January 21, 2013 Kale Je/Grassroots watch. Original article here
Port-au-Prince, HAITI, 22 January 2013 – For more than two years, teams of US and Haitian businesspeople have been working on massive public-private business deal: a factory that would transform garbage from the capitol into electricity, a resource so rare in Haiti, only 30 percent of the population has access.
But the project involves a technology so potentially dangerous, it has been outlawed in some cities and countries. It would also commit the state to a 30-year contract.
The project emerged from the ruins of the January 12 2010. US businesspeople said they came up with the idea because they wanted to take part in the reconstruction but “do more than make a profit.”
“We want Haiti to be energy independent,” explained a Haitian representative of the US firm, International Electric Power (IEP) of Pittsburgh, PA, USA. The representative, a well-known businessman, agreed to speak with Haiti Grassroots Watch (HGW) only if his name was withheld, saying he had critical words for some actors who he says are trying to block the project. “We invested millions of dollars… It will be a shame if we have to abandon it.”
Ashes to Ashes
Phoenix and its 30 megawatt (MW) plant is the brainchild of IEP and a “Waste to Energy” or WtE project. At first, IEP was planning a 50 MW installation, which would also use locally excavated “lignite” or “soft coal.” In many countries where garbage is too “organic” or has too much liquid content, coal or another fuel has to be added in order to raise the caloric level of the burn. However, because coal-burning is going out of vogue due to its contribution to global warming, the lignite option was dropped and IEP scaled back to a 30 MW plant.*
Presented as a project that will create “2,000 direct jobs and 8,000 indirect jobs in Haiti” that will “bring efficient solutions to various key problems facing Haitian society today,” Phoenix is not a non-profit enterprise. It is a business, a public-private partnership, where the state will own 10 percent and the private entities will own 90 percent. In addition, the state – through the Electricity of Haiti (EDH in French) – will promise for 30 years to pay for the upkeep and operation of the factory and to buy electricity “on demand,” according to IEP. Finally, the government will donate 400 hectares north of the capital for the factory site.
Founded in 2005, IEP has never built an incineration plant. However, according to its website, it is involved in one bio-digestion project and two wind projects, one of them in Haiti. IEP says it will sub-contract the factory construction to the Spanish firm Ros Roca which built a similar plant on Mallorca in that country.
IEP needs at least US$250 million to build the plan, according to Edward Rawson, vice president of the company. In an email interview with HGW in December 2012, Rawson said IEP is on the point of getting that financing from the US government agency Overseas Private Investment Corporation, which guarantees low-interest loans to US companies working in foreign countries. According to Rawson, OPIC has “expressed interest in investing as a senior lender.” However, he added, the agency is waiting for the results of an IEP-sponsored study on the environmental impacts of Phoenix, being carried out by the British firm Atkins.
The Pennsylvania business added that the UN Environment Program (UNEP) is also doing a study, this one for the Haitian government.
Asked for details, the UNEP’s Andrew Morton responded, on January 9 2013: “Yes, UNEP is conducting an independent review on behalf of the Government of Haiti and in cooperation with International Electric Power. The review is ongoing and the process is confidential.” Morton added that the study could take another three to six months, but that once completed, “a public report” will be published.
Haitian officials support Project Phoenix
Project Phoenix falls right into the government’s vision for energy, according to the Minister Delegate for Energy Security, René Jean Jumeau.
“The project is part of our Action Plan for the Development of Electricity. We aim to build factories that will turn trash into energy all over the country,” he told HGW in an interview on October 10 2012. “The transformation of garbage into electricity will allow us to achieve two objectives. The first is increase our energy output and the second, linked to the first, is to better handle our waste situation.”
The director of the capitol region’s trash agency agreed.
“Once this project is going, we will have a much cleaner metropolitan region,” said to Donald Paraison, head of the Metropolitan Service for the Collection of Solid Waste.
A typical street in downtown Port-au-Prince, where mounds of garbage, vendors
and pedestrians battle for space. Photo: Jude Stanley Roy/HGW
With the two major agencies on board, IEP and the Haitian government signed two agreements in May 2012, and they have already prepared the legal documents for the eventual public-private business, known as a “Société mixte anonyme” or “Anonymous Mixed Society,” in Haitian law.
But the project is blocked.
Rejections and Objections
IEP officials note that it appears the Haitian government can’t move forward on the project, even though it will be almost entirely privately financed.
“We are waiting on approval from the multinational donor community,” Rawson said, because of the project’s “size and complexity.”
IEP’s representative in Haiti was more direct.
“Certain ‘friends of Haiti’ are against the project,” he sniped. “And the Haitian government is like a child. It is afraid of moving forward because there were certain objections to the project. Until those issues are addressed, it won’t move ahead, because it is afraid it might lose its foreign aid… But we are not giving up.”
In fact, the project was rejected twice by the Interim Haiti Recovery Commission (IHRC), formerly responsible for approving and coordinating all reconstruction projects, never approved Project Phoenix.
Shut down since October 2011, there was nobody from the IHRC available to discuss the dossier. However, a staffer at one of the International Financial Institutions (IFIs) who was consultant to the commission at the time (in other words, a staffer from the World Bank [WB] or the Inter-American Development Bank [IDB]) agreed to speak with HGW on the condition that his or her name not be revealed, since staffers are not allowed to speak with journalists without express permission.
A second IFI employee who was also aware of the dossier told HGW: “both the WB and the IDB studied the project and both of them rejected it because it would be terrible for Haiti.”
