HAITI: Enabling Local Private Sector Participation in PPP-Structured Renewable Energy Municipal Grids, Including Regulation and Capacity Building

Haiti is the only fragile, conflict, and violence-affected country in the Caribbean. Its energy sector is characterized by low access to electricity, intensive biomass use, and increasing reliance on costly imported fossil fuels. Haiti's national electricity utility EDH (Electricité d'Haïti) generates 81% of their power from oil, mostly provided by independent power producers, with the remainder from hydropower. While EDH’s available generation capacity has been stagnant in the past decade (today still at 176 MW), the aggregated capacity of stand-alone diesel engines, used for self-generation and back-up power, has been growing steadily, currently reaching an estimated 500MW (EDH and MTPTC Energy Cell estimates).  

There is no electrification plan in place because EDH is not able to expand its network due to significant capacity, operational, and financial deficits. A new plan for improving utility performance is under development by the government, but it is assumed the utility will not undertake rural electrification in the coming five years due to a backlog of investments to serve their existing, predominantly urban customers. Under these circumstances, mini grids present an important electrification opportunity for Haiti.  

PPIAF is assisting the government to design and implement an innovative PPP approach for scaling up mini grids, supporting Haiti’s vision for the energy sector—setting a path to become an emerging economy by 2030 and providing universal electricity access. PPIAF’s activity also supports Haiti’s National Roadmap (2014), highlighting the need to invest in renewable energy and off-grid energy access, and the country’s intended nationally determined contribution commitment to expand renewable energy generation to 47 percent of the generation mix by 2030.  

The proposed PPP model will help bring in much needed private sector investment and expertise in mini grid regulation, which otherwise is deterred by Haiti’s lack of a regulatory framework of mini grids. Because the government lacked information and capacity on how to structure and operationalize PPP approaches in the mini grid sector, PPIAF’s value added was bringing in expertise and best practices through workshops, consultations, and training and knowledge exchanges, carried out in a gender-sensitive manner, which led to a successful first round of development. The first concession agreements mobilizing $9.3 million in commercial finance for seven sites—which PPIAF helped design—are in late-stage negotiations with the regulator and in final-stage negotiations with the financier. The second round was launched in early September as part of the newly established national “PHARES” program for mini grid development, this time as a bottom-up approach.  

This will allow Haiti to leapfrog to a cleaner and more user-centric power system, based on decentralized renewable energy technologies. Haitians will benefit from increased access to electricity—alleviating poverty through lower-cost sources of power for households, job creation, and new economic opportunities, particularly in rural areas. Women are expected to benefit, both as electricity consumers and through opportunities to participate in mini-grid operations. 

Connectivity especially in the time of pandemic becomes even more important as microenterprises and women entrepreneurs struggle to connect to clients or provide the government feedback on their needs.