Haiti’s “Snake-Oil Salesmen” Ӫ Société Générale d’Énergie SA (Sogener), E-Power and Haytrac

“I’m looking you in the eye today to say: Your president, whom you voted for, is not guilty of corruption.” Haitian President Jovenel Moïse, June 12, 2019, Time

“When it came to the electricity supply…beware of overlooking one of the four sectors in the city – had to be taken off the grid for at least three hours in every twelve. The grid…was under the command of American captain…” – The Fourth Estate, Jeffrey Archer

It seems the now fallen President did not listen to the words of the people and the country’s famous Haitian artist, Frankétienne. “Beyond the rage of seasonal storms there are voices that speak and bleeding guts.”

Corruption and catastrophes befall Haiti the way spies and espionage are leveraged in crises and war. With nothing to lose, does one finally face the ‘eye of the storm’ and gut the belly of power beasts. Guard, pit is adorned with sneering snakes.

On “July 7 – Haitian President Jovenel Moise, a 53-year-old former businessman who took office in 2017, was shot dead.”  Then a major earthquake hit leaving in its wake reportedly over 2,000 dead and hundreds missing with over 12,000 injured.

And what of those who control Haiti’s electric power? State-owned Electricité d’Haïti (EDH) buys electricity from three independent power providers (Société Générale d’Énergie SA (Sogener), E-Power and Haytrac.

Contract with Sogener going back to 2005 was halted on December 4, 2019 when according to The Economist, Intelligence Unit:

“Government takes control of Sogener power stations…announced that it would suspend payments to the company—as well as other major power companies, including E-Power and Haytrac—claiming that they had mismanaged public funds and owed money to the state.”

International aid and think tanks cannot save Haiti from itself. Or, shall we say, from business snake-oil salesmen.

The Copenhagen Consensus Center with the financial support of the Government of Canada presented the March 22, 2017 working paper “TRANSMITTING AND DISTRIBUTING ELECTRICITY IN HAITI – Haïti Priorise” by “Jean Edouard Pauyo, Energy Specialist.

“The biggest obstacle to the development of the electricity sector in Haiti is the weakness of institutions, manifested particularly by the deficiency of respect for property rights, the basic rules of justice, by chronic crises of governability and the general level of corruption.”

Yet, the subject of regulation did not come up in the paper. Right, because as Pauyo points out in his introduction, “The purpose of this paper is to determine the Benefit/Cost (BCR) ratios of two interventions in the electric power sector in Haiti. The first intervention is the construction of a national electricity transmission network and the second is the rehabilitation and extension of distribution networks throughout the country.”

However, as Pauyo’s list highlights, the warning of risk was loud and clear:

1. Level of electricity theft

2. Political instability, lack of cohesion and vision at the political level in the country

3. Failure and dependence of the state on the international community

4. Lack of administrative and legal systems to combat fraud and corruption and to ensure

protection property rights and compliance with standards in general

5. Weakness of government institutions and lack of development strategy

6. Anarchic urbanization

7. Lack of local capital for infrastructure development

Corruption and lack of regulation begs the question: Why was there such a push for “sustainable” projects in Haiti in the past? Why not in the West?  Well, things have changed as “more recently, there has been a lack of interest on the part of the international community to finance major infrastructure projects in favor of small off-grid or micro-grid electrification projects.”

To answer these questions one needs to turn to the people most affected. You will find Haiti, Rise “Masters of the Dew!” Defiant Force by the “Wretched of the Earth”

Blackout Blueprint

No matter the number of blueprints for building in Haiti, “Without an overseeing regulatory body, EDH has essentially acted as its own regulator, making most decisions unilaterally about the right to operate on the grid, the terms and conditions of operation, tariff rates, and investment opportunities.”

According to Cijn “Venezuela, PetroCaribe, and the “Orgy of Corruption”:

“PetroCaribe supplied oil at market prices in exchange for a 40% down payment.  The 60% balance would be repaid over 25 years at 1% interest. Governments sold the oil at market prices to local distributors, earning immediate profits from the deferred balance.”

Haitians had previously asked, PetroCaribe, where’s the money? Are they now asking where are the Snake-Oil Salesmen hiding? Like plumbers facing obstructed pipes, it was time they “snaked the drain.”

