Haiti - Power Project

F lIE C OPY Document of C~~~~IRCULATING COPY FILE COPY Document of TO BE RETURNED TO The World Bank FOR OFFICIAL USE ONLY Report No. P-1786a-HA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF HAITI FOR A FIRST POWER PROJECT June 3, 1976 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Currency Equivalents Currency Unit Gourde (G) US$1 G5.00 G1 US$0.20 G1 Million US$200,000 Fiscal Year October 1 - September 30 Units and Measures GWh Gigawatt hour = 1 million kWh kWh 3 kilowatt hour km kilometer 0.62 mile kW kilowatt MW Megawatt 1,000 kW kV kilovolt Abbreviations and Acronyms EdH Electricite d'Haiti SOFRELE - Societe Francaise d'Etudes et de Realisation d'Equipements Electriques  FOR OFFICIAL USE ONLY INTERNATIONAL DEVEWPMENT ASSOCIATION REPOIT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUIIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF HAITI FOR A FIRST POWER PROJECT 1. I submit the following report and recommendation on a proposed development credit uo the Republic of Haiti for the equivalent of US$16 million on standard IDA terms to help finance a first power project. The credit would be onleht by the Government to Electricite d'Haiti (EdH) at an interest rate of 8.85 percent with a repayment period of 25 years, including a grace period of two years. PART I - THE ECONCMY 2. The most recent economic report on Haiti, Report No. 410-HA entitled "Current Economic Position and Prospects of Haiti" was issued on April 18, 1974. A Bank Economic Mission visited Haiti during March/April of this year and is currently preparing a new report. Updated social and econo- mic data are presented in Annex I. 3. Haiti is one of the poorest nations in the world, and the only country in the Western Hiemisphere included in the U.N. list of 25 least developed nations. GNP per capita in 1975 stood at about US$170. An infant mortality rate of about 150 per thousand live births, an average life expec- tancy of 48 years, low nutrition and sanitation standards (malnutrition and gastro-enteric diseases account for over half the deaths in the country) and an adult literacy rate of about 20 percent characterize the depressed living standards of the population. 4. The country's natural resources are limited. Of the country's total area, only about 1.5 percent is well suited to agriculture although twice as much is actually under cultivation. The remaining 70 percent is too arid and steep for cultivation. The average density of population is nearly 500 per square kilometer of arable land, one of the highest in the world. In addition, much of the country suffers from frequent hurricanes, floods and droughts. Krnown mineral resources are modest, consisting of bauxite, copper and ligrnite. There is, nevertheless, scope for expansion of. agricultural output thrcugh improvement of presently low levels of product- ivity. The country's proximity to the U.S. market, and the availability of abundant labor provide the basis for industrial development while Haiti's striking scenery and distinctive culture offer a potential for tourism. 5. Economic growth and social progress have been hampered by periods of political instability which did not permit the development of an adequate technical and physical infrastructure. Inadequate maintenance reduced the efficiency of the limited irrigation network. The lack of an adequate trans- port infrastructure and its poor maintenance hampered the development of commercial agriculture. Power generation capacity is also well below the Latin American average. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise bi disclosed without World Bank authorization.  6. In marked contrast to the previous decade when the economy stagnated, Haiti enjoyed some growth in 1968-74. Expansion of small-scale manufacturing and assembly operations, tourism and construction led to real average annual increases of GDP of about 3.6 percent while population grew at an estimated annual rate of 1.7 percent. These activities contributed noticeably to improv- ing economic conditions in Port-au-Prince. Employment in assembly operations, for example, increased from 10,000 in 1971 to 20,000 in 1974. Agriculture, however, which employ- 80 percent of Haiti's population and accounts for about half of GDP and about 60 percent of merchandise exports has as yet shown little dynamism. Progress in agriculture will require the adoption of improved pro- duction techniques and provision of greater incentives to farmers, as well as the improvement of transport facilities. 7. In 1975, GDP growth fell to 1.2 percent. Agricultural output stagnated mainly as a result of a severe drought which affected the northwestern part of the country. Moreover, adverse economic conditions in the United States brought about declines in exports of mining products, in orders for products of the light assembly industry as well as in industrial investment. Construction activity also slowed down significantly. 8. In the past three years the Government has adopted several measures to encourage agricultural production. In 1973 the specific tax on coffee which, by absorbing a large share of export proceeds, weakened producer incentives when international prices were low, was replaced by a progressive ad valorem levy. In 1974 a nationwide five-year coffee production program was initiated with the support of AID to provide small farmers with a package of technology, credit, fertilizer and training. A substantial increase of the prices paid to farmers for sugar cane and to the mills for sugar production was approved. The export tax on sugar was lowered from its previous rate which was as high as 80 percent at the margin. The tax on agricultural products marketed domestically, levied each time a commodity changed hands, was eliminated. In addition to these measures, the Government intends to launch during the next two years impor- tant investments in the agricultural sector. The projects, which are to be located in different regions of the country, are designed to increase the level of income and employment of the rural population. 