy access is very low while Haiti has an excellent but largely untapped RE potential (hydro, wind, solar, and biomass)

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Consultation Process

SREP IP: product of a comprehensive participatory process led by the Government

Stakeholders Contribution/Outcomes How/When

Key governmental, private, and nongovernmental organization (NGO)

Key information for the design of the off grid ‐electrification component

Haiti Rural Energy Forum, November 24 and 25, 2014

Development partners, NGOs, private sector

Inputs and comments on the proposed investmentsKey information on current RE projects

Technical Missions (Oct 2014, Feb 2015 and March 2015)

Academia, civil society and private sector

Identification of training needs Strong support to a crosscutting component on capacity building‐

SREP consultative workshops (Feb 2015)

End users ‐ Assessment of beneficiaries awareness Identification of opportunities and challenges Field missions (Feb 2015)

National stakeholdersPositive feedbacks on the IP Recommendations to be considered during project designClarification on key elements

Government website from March 30 to April 10, 2015

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SREP Haiti: Design & Financing Plan

SREP Component SREP Funding Public Co-financing

Private Leveraging

Total Leveraging

WB IFC Total

SREPWB-IDA

WB-CTF

Other public IFC Other

PrivatePublic + Private

1. RE for the PaP metropolitan area 8-10 0-2 10 6 16 22 Urban

On grid2. RE based expansion of ‐

Port de Paix remote grid‐ ‐ 2-4 2-4 10 2 12 RuralOn grid

3. Off grid electricity for ‐productive, social, and household uses

8-9 7-9 15-17 8 11.5 15 60 94.5 Rural+UrbanOff grid

4. Rehabilitation of small hydro plants 0 4 14 TBD 18 Rural

On grid

5. Building an enabling environment, capacities, and skills for RE scale up‐

1 1 2.5 0.5 3 Crosscutting

Total 21-23 7-9 30 30.5 12 14 15 78 149.5

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Expected Outcomes

• 200,000 newly electrified households, businesses, and other institutions (1 million residents)

• 10 MWp off-grid and 10-20 MWp on-grid additional RE capacity • Regulatory instruments developed for RE scale-up phase• Increased government and private sector experience

and capacity to develop and operate RE projects in Haiti• Increased hands-on experience

and capacity of university graduates specializing in RE• A pool of technicians in rural areas• Displacement of diesel and kerosene

to reduces GHG emissions and local pollution

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SREP: supporting sustainable development of Haiti

The government recognizes the tight link between access to modern energy and development, which drives its modern energy effort‐

Private sector strengthening

• Leveraging of the promising private interest in RE in both off grid and on-grid ‐markets.

• Reinforcement of Private interests and current initiatives in RE through Haiti’s first Renewable Energy Association.

• Strengthening cooperation between public and private sector through public-private partnership approaches

Skills and knowledge

• Building hands-on experience of renewable energy specialists, graduates and technicians to support a sustainable long-term renewable energy scale-up

Gender equity

• Women and children direct and major beneficiaries, gaining access to cleaner energy services and lower costs of accessing better energy services.

• Creating opportunities for women as entrepreneurs building on successful examples in existing off-grid projects

• SREP capacity building project will specifically target women to help them take ‐advantage of the new opportunities.

May 13 2015 10

Overview of Haiti’s CTF Project

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Haiti (Rural) Energy Access Challenge

• EDH: technical and commercial challenges prevent expansion in rural areas in foreseeable future

• Electrification rate in rural areas only 5 %

• Electricity bottleneck for economic development

• People in rural areas pay substantial amounts for kerosene, cell phone charging, batteries and other electricity-substitutable expenditures

Off-grid electrification can transform rural areas and promote their socio-economic development

Average current substitutable energy

expenses [$/m] Rural Urbanunweighted

averageARTIBONITE 13.04$ 23.65$ 16.85$ CENTRE 22.84$ 29.43$ 25.06$ GRAND ANSE 20.78$ 34.86$ 27.51$ NIPPES 10.66$ 26.72$ 14.99$ NORTH 14.68$ 36.66$ 24.16$ NORTH EAST 17.95$ 24.74$ 22.37$ NORTH WEST 22.32$ 37.14$ 29.57$ PORT AU PRINCE 42.80$ 44.76$ 43.67$ SOUTH 11.37$ 31.17$ 18.47$ SOUTH EAST 13.22$ 23.47$ 16.72$ (blank)

thus, aprox. weighted national average 29.55$

Households in rural areas pay $10-20 per month for electricity substitutable items

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Out-of-box solutions: from lanterns to solar home systems, powering TVs, fans, radios, cell phone chargers

< 10 Wp < 100 Wp

Pico-PV lighting products Solar Home Systems

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.. and smart micro-grids

EarthSpark microgrid, Les Anglais

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CTF Project: Modern Energy Services for All

CTF: Climate Technology Fund • Concessional loan to the Government (40 years, 0.25% interest rate, 10 year grace period)• Initial allocation of $12-16 million • Must support renewable energy-based off-grid electrification • Must be used for private sector investments The Climate Investment FundsThese include four key programs that help 63 developing countries pilot low-emissions and climate resilient development.

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CTF Modern Energy for All – Components

The Project Development Objective is to accelerate development of private sector-driven, renewable energy-based off-grid electrification business models to service households, enterprises and institutions in rural Haiti. Components: • Enabling framework and program oversight: $1.5 million – managed by

MTPTC

• Access to Finance Facility: $12 million – managed by a competitively selected Fund Manager (overseen by MTPTC and MEF)

• Fund administration, pipeline development, technical support to companies: $2.5 million – by the Fund Manager

Results • At least 500,000 with access to electricity in 5 years, 2 million in 10 years

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Access to Finance Facility – key design features

• Flexible design to be able to serve different market segments: • Small and large companies; Local and international ; Existing and new;

Lanterns, DESCOs with solar kits/home systems, micro-grids

• Several financing instruments: • Working capital for solar lantern distributors • Equity and results based financing for the start-up companies • Loans to allow companies to grow

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Access to Finance Facility – key design features

• Run by a competitively selected Fund Manager • 10 year contract with the Government, after 10 years extension or

proceeds repaid to the Government • Consortium of a local financial intermediary (local know how) and

international fund manager with experience with similar investments globally (knowledge transfer)

• Compensated through management fee and profit sharing• Operational autonomy (investment decisions) within the boundaries of the

Contract/Operating Guidelines but reporting to MTPTC

Thank you!

Marc André ChrysostomeEnergy Cell/MTPTC