Recall the December 16, 2019 headline in the Miami Herald, “Haiti wants to reform its energy sector. So police showed up to arrest power providers.”

“After Moïse accused Sogener of over-billing the state and “selling blackout,” in reference to the chronic blackouts that occur in the country…Days later, the state filed a criminal complaint accusing Sogener of over-billing, forgery and other crimes…warrants were then issued for…the ex-head of EDH, Serge Raphael, and former Public Works Minister Frantz Verella and Finance Minister Daniel Dorsainvil…”

Like snake charmers, did some escape? Unlike Sogener, “Moïse administration has not gone after either of the other two power providers, nor any relevant ministers and EDH directors who served under either former President Michel Martelly or Moïse’s own administration.”

Eying & Gutting the Belly of Power Beasts

Global interest in ‘electrifying’ Haiti goes back decades. Worldwatch Institute points out in their 2014 paper Haiti Sustainable Energy Roadmap:

“Although EDH has its own generation park and technically holds a monopoly over the country’s electricity system, most power is currently produced by independent power producers (IPPs), including Sogener, E-Power, and Haytrac. IPPs have been operating in Haiti’s electricity sector since 1996.”

Important, these IPPs are not blindly investing with their own money in what many see as a big gamble. Nor do they go at it alone. Financial support comes from the World Bank and International Finance Corporation (IFC).

Investors and “Many companies will not invest in Haiti by themselves, and receiving support from organizations such as the IFC could provide the security they need to make investments, as was the case with E-Power’s 30 MW power plant.”

Clearly the World Bank and IFC have a vested interest as stakeholders. For example, the “IFC-Sponsored E-Power Plant Kicks Off Operations in Haiti to Increase Energy Capacity” highlights “Creating Markets. Creating Opportunities.”

Right, create markets and opportunities. But for whom?  IFC and its stakeholders? Remember, “E-Power is majority-owned by a consortium of local investors led by Daniel Rouzier, a Haitian businessman.”

Daniel-Gerard Rouzier, Chairman of E-Power Chairman, said, “Many have been inspired by the resilience and spirit of the Haitian people in coping with the difficulties of the past year.”  And what exactly did these businessmen do for the people then and now?

Right, like PetroCaribe, where did the billions go?  But don’t expect to find IFC on your island. They conveniently have international offices, specifically in the US, in Washington, D.C.

Speaking of the US, if any country has first-hand experience with “creating opportunities” it is the American government. Its recent economic “stimulus package” reeks with the “cobra effect.”

Ӫ Haiti and Afghanistan: “Snake Eyes”

Case study of Haiti’s sustainable future has been in the making for decades. But did it also serve another purpose? A control study experiment of fragile countries or “nation building” as in Afghanistan?

Both share socioeconomic and political instability. Yes, but aren’t all nations of the world now fragile and looking to build a sustainable future? Recall the Worldwatch Institute paper “Haiti Sustainable Energy Roadmap” Key Findings:

“Sustainable energy investments do not take place in a vacuum…wide breadth of challenges from food security and clean water access to health, education, environmental degradation, and infrastructure, what should the top priorities be…With limited resources and time, it is crucial that focus is informed by what will do the most good for each gourde spent.”

Future for Haiti and Earth?

Worldwatch, speaking of food security and clean water, are you watching what’s happened in the last two months? Pemex “eye of fire” oil spill in the Gulf of Mexico and the toxic-waste leak at a diamond mine company in the Democratic Republic of Congo that “killed 12 people and sickened thousands?”

Global Warming or Climate Change, call it what you will, WORLD faces the challenge of “Harnessing Domestic Energy Resources to Build a Reliable, Affordable, and Climate-Compatible Electricity System.”

Ironic is it not? Think tanks and governments have invested time and money to come up with “pathways” and “roadmaps” for Haiti, a place where few paths or roads manage to exist or stand.

Haiti like others in the Caribbean Sea are said to have a “tremendous potential” for “Building a Sustainable Energy System.” But one cannot build on sand and corruption and not expect it to fall.  Just ask Afghanistan.

Like powerful Western leaders and business contractors who created mirages in the deserts of the Middle East, Haiti’s government, State-owned Electricité d’Haïti (EDH), and snake-oil salesmen made sure the people heard the siren calls from the sea.  

Time to Eye & Gut the Belly of Power Beasts!