9. The Government is carrying out an important investment program in which the provision of the country with infrastructure facilities, essential to the development of the directly productive sectors, occupies a central place. Public investment has grown at about 46 percent in real terms during 1975. In the area of Port-au-Prince, projects are underway to expand and improve port facilities and the water supply system. Major roads linking the northern and southern regions of the country are being reconstructed. The Five-Year Develop- ment Plan (1977-81) that the authorities are currently preparing is expected to stress regional development. In addition to projects directly concerned with increasing agricultural production, the Plan envisages the extension of health, sanitation and education services to the rural population. Development expen- ditures would increase from about US$37 million per year in 1973-75 to about US$66 million per year in 1977-81.  10. The successful execution of such a program will require a substan- tial increase in the flow of external assistance. In the period 1973-75 net external lending financed only about 17.4 percent of development expenditures. Official grants and private donations financed the equivalent of 36.9 percent. The remaining was financed to the extent of 26.6 percent by public savings and 19. 1 percent by internal borrowing. On the basis of disbursements of already committed loans and of likely future annual commitment levels of US$45-Us$5O million, it is expected that net disbursements from official lending agencies will finance about 52 percent of development expenditures in the period 1977-81. Capital investment g:cants from bilateral agencies are expected to finance 8 per- cent of development expenditures. Other official grants and private donations are expected to continue to represent an important, albeit declining, share of development expenditures (about 27 percent). Public savings would finance the remaining 13 percent. 11. Earmarking of tax revenues to finance public investment expenditures as well as the operations of autonomous institutions has acquired increased importance in Haiti during recent years. Earmarking has taken place at the expense of the Central Government Operating Budget and led to a decline in real terms since 1971 of Central Goverrment current expenditures. This has, in turn, impeded badly needed improvements in the quality of public services. Earmark- ing has also reduced the relative importance of the Central Government Budget as an instrument for the allocation and control of public sector revenues. The Government has initiated a detailed analysis of the origin and destination of earmarked accounts which could provide a better insight into the economic nature of public sector revenues and expenditures and the basis for a reform of the budgetary system. 12. The growth of public savings will in the future be constrained by the need to substantially increase current expenditures in order to upgrade the quality of public administration and to meet sharply rising operating expendi- tures generated by new development projects in agriculture, education, health, road maintenance and other sectors. In view of this constraint and because of the extreme poverty of th,s country, its fragile balance of payments and the severe limits to raising additional fiscal resources - taxes represent already about 12 percent of GDP, no mean achievement for a country as poor as Haiti - the successful execution of the development plan will require external financing covering a high share of the cost of development projects, including some financing of local costs. 13. Haiti's balance of payments deteriorated in 1974 and 1975. The deterioration in 1974 was largely explained by higher import prices. In 1975 the volume of bauxite, siEal and essential oils exports declined mainly as a result of the world recession. Food imports increased sharply partly as a result of the effects of a drought which reduced domestic production. In addi- tion, substantial payments were made to finance public investment in the tele- communication sector. As of September 30, 1975, end of the Haitian Fiscal Year, net international reserves of the National Bank as well as those of the consoli- dated banking system were negative on the order of US$4 43 million and US$24 million respectively, while gross reserves of the banking system were only  - 4 - US$12.8 million. However, the situation improved in the last five months, with an addition of US$9.2 million to the reserves. Net reserves of the National Bank were at US$4.9 million as of February 28, 1976. 14. At the Haitian Government's request, a high level Joint Consultative Committee was established in January 1976. It includes representatives of the Haitian Government as well as of multilateral and bilateral agencies actively providing assistance to Haiti. The Committee's role is to coordinate foreign assistance, both fin' ncial and technical. As one of its major functions, the Committee,which should convene every six months, is to assess the availability of counterpart funds for investment projects financed by external official agencies, both required and likely to be available. The Committee will thus be in a position of making recommendations to the Haitian Government on measures to be taken in order to ensure that public savings are adequate to meet the local financing requirement. 