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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 Slide 2 Presentation Plan 1.Overview of the energy Sector 2.Investment opportunities 3.Conclusion BME Slide 3 1. Overview of the energy sector Haiti energy consumption matrix (% TOE) hydro Haiti 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% Petroleum products 25% Other petroleum fuels BME Slide 4 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 1. Overview of the energy sector BME Slide 5 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 Slide 6 2.2 Cooking energies Woodlots Project of creation of woodlots in unused lands Substitution of kerosene Replacement 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 2. Investment opportunities BME Slide 7 2. Investment opportunities 2.1 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 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 Slide 8 2.3Solar energy Solar panel assembly plants Small PV rural solar projects For lighting, pumping, seafood and vaccine conservation 2. Investment opportunities BME Slide 9 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 3. Conclusions BME Slide 10 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 Slide 11 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 3. Conclusions BME Slide 12 THANK YOU Dieuseul ANGLADE, Ing. Directeur General Bureau des Mines et de lnergie Email : dsanglade@yahoo.com Web site: www.bme.gouv.ht BME Slide 13 IDB International Business Meeting Investment in Wind Power Generation from an International Investors Perspective Rolando Gonzalez-Bunster International Business Meeting, Port-au-Prince, 1-2 October, 2009 BasicEnergy Slide 14 Economic and Commercial Aspects Countrys 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 Slide 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 2/3 rds 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 Slide 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 Slide 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 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 Slide 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 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 Slide 19 THANK YOU! Rolando Gonzales Bunster, Basic Energy BasicEnergy Slide 20 Prospects for Jatropha curcas cultivation in Haiti CHIBAS International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 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 Slide 22 > USD 350 M > USD 150 M > USD 60 M Energy matrix (Market) % of energy mix (market) Tons of Oil Equivalent The market for Biodiesel * Most of the wood is not sold on the market * Slide 23 How much land can be used to 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 Slide 24 Land availability for Jatropha CHIBAS A B In green In green: area where you can grow Jatropha with limiting the negative impacts. A: >800,000 ha B: >500,000 ha There is enough land to meet Haitis diesel market! Slide 25 A multipurpose crop The markets for Jatropha Edible Jatropha Oil & Biodiesel (liquid biofuels) 100 million gallons (280 M USD) Charcoal briquettes 80,000 ton (23 M USD) High protein animal feed 550,000 ton (165 M USD) Honey 12,000 ton (36 M USD) Non edible Jatropha Oil & Biodiesel (liquid biofuels) 100 million gallons (280 M USD) Charcoal briquettes 200,000 ton (60 M USD) Honey 12,000 ton (36 M USD) CHIBAS Slide 26 Working with small holders Maximizing profit along the value chain Integrate small holders to the Jatropha value chain There 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 chain Profitable businesses integrating the small holders and producers CHIBAS Slide 27 CHIBAS at the service of the local agro-industry 1.CHIBAS will be improving, releasing and promoting the use of improved Jatropha varieties as multipurpose crops (food/feed and energy); 2.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; 3.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 Slide 28 THANK YOU! Gael Pressoir, CHIBAS, Executive Director Geneticist & Plant Breeder gael.pressoir@chibas-bioenergy.org Skype: gael_pressoir Phone: +509 3465 0449 CHIBAS Slide 29 Can the biodiesel value chain be an opportunity for Private Sector Investments in Haiti? BID & USAID-DEED Source: Biodiesel Value Chain Feasibility Study for Haiti IDB and USAID/DEED International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 30 The study has considered 3 lines of business FARM BUSINESS JATROPHA PRODUCTION CENTER (JPC) BIODIESEL Jatropha pressing Chemical plant Oil Cake Machine to press jatropha Solid fuel-pellet IDB & USAID-DEED Slide 31 FARM JATROPHA PRODUCTION CENTER BIODIESEL INDUSTRY Final products considered in the study Final products subject to more investigation but with potential % Shown as % of dry fruit. Notes: GENETIC R&D SEEDSSEEDS The main products have been considered IDB & USAID-DEED Slide 32 Logical Framework Opportunity: There is a market Private Investments