Six months later, power struggle rages in Haiti (first in a series)

Miami HeraldJuly 11, 2010 

Editor’s note: This is the first of a three-part series examining the challenges and opportunities in three sectors critical to Haiti’s reconstruction — electricity, roads and ports — six months after the devastating earthquake.

BLANCHARD, Haiti — For decades the people of this countryside hamlet have lived in the shadow of a hydroelectric dam, never rewarded with its light.

The dam has sucked water from farms in the dry season, and drowned the fields in the rainy months. But the powerlines run in only one direction, toward the broken capital.

“They sell the electricity to the bourgeoisie in Port-au-Prince,” said Renel Fédé, 29, of Blanchard, an arid hillside community across from the dam in neighboring Péligre.

“They don’t even come and say to the people whose land they took, ‘We’re going to employ them, or their children,’ so at least they benefit somehow.”

Six months after the devastating Jan. 12 earthquake, Haitians remain hopeful that the billions promised in foreign aid will finally be able to extend the reach of the country’s crippled power system to more than 30 percent of the population. But a clear strategy for reviving the critical energy sector — a deteriorating, patchwork electrical grid — is yet to emerge.

“Will we continue to just rebuild what was clearly not working in the first place? Or do we want to use this for a new vision?” said Lumas Kendrick, an energy expert with the Inter-American Development Bank, which is financing several electricity projects.

For many Haitians, patience is wearing thin. In the northern city of Cap Haitien, where the government had boasted of 24-hour electricity from a new power plant financed by the Venezuelan government, protesters took to the streets last month, hurling rocks, complaining they had lived five months without power.

And when blackouts snuffed out TV screens as Brazil’s soccer team — Haiti’s sentimental favorite — fell to defeat in the World Cup this month, a frustrated radio announcer rebuked the power company by reciting the names of darkened neighborhoods:

“Delmas 95 doesn’t have electricity! Place Boyer has no electricity!”

Blackouts have become the norm. In recent years, Haiti’s state-owned electric company, Electricité d’Haiti, or EDH, has degenerated rapidly, generating 31 percent less power since 2004, according to an IDB report. At the same time, demand has surged, as the population grew to 9 million.

Port-au-Prince and other areas that enjoyed 24-hour electricity a generation ago were down to just 5 to 8 hours of power per day — and that was before the earthquake damaged two substations and knocked down 40 percent of the power lines.

The head of EDH has said it will cost at least $40 million to restore the already unreliable power grid to pre-earthquake levels. However, a report from Haiti’s Ministry of Finance said some parts of Port-au-Prince had 10 hours of daily electricity by March.

“Access to all — we have to have that as the goal, but so far no one has stated that,” said René Jean-Jumeau, an energy expert with Haiti’s Ministry of Public Works. “We have all of the strategies written out. There needs to be clear decisions made at the political level.”

The chronic power problems have paralyzed Haiti’s economy, scaring off potential investors as the international community seeks to boost private industry to pull Haiti out of the earthquake’s wreckage.

For example, the unpredictable electricity has discouraged some companies from taking advantage of the recent HOPE legislation, which lowers U.S. trade barriers for Haitian textiles to revive the country’s garment industry. Many businesses end up using costly diesel generators, or buying electricity from independent suppliers.

“If you are operating an industry and you have power outages, that is a killer,” said Carl-Auguste Boisson, CEO of E-Power, an independent power supplier whose new heavy-fuel oil plant is expected to save the government at least $20 million a year.

“Because of power outages and grid imbalances, it is not uncommon to find industrial companies that prefer to produce their own energy.”

EDH’s problems are both physical and financial. The company has no money or equipment to maintain an aging inventory of transformers that routinely overheat and fail, Kendrick said. Broken parts can take weeks or months to fix, forcing residents to sleep on their rooftops to get out of the heat.

EDH also lacks reliable meters, so much of the electricity that flows isn’t paid for by customers. Still more power is stolen — nobody can say how much, because EDH can’t measure what goes out. In all, EDH loses as much as 57 percent of the electricity it produces.

When the company does bill customers, it charges less than it costs to produce the electricity. These factors together lead to deficits of up to $100 million a year for the government-owned company, according to a 2009 IDB report.

EDH and the head of the Ministry of Public Works refused multiple requests for interviews for this article.

“They get 50 cents on the dollar, and that is not a sustainable situation,” said Shinji Yamamoto, chief investment officer for infrastructure with the International Finance Corporation, an arm of the World Bank.

After the earthquake, the Haitian government asked foreign donors for $157 million to improve the electrical system through 2011 as part of its national recovery plan. But $90 million of that was aimed at filling the electric company’s budget hole. The government has said it will need $347 million over the next three years to revamp the energy sector.