15. Haiti's resource gap is expected to continue to widen in the medium term, reflecting the import requirements associated with the Government's investment program. There has been relatively little net foreign borrowing in the last decade and the debt service ratio is relatively low (6.3 percent in 1975). Nevertheless, the balance of payments is likely to constitute a constraint to economic development in view of the limited growth prospects of Haiti's agricultural exports, and because export diversification through the development of manufacturing and tourism, is still at an early stage. In view of the country's poverty and the dependence of its balance of payments on world demand for a few commodities, Haiti will continue to require external assistance on concessionary terms for a long time if it is to achieve a significant improve- ment in the standard of living of its population. PART II - BANK GRCUP OPERATIONS IN HAITI 16. The Bank Group has had five operations in Haiti. A US$2.6 million Bank loan (lhl-HA) was made in 1956 for highway rehabilitation and a US$350,000 IDA credit (32-HA) was made in 1962 for highway maintenance. Two IDA credits - US$10 million (478-HA, Third Highway Project) in 1974 and US$20 million (556-HA, Fourth Highway Project) in 1975 - were made to Haiti for reconstruction of the Northern Road. In February 1976, a credit of US$5.5 million was made for a First Education Project. Execution of the Third and Fourth Highway Projects is making good progress, with disbursements ahead of appraisal estimates. The Project Unit for the Education Project is already established; the credit was declared effective on May 20, 1976. Annex II contains a summary statement of the Bank loan and IDA credits as of April 30, 1976 and notes on the execution of ongoing projects. 17. The Government organizes twice yearly meetings to coordinate assistance given to the transport sector by the various aid agencies. USAID is financing purchase of road maintenance equipment, supplying technical assistance for a maintenance training program and financing improvement of feeder roads. IDB is  financing construction of the Southern Road and expansion of the port of Port-au-Prince. France is financing construction of the road linking the south coast city of Jacmel to the Southern Road and is providing assistance to improve facilities at provincial airports. UNDP is financing the tech- nical assistance comporent of the Third Highway Project (with the Bank as executing agency) including training of local contractors in administration, engineering and management as well as a study of Haiti's transport sector which is expected to recommend future investment priorities. 18. IDB, Canada, France, and IDA are cooperating closely with the Government in projects aimed at meeting the most urgent needs in the education sector. IDB has lent for agricultural education and is providing technical assistance for the preparation of a rural primary education project. Canada is supporting a technical education project in Port-au-Prince and France is providing technical assistance for a new National Pedagogical Institute and teachers for technical and vocational schools. The recently approved IDA project is designed to begin to meet some of the highest priority needs for revision of primary school curricula, expansion of educational opportunities in rural areas, upgrading of teacher qualifications, and support for adult literacy programs. 19. Aid agencies are also supporting other sectors of the Government's development program. IDB has made loans for agricultural and industrial credit, and improvement in Port-au-Prince's water supply. It is providing assistance to the Government for the preparation of integrated rural development projects. USAID has given assistance for Haiti's malaria eradication program, for commu- nity development and for modernization of the production and marketing of coffee. Canada is supporting a rural development project in the southern peninsula and has undertaken a survey of Haiti's water resources for both irrigation and power potential. The Federal Republic of Germany is providing financial and technical assistance for regional development in the Gonaives Plain. UNDP is financing a number of programs including a survey of Haiti's mineral resources, technical assistance through UN agencies in education and rural development, and food relief. Of special significance to Haiti's development in education, health and agricultural services, are the many and varied programs of the voluntary agencies. Table 1: LOAN COMMITMENTS TO HAITI, 1966-75 (US$ million) IDA IDB Bilateral Agriculture - 0.7 6.0 Industrial Credit - 1.1 - Transport 30.0 64.7 3.2 Education 5.5 1.3 - Water and Sewerage - 7.4 - ITl1AL 75. 2 9.2  - 6 - 20. Prospective IDA lending operations in Haiti take into account our present knowledge of Haiti's development needs and the ongoing and planned roles of other official lending agencies. As regards transportation, a high priority sector in which IDA is already playing a major role, selection of future transportation projects for financing by IDA would take into account the recommendations of the transport study mentioned in paragraph 17 which is expected to be completed in July 1976. 21. The Government financed construction, in the late 1960's, of the Peligre hydroelectr;-: plant to supply power to Port-au-Prince. Since the plant, assuring stuady supply of electricity, became operational in 1971, Haiti has attracted a number of labor-intensive assembly plants. The growth in demand for power has been such that serious power shortages are expected by 1977 unless additional diesel electric plants are installed by then. In February 1975 the Government-owned power company, Electricite d'Haiti (EdH), engaged consultants to prepare the proposed project which would increase the generating capacity and distribution system for Port-au-Prince. In order to investigate long-range solutions to the supply of Haiti's national power needs by maximizing the use of Haiti's own sources of energy, UNDP is financing a national power sector pre-investment study for which the Bank is executing agency. Consultants began field work i4n January 1976. Their assignment includes a study of the potential use of Haiti's deposits of lignite as fuel for thermal electric plants. The consultants, in their overall national study, will also evaluate the recommendations for potential hydropower plants which are being made by the ongoing survey of Haiti's water resources sponsored by CIDA. This study is expected to identify high priority projects which, together with the follow-up power proJect for Port-au-Prince (see paragraph 57), could be suitable for financing by IDA and other official lending agencies. 