provide good returns 3A benefits are huge Challenges: 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 Slide 33 Except for the small scale biodiesel plant, the three businesses present NPV positive in all scenarios Farm business: NPV/ ha Jatropha Production Center business NPV/ JPC Biodiesel business: NPV/ industrial plant Income/ ha 1 = $229 1 Income in fifth year 700 ha6,500 ha 65,000 ha Variation of NPVs according to oil prices and jatropha land productivity Asumption: Diesel pump price in Haiti: $2,31 IDB & USAID-DEED Slide 34 $US2,5/gallon and 200gl oil/ha seem to be the break- even point for the Haitian biodiesel business Break-even point Assumptions: Diesel price at pump in Haiti Oil price (JPC business): 50% diesel price Jatropha dry fruit (Farm business): 10% oil price JPC business includes pellets business Variation of NPVs according to oil prices and jatropha land productivity ($US / gal) IDB & USAID-DEED Slide 35 The economic impact in terms of development of each business is also significant in all scenarios analyzed Salary Profits 238221022100 Jobs $447/ha 351952603250 2600 700 ha6,500 ha 65,000 ha $1000-1150/ha Farm business: Income/ ha Jatropha Production Center business Income/ ha Biodiesel business: Income / industrial plant IDB & USAID-DEED Slide 36 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 500,000 HECTARES 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 jobs Attractive 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 Slide 37 THANK YOU! Eduardo Almeida, BID IDB & USAID-DEED Slide 38 Eucalyptus Project for Biomass Production FGV - BID International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 39 Agroclimatic Zoning Land Capability Methodology FGV - BID Slide 40 Eucalyptus Phase 1 Land Suitability FGV - BID Slide 41 Eucalyptus in the World Source: ABRAF, 2007 FGV - BID Slide 42 Haiti Energy Matrix Area Covered by Forest: 3,8% Source: IEA. FGV - BID Slide 43 Biomass Project Manufacturing Firewood Stove Bricket FGV - BID Slide 44 18 month Process of Forest Production FGV - BID Slide 45 Forest Management Population (trees/ha)3,460 Spacing (m)1,70 1,70 Cutting cycle (years)4 and 7 4 year- 1.730 trees200 m/ha 7 year-1.730 trees350 m/ha Average in 7 years50 m/ha/year Biomass Production Fire wood production per ha year (50% Humidity)31,6 t Biomass production per ha year (10% Humidity)15,8 t Forestry Project FGV - BID Slide 46 Biomass Production Total biomass production in the 4, 5 and 6 year40.000 t per year Total biomass production After 7 year110.000 t per year Forestry Project Total area: 6.000ha 1.000ha per year Early plantingFirst harvest FGV - BID Slide 47 Biomass Project BPFNatural GasFirewood (50% humidity)charcoal Biomass (10% humidty) 9.700 Kcal/Kg9.065 Kcal/Kg2.400 Kcal/Kg7.365 Kcal/Kg4.600 Kcal/Kg FGV - BID Slide 48 Total Investments per unit of 1.000ha, USD FGV - BID Slide 49 ANOTHER ALTERNATIVE OF BIOMASS: ELEPHANT GRASS Production cost of elephant grass= USD 20,00/t Planting and harvesting in the same year FGV - BID Slide 50 Thank You! Cleber Lima Guarany cleber.guarany@fgv.br FGV - BID Slide 51 The Biodiesel Haiti project Biocarburants dHaiti, SA International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 52 Who we are Biocarburants dHaiti S.A. Haitian Corporation established in 2007 Major stakeholders: 4 local entrepreneurs: Reynold Roy, Reginald Noel, Georges Garnier, Pascale Oriol Paid up capital: us $ 120,000 Present activity: production of biodiesel on an experimental basis out of used vegetable oil collected from local restaurants Current production: 500 gal /month sold to individuals Biocarburants dHaiti, SA Slide 53 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 Slide 54 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 Slide 55 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 Slide 56 Target Market Private industries with electricity generation capacity (generators) currently 22 % of Haiti s diesel consumption or 25 M gal / year Biocarburants dHaiti, SA Slide 57 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? Slide 58 What is the estimated investment ? 2,8 Millions us $ for plant and related equipment as well as plantation program Biocarburants dHaiti, SA Slide 59 What are we looking for in potential partners? Help in refining and completing project document Equity financing Assistance in securing bank financing Technical, logistical and managerial support once project launched Biocarburants dHaiti, SA Slide 60 THANK YOU! Reginald Noel, Biocarburants dHaiti SA, biodieselhaiti@hotmail.com Biocarburants dHaiti, SA Slide 61 WINECO-TEVASA Ethanol plant TEVASA International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 62 Terminal Varreux WHARF SPECIFICATION DRAFT11.0 METERS FOR WHARF 9.8M FOR TANKERS LOA190 METERS MAX FENDERSYOKOHAMA LIST OF TANKS 46,000 BBLS16 46,000 BBLS, WITH FLOATING ROOF 2 25,000 BBLS2 17,500 BBLS1 8,300 BBLS4 TEVASA Slide 63 Caribbean Basin