More recently, the IDB’s Gilles Damais told HGW that since the Bank is not part of the project, it “will issue neither an approval nor a disapproval.”
However, in his emails to HGW, IEP’s Rawson repeatedly gave the impression that the IDB, the WB and other institutions will be involved, saying they have been “engaged.”
Risks and doubts
In the telephone interview, the first IFI staffer outlined the principle objections to the project: a lack of transparency and the potential commitment of the state in an activity where it is already losing millions of dollars.
In fact, the Phoenix Project was presented without any open bidding process. IEP chose its partners without any government supervision. For example, the Spanish company Ros Roca will build the factory, Boucard Pest Control will be one of the firms collecting garbage, and the Atkins company is carrying out the environmental impact study.
“We haven’t been able to move forward yet because there are international partners who want to make sure the project is carried out in a manner that is transparent, competitive and unbiased,” Minister Delegate for Energy Security, René Jean Jumeau, confirmed.
More worrying is the financial commitment EDH and the government would make for the next 30 years. Phoenix is a “Build, Operate, Transfer” or “BOT” project, where the investors get paid to run the factory during a period of time. They will “make money on their investment an then leave,” the IFI employee told HGW.
The project is a big liability for the government,” he added, noting that the Haitian government doesn’t have the capacity to manage the existing electricity system. Indeed, a recent IDB report claims that “[t]otal electricity losses are close to 70% of electricity production with commercial losses representing estimated revenue loss of US$161 million/year for EDH.”
IEP recognizes the challenge.
“After 1986, there was a popular movement that became populism and then turned into demagogic governments. All of that cost the country dearly,” the local representative said, adding that the “bad governments” allowed the population to make illegal connections to the grid in order to maintain their popularity.
By signing an accord with IEP, the state and EDH will promise to pay a private (and mostly foreign) company for 30 years. Port-au-Prince has already experienced what happens with the state misses a payment. The lights go out.
The Phoenix Project also has two main challenges at the environmental level.
The first concerns Haiti’s trash. According to many studies and sources, Haiti’s garbage is too “organic” and moist, EDH’s Ronald Romain recognized.
“Our garbage doesn’t have the necessary calorie level” for an incineration-power plant, he said.
To assuage doubts, IEP did a two-month study that it claims proved “we have the calorie level we need,” the local representative said. But, like the environmental impact study being done by Atkins, it was paid for and supervised by IEP. Thus, its results are not reliable. HGW did not receive a copy of the report.
But another recent (2010) study – “Haiti Waste-to-Energy Opportunity Analysis,” done by a private firm for a US government agency – raises many questions about IEP’s claims. Looking at three technologies for turning garbage into energy – combustion or incineration, gasification and biodigestion – the report took a clear position.
“The waste stream in Haiti is estimated to contain between 65% and 75% organics… Food waste typically does not make a good fuel or feedstock for combustion or gasification systems. This is because the waste has high moisture content,” the report notes.
The last challenge for the fans of Phoenix concerns the health and environmental risks. Because they are so great, there is a global anti-incineration movement that has even reached cities like Washington, DC. The reasons? Incinerators can emit a cocktail of hundreds of poisonous chemicals and heavy metals like mercury, arsenic and lead. [Download GAIA Factsheet-pdf]
According to GAIA, the Global Alliance for Incineration Alternatives, “in some countries, like Mexico, Brazil, Chile and Argentina, there are state or provincial laws, or municipal ordinances, which prohibit the burning of trash.”
Nevertheless, the local representative of IEP said the Phoenix installation would not have any negative effect on the environment or on health.
“After the trash is burned, the emissions will be treated using a sophisticated filtering system. This will allow us to remove the dangerous and sometimes valuable heavy metals,” he explained. “Our emissions will be less toxic than those coming from the existing electricity plants… and less toxic than the smoke that comes from the open-air burning of trash, also.”
But anti-incineration groups like GAIA say “Even the most technologically advanced incinerators release thousands of pollutants that contaminate our air, soil and water,” citing numerous studies to prove their point.
Will the bird emerge from the ashes again?
The future of the Phoenix Project is not certain.
EDH operates at a loss and two studies remain unfinished. OPIC has not yet given the green light. In addition, many wonder if a government that cannot prevent the illegal felling of trees and use of Styrofoam dishes (banned since last year) can adequately supervise an incineration plan.
IEP claims it has the interest and even the support of many actors inside and outside of Haiti. But HGW discovered many reserves. And many risks.
The IFI employee thinks that all the criticism means that perhaps “the project will die on its own.”
Or perhaps, if Haitian and international authorities continue to meet behind closed doors, to carry out projects without transparency, and to insist on speaking anonymously, this Phoenix, like its namesake, will continue to be reborn from its ashes.
* Note: IEP notes that lignite is not definitely off the table, according to executive Edward Rawson in an email addressed to HGW on December 10, 2012: “[T]he creation of a [lignite] mine and exploitation in partnership with the Government of Haiti remains part of the current agreement between IEP and GOH. This may eventually lead to the development of a power plant near Maissade.”
The local IEP representative added: “The foreigners refuse to let us use lignite because it pollutes too much. However, in their countries, they use coal… In fact, coal is what made Pittsburg rich, for example!”
Haiti Grassroots Watch is a partnership of AlterPresse, the Society of the Animation of Social Communication (SAKS), the Network of Women Community Radio Broadcasters (REFRAKA), community radio stations from the Association of Haitian Community Media and students from the Journalism Laboratory at the State University of Haiti