22. An IDB/FAO/IBRD agricultural survey mission identified in mid-1973 several key regions for agricultural development. As a result of that study, the Government asked IDA to support a rural development project in the Northern Plain, a densely populated region with considerable agricultural potential. An FAQ Cooperative Program mission visited the region in January/February 1975 identifying potential project items, namely, agricultural credit, production of improved seeds, extension services, education and health services, access roads, drainage and rehabilitation of irrigation works. The project was appraised in April-May 1976 and is scheduled for presentation to the Executive Directors early next year. 23. WHO/PAHO, with UNDP financing, is undertaking the preparation of a water supply project in provincial towns for which the Government has requested IDA financing. The project, besides improving and extending existing water systems, would strengthen the technical and administrative capabilities of the Services Hydrauliques, which in the future is expected to be a key agency in expanding water services in rural areas. 24. The Bank Group's share in Haiti's publicly-guaranteed external debt outstanding and disbursed amounted to about 13 percent at the end of 1975. The Bank Group's share of external public debt service during 1975 was about 0.5 percent. Its share of outstanding publicly-guaranteed external debt would rise to about 30 percent by 1980; its share of external public debt service would be of the order of 7 percent.  - 7 - 25. There have been no IFC operations in Haiti to date but several exploratory missions have recently visited the country. PART III - THE POWER SECTOR Energy Resources 26. Haiti's known energy resources are scarce. There are several known deposits of lignite out Little is known of their size, facility for mining or their suitability for generation of electricity or as a domestic and industrial fuel. In January 1976, consultants began a study of several of the lignite deposits as part of the larger UNDP-rinanced power sector pre-investment study. Should lignite prove to be a feasible source of energy for both generation of electricity and as a domestic fuel, important benefits could be realized in reducing the country's dependence on imported fuel as well as reducing consumption of locally produced charcoal which is leading to depletion of Haiti's few remaining forests. The consultant's report on the potential uses of lignite is expected by the end of 1976. Identification of Haiti's hydroelectric potential is being carried out under the CIDA-sponsored study. There are no known geothermal sources. Explo- rations are underway to identify exploitable deposits of petroleum. The main source of commercial energy is imported refined petroleum products. Supply of Power 27. Port-au-Prince has had access to a regular supply of electricity since the Peligre hydroelectric project came on line in 1971. This has made the recent rapid growth of assembly industries possible but, because of current short supply, a number of local industries have not been able to obtain connections to the power system. Several provincial towns also have public electricity. Only one- fourth of the Port-au-Prince households have access to electricity although they account for 96 percent of the approximately 27,000 households in all of Haiti that have electricity. National per capita electricity consumption was 28 kW~h in 197h (32 kWh without allowance for losses in grids), compared to 150 kWh in Honduras and 190 kWh in Ivory Coast. In the Port-au-Prince area, industrial consumers account for 44 percent of electricity consumption while residential consumers account for 33 percent, commercial consumers 10 percent, public light- ing 6 percent and other users for 7 percent. 28. Metropolitan Port-au-Prince: Until the Peligre hydropower plant came on line, the Port-au-Prinj,e system was supplied only by a diesel power plant with nominal capacity of L7 MW. The capacity of this old plant (12 machines, average age 28 years) is 'low 14 MW (3 MW capacity having been taken to provin- cial towns), but its present condition permits production of a base load of only 5.4 MW and of about 7.8 HW for peaking purposes. 29. The Peligre dam, 54 km north-east of Port-au-Prince, was first built in the mid-1950's for flood control and irrigation of the Artibonite Valley. In the 1960's its use was modified to include generation of power for Port-au-Prince and the first generator wals put into service in 1971. Two more generators were  - 8 - commissioned in April 1972 and January 1974. Each generator has a nominal capacity of 15.7 MW resulting in a total plant capacity of 47.1 MW. The average generating capacity of the plant is 172.5 GWh in the rainy season and 66 to 72 GWh in the dry season. 30. Rest of the Country: Isolated diesel plants and a small hydro plant (at Jacmel) for 8 total capacity of 9.5 MW serve 10 provincial towns. Captive power plants operated by some major industries (mainly cement and sugar mills) have a ^ombined capacity of 17 MW. Power Sector Organization 31. In 1971, the Government-owned power company, Electricite d'Haiti (EdH), was established to take over the new Peligre hydroelectric plant and a privately-owned power company serving Port-au-Prince whose concession had expired. According to its charter, EdH is also responsible for the develop- ment and distribution of electric power throughout the country. It has recently assumed nominal control of practically all public service electric power facilities in the country. 