Initiative (CBI) TEVASA Ethanol 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 country Tax saving of US 54 cents a gallon Slide 64 30 million gal.year dehydration plant TEVASA In full operation by mid 2010 Expansion possible to 60 M gal Corresponding tanks and infrastructure additions to accommodate the increased volume are planned Slide 65 30 million gal.year dehydration plant TEVASA In full operation by mid 2010 Expansion possible to 60 M gal Corresponding tanks and infrastructure additions to accommodate the increased volume are planned Slide 66 Processing ethanol for the US market TEVASA Final stages of negotiations Ethanol will originate from Brazil and after processing in Haiti it will be exported to US for further blending with gasoline Slide 67 Plant Layout TEVASA Slide 68 THANK YOU! Maulik Radia, TEVASA, Managing Director maulikradia@yahoo.com TEVASA Slide 69 ENERSA Renewable Energy For a Better World Transforming Hatis energy challenges into wealth and job creating opportunities International Business Meeting, Port-au-Prince, 1-2 October, 2009 Slide 70 ENERSA COMPANY PROFILE Hatis only designer and MANUFACTURER of solar panels and solar appliances Small, young, but the FASTEST GROWING solar company in the country (700% growth) Socially responsible company Trained from scratch & employed so far 18 solar technicians (almost all of them youth from Cit Soleil) Investing in our Human Resources Investing in environmental projects Supporting 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 counting contracts in all 10 departments of the country In very little time, we became the best local partner for nationwide solar projects Slide 71 ENERSA SOLAR as a strategic solution Hati in excellent radiation zone 750,000 to 1M households without access Making PV affordable & accessible Reducing the countrys dependence on imported fossil fuel Creating jobs So, were in the business of Socioeconomic Development Making PV affordable & accessible Reducing the countrys dependence on imported fossil fuel Creating jobs So, were in the business of Socioeconomic Development Germanyhas 10 times that, just in solar PV - 1,500 MW PV installed in 2008 alone SpainInstalled 1,800 Mw PV in 2008 has an OVERALL installed capacity of about 360 MWwhile Hati Estimated total PV installed : only 700 Kw Slide 72 SOLAR STREET LIGHT MARKET VALUE ADDED CHAIN ENERSA PV MARKET VALUE ADDED CHAIN Si- Feedstock Wafer Cell Module BOS Installation Manufacturing Division Installation Division 43% Si- Feedstock Wafer Cell Module BOS Installation Solar appliance 59% MANUFACTURING as a wealth creating option Slide 73 ENERSA OUR PRODUCTS Mobile phone charger STANDARD model Mobile phone charger BELT model Mobile phone charger BELT model plus CHAJMAN Small Business Mobile phone Charging station Solar Lamp -Light -Radio -Mobile phone Solar Home System -3 Lights -Radio -Mobile phone Solar Module PS-X -30W -60W -120W NATIONAL TEAM WORK Components from other Hatian industrial companies as much as possible NATIONAL TEAM WORK Components from other Hatian industrial companies as much as possible Slide 74 ENERSA OTHER PRODUCTS & SERVICES Village Mini Central Solar Plant Solar Irrigation Pump Coffee Export Coop Hospital MULTI Kw INSTALLATIONS 4 main focus: a)Security b)Cost c)User friendly d)Install. friendly Custom design for specific projects 4 main focus: a)Security b)Cost c)User friendly d)Install. friendly Custom design for specific projects STRONG R&D DEPARTMENT Slide 75 ENERSA OUR MAIN SUCCESS SOLAR 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 Slide 76 ENERSA FINANCING HATIS SOLAR REVOLUTON Mezzanine Financing Inventory Loan Mezzanine Financing Inventory Loan $ Market segments financing mechanism (credit / loan) Market segments financing mechanism (credit / loan) $$$ Local component supplier Other local installers Consumer Institutions Government Manufacturing Division Installation Division Foreign component supplier Micro Business Household Consumer appliances OFF-Grid : - Residential (SHS) - Commercial / Institutional - Stand-Alone Utilities Consumer appliances OFF-Grid : - Residential (SHS) - Commercial / Institutional - Stand-Alone Utilities ECONOMICALLY VIABLE MARKET SEGMENTS INDUSTRY STRUCTURE FLOW CHART Slide 77 ENERSA Opening solar market through proper financing mechanism 5% 15%-20% 20% - 25% 50 % ( NOTE ABLE TO AFFORD ) Cash able 1 3 year credit 3 - 5 year credit SOLAR HOME SYSTEM MARKET POTENTIAL ECONOMICALLY VIABLE 50% penetration potential with proper financing 375,000 HH in Hati $ 175 M market 200 M HH worldwide ECONOMICALLY VIABLE 50% penetration potential with proper financing 375,000 HH in Hati $ 175 M market 200 M HH worldwide Need subsidy SOLAR NEEDS SUBSIDIES ?NONOT FOR ALL MARKET SEGMENTS Slide 78 ENERSA NO VILLAGE TOO REMOTE THANK YOU Renewable Energy For a Better World Our Greatest Achievement? Changing peoples lives COUNTING ON YOUR SUPPORT PROFITABLE solar company, but