IDB approves grants for industrial park and energy in Haiti
The US$90 million in grants will provide support for jobs and investment in northern region and expansion of access to electricity.
PORT-AU-PRINCE, Haiti, Wednesday July 27, 2011 - The Inter-American Development Bank (IDB) has announced the approval of two grants totaling US$90 million for Haiti to help finance the construction of an industrial park in its northern region and to support the government's efforts to modernize its energy sector.
A US$55 million IDB grant will support the first phase of development of the Northern Industrial Park (NIP), which will have capacity for some 50,000 workers. The facility will be owned by the Haitian state, which has another manufacturing park in Port-au-Prince.
The NIP will be located on a 250-hectare site near the town of Caracol, between the cities of Cap Haitien and Ouanaminthe. IDB resources will finance several investments within the perimeter of the park, such as factory buildings, internal roads, water storage tanks and waste water treatment plants.
'The U.S. government will support the NIP project by building a power plant to supply electricity to the industrial park and to surrounding communities, as well as by investing in housing for factory workers and their families and improvements to port facilities in Cap Haitien," a statement from the IDB said.
The project will be carried out by a technical execution unit of Haiti's Ministry of Economy and Finance that successfully completed more than 50 basic infrastructure projects under a previous IDB-financed operation. Construction inside the NIP's perimeter could start later this summer and the first phase could be finished by the first quarter of 2012.
In partnership with the U.S. Department of State, the IDB has been helping Haiti attract tenants to the new park. One of them, South Korean textile manufacturer Sae-A, expects to hire as many as 20,000 workers and build the country's first textile mill.
"Tenants seeking to use U.S. trade preferences for Haiti-based manufacturers will have to abide by local laws and international best practices regarding labor conditions. The NIP is also likely to generate tens of thousands of additional jobs in activities such as transportation, shipping and food services," the IDB said.
"The NIP will be the keystone of a broader regional development plan featuring investments to boost agricultural production, develop value chains involving local small and medium-size enterprises and promote tourism based on northern Haiti's cultural attractions."
A US$35 million IDB grant will support Haiti's efforts to modernize its energy sector and improve the financial and operational management of the state power company, Eléctricité d'Haïti (EDH). This is the first of three policy-based operations the IDB expects to make over three years to help Haiti develop a reliable and sustainable electricity system.
At present, about 70 percent of Haiti's population has no access to electricity. In areas with coverage, service averages 10 hours a day but is plagued by outages. Available generation capacity stands at less than one-third of the estimated 500 megawatt demand.
In coordination with other international donors, the IDB has provided Haiti grant resources to repair electricity infrastructure affected by the 2010 earthquake. The Bank is also supporting the rehabilitation of the Péligre hydroelectric plant, the use of solar energy and EDH's efforts to reduce technical and commercial losses by upgrading its equipment and boosting billing and collection efficiency.
"The policy-based grants will assist the Haitian government in carrying out a broad reform programme aimed at expanding access to energy for urban and rural households, reducing the country's reliance on fossil fuels for power generation, improving the reliability of electricity services and transforming EDH into a viable utility. Another goal is to encourage more households to switch to liquefied petroleum gas from charcoal, the most commonly used cooking fuel in Haiti," the IDB said.
It added that, combined with public and private investments, these reforms will enable Haiti to establish a robust regulatory and institutional framework to promote the expansion of its energy sector.