32. Authority to regulate the power sector is vested in the President of the Republic and exercised through key government ministers who form, the Board of Directors of EdH. The Minister of Public Works is chairman of the Board. There is no separate tariff regulatory commission. The basic law creating EdH states that tariffs. investment programs and borrowings must be approved by the President of the Republic. These procedures have been satisfactory in the past. 33. When the Haitian cabinet was reorganized in March 1976, EdH's Director General was replaced. The new Director General is EdH's former Technical Manager; his replacement as Technical Manager is an engineer with many years of experience in EdH. The Director General is also assisted by an Administrative Manager with responsibility for the financial and administrative departments. Besides maintaining staff, with qualifications acceptable to IDA, in these key positions, EdH would appoint, not later than July 31, 1976, a training officer, a system planning officer and two assistants for budgeting and financial planning (Section 3.01(b) of the draft Project Agreement). To strengthen management and technical skills, EdH is undertaking training prog- rams in Haiti and abroad (see paragraphs 45 and 46). The Govern-ment will amend EdHIs basic law to effect recent changes in the company's organization, espe- cially in creating the position of Technical Manager (Section 4.04 of the draft Credit Agreement). 34. The Government does not yet have a rural electrification policy. The Federal Republic of Germany is financing a small 2.5 MW hydro plant to supply energy for irrigation purposes in the Artibonite-Gonaives area and for supplying public services to the town of Gonaives. Plans for general electrification of towns and larger villages will be formulated on the basis of recommendations to be made by the ongoing power sector pre-investment study.  -9- External Aid and Planning 35. Besides the Gsrman assistance mentioned above for a small hydro plant, there has been no lending from official development agencies for the power sector. In 1972, UNDP financed technical assistance supplied by the United Nations Office of Technical Cooperation to undertake a preliminary survey of Haiti's elect:'icity needs and to make reco.niendations for future investments. By 1974, it had become evident that with the rapid increase in demand for electricity, Port-au-Prince would not be able to wait for construc- tion of hydro or lignite-fired plants, should they prove feasible, and that an interim diesel plant would be needed to avoid serious shortages occurring by 1977. The Government hired consultants (SOFRELEC/France) to prepare the pro- ject under consideration. At the same time, the Government requested UNDP financing (and Bank assistance as executing agency) to hire consultants (SOFREIE/France) to make a national power sector pre-investment study which would investigate the possible uses of lignite and incorporate the findings of the CIDA-sponsored study of Haiti's hydraulic resources. The consultants will prepare a program for pcower generation and transmission for the period 1982-95 on the basis of the lignite and hydro studies and of countrywide projections of future power demand. Constraints on Sector Development 36. The major constraints to sector development are: (a) lack of coordination among the Government, EdH and the private sector; (b) lack of sufficient skilled manpower; and (c) inadequate financial resources. Notwith- standing the fact that EdH has been charged with the responsibility for national development of the power sector, installation of equipment still continues in the provinces without the benefit of a master plan or of central control. As a first step towards the coordinated development of the sector, the Government has given assurances that future investments in the power sector would be made according to a plan, acceptable to the Association, taking into account the recommendations of the ongoing sector study, which is to be completed by September 30, 1977 (Section 4.01(a) of the draft Credit Agreement). Any invest- ments to be undertaken between credit signing and completion of the project, requiring outlays in excess of US$1.5 million in any one year, would be in agreement with the Association (Section h.02 of the draft Credit Agreement). Investments made after project completion and exceeding US$2 million would be in accordance with the ilnvestment plan and would be undertaken after consulta- tion with IDA (Secticn 4.Ol(b) of the draft Credit Agreement). 37. The UNDP-financed sector study includes a component for the training of eight mechanical and electrical engineers, two engineers in system planning and of two graduate accountants in budgeting and control procedures. The pro- ject under consideration includes a program for the training of EdH staff in the use of a new accounting system designed by the consultants and the creation of an EdH center for the continuous training of electricians and mechanics.  - 10 - 38. Despite relatively high tariffs in the past, EdH has been unable to generate adequate financial resources because of high levels of losses and theft (see para. 53 below). The Government and SdH have agreed to implement new tariff structures and levels. With these increased revenues, a reduction of losses in the transmission/distribution facilities and measures to curb theft of electricity, EdH is expected to generate internally a major part of the local funds required for its long-term expansion programs (see paragraphs 54 and 56). DA Strategy 39. The long-term IDA strategy is to (a) assist formulation of a national power development plan; (b) help Haiti develop the power sector by using, to the maximum extent feasible, the country's own energy resources; and (c) assist EdH to become an efficient and financially sound national power company. In the short term and while beginning the long-range program in institution-building and planning, IDA would help finance additional gene- rating capacity and transmission facilities to supply the growing power demand of the metropolitan Port-au-Prince area. PART IV - THE PROJECT 40. The project was identified by an IDA mission to Haiti in August 1974. It was prepared by consultants (SOFRELEC/France) and appraised by IDA in November 1975. Post-appraisal missions visited Haiti in January and February,1976, to discuss project-related issues and to