International donors, who have propped up EDH for decades paying for repairs and deficits, now expect more from Haiti’s government than renewed promises of reform. Some are pushing for more private investments, and others complete privatization. The government has historically dodged hot-button issues.

Before the earthquake, the IDB and World Bank had already committed almost $70 million to the power problem. The centerpiece of this plan: a $40 million repair job for the aging Péligre dam, built in 1956 and turned into a hydroelectric plant in 1971.

On paper, the hydroelectric plant, is the largest of EDH’s seven power plants. But the plant produces less than half of its capacity, because two of its three turbines are clogged with silt.

The dam’s problems serve as a microcosm of the compounding dilemmas that face this country:

The plant’s turbines choke on silt runoff that flows into the reservoir from the barren hillsides, where peasant farmers, seeking wood for fuel, cut down the trees that hold the soil.

The silt fills as much as half the reservoir, leaving less room for water, requiring more releases in the rainy season when storms can overflow the dam. The water releases often flood farm crops downstream, and send desperate farmers hunting for fuel wood above the dam. And with less water, the plant produces less power.

The cycle has been so devastating that some agencies have questioned whether the Péligre plant can be salvaged at all. A 2005 study for the U.S. Agency for International Development said the power plant could be rendered useless by 2017 without an aggressive reforestation plan to reduce silt runoff from the hillsides.

Nevertheless, the Haitian government asked the IDB two years ago to finance repairs at the dam — without any reforestation plans. (OPEC and the German government are also helping to pay for repairs.) The IDB’s Kendrick said more recent studies show the silting has slowed, making the project less of a risk.

What’s still unclear is when, or if, Haiti’s electric company will extend its power lines to overlooked rural communities such as Blanchard — communities that have seen an influx of people returning from Port-au-Prince after the earthquake turned that city mostly into rubble and tent camps. Before the quake, almost 80 percent of the power produced by EDH went only to Port-au-Prince, according to the USAID study.

For the residents of Blanchard, the dam is a symbol of urban arrogance, drowning their farmland to serve the capital. Blanchard’s residents live by candlelight, but they can see the porch lights in nearby Péligre, home of the power plant.

“They are always promising that they are going to give us electricity. Months, years pass and no power. It’s all just talk,” said Saiveur DiClaid, 35, a Blanchard farmer.

“Even if you wanted to plant a rice harvest, you can’t. All of our land is underneath water.”

Farmers dare not plant crops too close to the lake, for fear it will flood in the rainy season, when high waters can kill plants, livestock, and even children who must canoe across the lake to get to school.

“We can’t even drink the water,” 70-year-old farmer Jean Augustin said.

Despite the consequences for farming communities, the Haitian government has tentatively approved plans for a second hydroelectric dam on the Artibonite River, to be built by the Brazilian government. But it’s unclear how the $150 million project will be financed — or how much farmland will have to be confiscated.

“We still don’t know how many people would have to be relocated. We were asking this since 2008,” said Igor Kipman, Brazil’s ambassador to Haiti. “We just need the government to give us the green light.”

Energy experts say hydroelectric power is needed to reduce the country’s reliance on costly diesel, used to fuel most of Haiti’s other power plants and a prime target of fuel thieves. Diesel is vulnerable to price fluctuations, and a prime target of fuel thieves. But any long-term strategy to increase power must include multiple fuel sources, from solar to biomass, said the World Bank’s Yamamoto.

“The million-dollar question is what other things you can do in terms of generation capacity,” Yamamoto said.

Some international donors, including the United States, have quietly pushed the government to privatize the electric company, a longtime source of patronage jobs and corruption, and a drain on Haiti’s donor-financed budget.

But at the moment, EDH would have little value to private investors because of its poor record collecting revenues or even accounting for its finances. The World Bank and IDB are now working to modernize the electric company’s accounting systems, and improve training for its workers in the field.

Ultimately, it will be up to the Haitian government to adopt any meaningful reforms to deliver more electricity, aid agencies say. But while the government has called energy its most pressing long-term need, it has been hesitant to make decisions, even about modest proposals.

Brazil, for example, offered to give Haiti’s government $400,000 to bring power to Boucan Carré, a town near Péligre — and the government has yet to give the Brazilians an answer. The government has also stalled on plans to develop alternatives fuels from Jatropha and elephant grass.

Haiti will have to invest in all of these methods — new alternative fuels and traditional power sources — if it is to succeed in bringing power to the rest of the country, Yamamoto said.

“There is nothing wrong with renewable solar, wind. That’s not going to be supplying 100 percent of the energy need,” he said. “We will have to think about building coal power plants or importing gas. It’s a dilemma.”

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