Misjudged Demand, Stalled Reforms, and Deficient Oversight Impeded USAID/Haiti's Sustainable Electricity Goals

Audit Report
Report Number
9-521-19-001-P
USAID/Haiti has not achieved its goals for electricity modernization or expansion in northern Haiti. By January 2017, the Pilot Project for Sustainable Electricity Distribution generated reliable electricity and supplied it to the Caracol Industrial Park and about 8,000 Haitian households. However, customer services were underdeveloped, and the utility was not self-sustaining because of stalled energy sector reforms by the Haitian Government—which found that charging customers more was risky politically—and understaffing at the mission, which led it to focus on ensuring reliable electricity for the industrial park instead of on customer services in communities or day-to-day project oversight. Low electricity demand from industrial customers also disrupted USAID’s plans to expand the power plant’s generating capacity. The mission has attempted course corrections, notably revising its long-term strategy to transfer responsibility for the power plant to a private sector entity rather than the Haitian Government. Yet, after investing more than $30 million and extending the project contract multiple times, the mission is still on the hook for the utility’s sustainable operation until it can find a private sector operator to take over or otherwise conclude the project. USAID/Haiti agreed with both our recommendations to move the project to the next stage and help address project oversight deficiencies. Building Local Capacity

Recommendations

Recommendation 1

USAID/Haiti document and implement a detailed plan to conclude the Pilot Project for Sustainable Electricity Distribution that includes deliberate benchmarks and timelines for modernization and expansion to best position the utility for the private sector transfer strategy at the end of the project, and a formal contingency plan in case a private sector operator is not on track to take over the utility by the specified time.

Questioned Cost:
$0
Recommendation 2

USAID/Haiti implement a plan to address the longstanding staffing challenges at USAID/Haiti, reported repeatedly in the mission’s Federal Manager’s Financial Integrity Act of 1982 certifications, to enable the mission to better address the project oversight deficiencies identified in this report.

Questioned Cost:
$0