outline implementation procedures. Negotiations for the proposed credit were held in Washington from May 3 to 6, 1976. The Haitian delegation was headed by Mr. Antonio Andre, Minister of Commerce and Industry and Mr. Fernand Laurin, Minister of Public Works and Chairman of the Board of EdH. A report entitled "Appraisal of First Power Project - Haiti" (No.1052a-HA dated May 24, 1976) is being distributed separately. The main features of the credit and project are summarized in Annex III. Project Cbjectives and Description 41. As the above assessment of power sector problems indicates, there. is an urgent need not only to increase the supply of electric power, but also to strengthen secto: management, planning and financial capabilities. To support these objectives, the proposed first IDA power project is designed to: (1) increase the supply of electric power in the Port-au-Prince area; (2) help EdH become an efficient, financially independent national electric company by strengthening management and technical capabilities and by reducing electricity losses;  - 11 - (3) make electricity accessible to a larger number of poor househoLds by applying a new tariff structure; (4) assist formulation of a national power development plan. 42. The project would consist of: (1) A medium-speed diesel engine power plant with a capacity of a' out 21 MW; (2) Related transmission and distribution facilities; (3) Rehabilitation of existing transmission/distribution networks; (4) Improvem,ents to obtain higher security of the transmission line interconnecting the Peligre power station with Port-au-Prince; (5) Construction and equipping of a training center; (6) Technical assistance for project engineering and supervision and for training of EdH personnel. 43. Generation, transmission and distribution: The 21 MW diesel power plant would be composed of two units of about 3 MW each, and two units of 7.5 JAW each. Basic fuel would be fuel oil (Bunker C) with some diesel oil for start-up and stopping. The plant would be built near the industrial park where most of the new assembly industries are locating. The first units are expected to be in service by March 1977 - to complement the reduced output of the Peligre hydro- hydropower plant during the dry season - with all units operating by the end of 1977. The first sectioans of the transmission line which will eventually ring Port-au-Prince would be built under the project. Existing transmission lines would be adapted to carry increased loads. Distribution lines would be extended where required and new substations built at key locations. The security of the transmission system from the Peligre hydropower plant would be increased by better grounding of towers, improvement of control systems and installation of an insulating transformer to protect the hydro generators from faults in the local system. Circuit breakers in the existing diesel plant would also be replaced. 44. Technical AssiLatance: Consultants (SOFREIEC/France) are assisting EdH in engineering, preparation of bid documents and evaluation of bid propo- sals. Their selection and terms of reference are acceptable to the Association. They will inspect fabrication of equipment and supervise installation of equip- ment and construction oi the power plant, substations and transmission/distri- bution lines. The consLltants will also carry out a training program. The cost of these consultant services (about 160 man/months) is about US$5,450 per man/month, which is considered reasonable for this work. 45. Training: Lack of adequately trained staff has led to poor main- tenance of EdH's equipme!nt and distribution system, and a lack of planning and budgeting. To train ne% staff and to upgrade the skills of present EdH person- nel, a comprehensive training program has been agreed upon with EdH and other  - 12 - aid agencies. Under the UNlDP-financed ongoing power sector pre-investment study, engineers will be trained abroad and in Haiti (by the consultants) in diesel and hydropower plant operations and in maintenance of the transmission/ distribution system. Other engineers would be trained in planning and, together with accountants, would be instructed in preparing budgets. Techni- cians will be trained in 1976-77 at Port-au-Prince's new vocational training center sponsored by UNDP/ILO and France. The proposed credit would finance training in EdH's nev accounting system and in budgeting and control procedures. 46. The proposed credit would also finance construction and equipping of a small permanent training center for EdH personnel. Cost of the center, with equipment, is estimated at US$150,000. The training center would be directed by a qualified Haitian responsible to the Technical Manager. Besides upgrading present EdH personnel, the center would give practical training to new EdH recruits who are expected to come mainly from among the graduates of a tech- nical secondary school supported by CIDA. Project Cost and Financing 47. The total cost of the project, net of duties and taxes, is estimated at about US$18 million. (Details of project cost are given in Annex III). Of this anount, the Government would provide US$2 million as an equity contribution to EdH. The proposed credit of US$16 million (89 percent of total project cost) would finance the import component of the project of about US$15 million and US$1 million of local costs. The proposed cost sharing by IDA is recom- mended in the light of EdH's tight financial situation (see paragraph 53) and of the severe constraints on the Government's ability to increase its savings (see paragraph 12). The credit, which would be on standard IDA terms, would be onlent by the Government to EdH at the interest rate of 8.85 percent with a repayment period of 25 years, including a grace period of two years (Section 3.01(b) of the draft Credit Agreement). Interest due the Government by EdH would be capitalized during the construction period. Project Execution 4b. EdH would be responsible for the execution of the project which would be carried out in accordance with procedures outlined in the draft Project Agree- ment between the Association and EdH. A project implementation schedule was agreed upon during negotiations. 49. Procurement: The diesel power plant would be contracted on a furnish- and-install (turn-key) basis. Construction of high-tension (69 and 115 kV) transmission lines and substations would be carried out by qualified contractors. All major contracts for equipment and works would be awarded following interna- tional competitive bidding in accordance with IDA Guidelines for Procurement. Equipment, valued at about US$200,000, needed to complement existing equipment, would be procured from original suppliers; the order for training equipment (costing about US$100,000) is too specialized to warrant general international competitive bidding procedures and would be purchased on the basis of price quotations from at least three suppliers.  - 13 - 50. Disbursements: Withdrawals from the credit account would be made for: (a) 100 percent of foreign expenditures or 90 percent of total expendi- tures (with the exception of purchase of land) for the power station; (b) 100 percent of foreign expenditures or 85 percent of total expenditures for transmission/distribution and other works; and (c) 100 percent of foreign expenditures for other equipment and materials, and for consultant services. The credit would be disbursed over a period of about two years. A schedule of estimated disbursements is given in Annex III. 51. Retroactive Financing: Because of the urgency of having additional generating capacity installed as soon as possible, EdH engaged consultants acceptable to IDA, in Flebruary 1975, for project preparation, engineering and procurement. In order to permit construction to begin in time to avoid major power rationing during the 1977 dry season, international competitive bidding for the generating plant was initiated in consultation with IDA in December 1975. Bids were received on February 13, 1976 and on May 7, 1976, with the concurrence of IDA, EdH issued a letter of intent, valid for 30 days, to the lowest evaluated bidder, a consortium headed by Brown Boveri (Germany). This schedule would permit operation of the first generators by March 1977, the middle of the dry season. Retroactive financing not exceeding US$1.12 million is recommended for expenditures undertaken from February 1, 1975 against payment for consultant services (US$500,000) and downpayments for generating equipment (us$620,000). Environment 52. The location of the proposed diesel power plant in the industrial section of Port-au-Prirnce removes it from existing or planned residential developments. Specifications, acceptable to IDA, on maximum sulfur dioxide emission, noise level and thermal pollution are to be included in the contract documents and are expected to keep to a minimum any detrimental effects to the environment. EdH, with the help of consultants, would route new trans- mission lines so as to minimize unsightly impact or destruction of vegetation. Financial Aspects 53. EdH's financial performance has been unsatisfactory. This is due mainly to three causes. Firstly, the level of losses of electricity (about 32 percent of net generation) is high, both in absolute terms for Haiti's compact system and ..n comparison to other countries at a similar stage of development. The project will reduce losses by improving transmission and distribution facilities. The Government has also passed special legislation declaring theft of electricity - due to illegal connections and meter tampering - a criminal offense and EdH expects to reduce these losses by systematic inspections of connections. Progress in reduction of losses would be monitored against targets established in consultation with the Association (Section 3.02 of the draft Project Agreement). A second cause of poor finan- cial condition was the non-payment of electricity bills by the Government and autonomous agencies. The Government has given assurances that it will under- take all measures necessary to ensure that electricity bills owed EdH are  - 14 - settled and paid in time under arrangements satisfactory to the Association (Section 4.05 of the draft Credit Agreement). Thirdly, debt service on supplier's credits incurred for the construction of the Peligre dam, though shared by the Governnent, was a heavy burden for the new company. Most of EdH1's debts for Peligre will be fully repaid by the end of 1978. For the above reasons, EdH has had to borrow every year from the National Bank (current overdraft is US$3.4 million). Action to reduce electricity losses and to settle overdue receivables as well as adoption of a slightly higher tariff (see below) would improve the financial position of EdH. EdH would not incur long-term debts(12 ,nonths or more) without prior approval of IDA, unless it is able to meet a 1.5 debt service test (Section 4.05(a) of the draft Project Agreement). It would not incur short-term debts (less than 12 months) exceed- ing one-sixth of its annual cash operating expenses without prior approval of IDA (Section 4.05(b) of the draft Project Agreement). 54. Tariffs: The present electricity tariffs were put into effect some thirty years ago by the private power company which served Port-au-Prince until 1971. EdH retained these tariffs with an inequitable structure conducive to wasteful consumption. On the basis of studies undertaken by the consultants who prepared the project and who are also carrying out the UNDP-financed power sector study (paragraph 35), EdH will restructure the tariff schedule to make electricity more accessible to the small consumer. To permit EdH to attain rates of return on its revalued rate base increasing from 5 percent in 1976 to 8 percent by 1961 and thereafter, moderate tariff increases would be needed. New tariffs to come into effect on October 1, 1976 would result in about a 10 percent increase on the average over existing tariff levels. Further tariff adjustments will be made as necessary to achieve the agreed rates of return (Section 4.03 of the draft Credit Agreement and Section 4.03 of the draft Project Agreement). EdH has agreed to revalue its assets annually, using a methodology acceptable to IDA (Section 4.04 of the draft Project Agreement). 55. New accounting procedures are being introduced by EdH, under the supervision of consultants. These procedures are expected to speed up bill- ings and collections, simplify accounting controls and make information required for planning and budgeting more accessible. EdH accounts would be audited annually by independent auditors acceptable to IDA (Section 4.02 of the draft Project Agreement). 56. Financing Plan: Over the 1976-78 construction period of the proposed project, EdH's total capital requirements will be about US$39.6 million. About US$18 million of this amount would be for the proposed project and US$6.7 mil- lion would be the initial disbursement in 1978 for additional diesel units and transmission and distribution works. The remainder of investments for this period would be for system expansions in the provinces (US$10 million) and for working capital increases and interest during construction (US$4.9 million). Twenty-three percent of these investment funds (about US$9.4 million) are expected to be generated by EdH itself, including customer contributions (after payment of debt service), 45 percent from proceeds of the proposed IDA  - 15 - credit and capitalized interest (Us$17.8 million), 8 percent from the Federal Republic of Germany (US$3.1 million), 17 percent from as yet un- determined foreign sources (US$6.5 million) and 7 percent (US$2.8 million) from government contributions. The (overnment contributions would be par- tially offset by EdH's repayoments of overdrafts to the National Bank. Justification of the Project 57. Demand and Generation Forecast: Projections for power demand and generation for Port au.-Prince have been made by the consultants through 1990. These projections take into consideration an expected reduction in electricity losses from the present 32 percent of total net generation to 16 percent by 1982 through enforcement of the new anti-theft legislation and improvement of the distribution systemi. The forecast assumes an average annual increase of generation of 12.5 percent from 1975 through 1982 and 6.8 percent from 1983 through 1990 with corresponding annual growth rates of sales to be 15.3 per- cent and 6.8 percent. The proposed new tariff structures may cause mnajor changes in demand patterns by lowering tariffs for small residential consumers and by raising them for large consumers and, given the small base from which the industrial sector has expanded since 1968, it is particularly difficult to anticipate the level of industrial growth. Though present forecasts indicate a need for additional diesel plant and transmission/distribution facilities to be built in 1978, demand patterns will be closely monitored in order to ascer- tain more precisely the need for future power investments (Section 3.05 of the draft Project Agreement). For the short term it is clear that there is an immediate need for additional generating capacity, as loads totalling 14 MW are already awaiting connection and, even without connecting these loads, there would be power shortages in the 1977 dry season. The new generating plant would become fully operational toward the end of 1977. 58. Least Cost Solution: In a study by the consultants comparing (1) medium-speed diesel engine plants, (2) gas turbine engine plants, and (3) a combination of gas turbine and steam plants, the medium-speed diesel engines were found to be the least cost solution for discount rates of up to 20 percent. The transmission works selected for the proposed project were the least cost solution for discount rates of up to 35 percent. 59. Return on Investment: The economic rate of return of the project would be about 16 perceit. Sensitivity analysis shows that the rate of return would be 14 percent if Lnvestment and operating costs were assumed to rise by 10 percent. The benefits of the project were taken as revenues accruing from sales of additional electricity at recommended tariff levels which would re- flect the marginal cost of electricity supply. This understates the total economic benefits of the project because indirect benefits resulting from the project are not quantified in the benefit stream. To the extent that they are not included in tariffs, these indirect benefits include the social benefits from greater access to electricity for the u-rban poor and greater employment possibilities resulting from increased industrial and agricultural production made possible by the project.  - 16 - Project Risks 60. EdH could encounter difficulties in the execution of the project since it lacks construction experience and has few qualified engineers on its staff. To minimize this risk and to train Haitian staff for execution of future projects, the consultants who prepared the project would also super- vise its execution together with EdH personnel. PART V - LBEAL INSTRUMENTS AND AUTHORITY 61. The draft Development Credit Agreement between the Republic of Haiti and the Association, the draft Project Agreement between the Association and Electricite d'Haiti, the Recommendation of the Committee provided for in Article V, Section l(d), of the Articles of Agreement and the text of a draft resolution approving the proposed credit are being distributed to the Executive Directors separately. 62. The draft Credit Agreement and the draft Project Agreement conform to the normal pattern for credits for power projects. Features of special interest of the draft Development Credit and Project Agreements are referred to in paragraphs 33, 36, 47, 53, 54, 55 and 57. 63. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 64. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Attachments June 3, 1976  ASNZX I Page 1 of 4 pagea TABLE 36 HAITT SOCIAL IKDICATORS DATA SHEET LAND AREA (THOU K2) ........ !............. -- ------------w-- HAITI REFERENCE COUNTRIES (1970) TOTAL 27.8 HOST RECENT AGRIC . 1960 1970 ESTIMATE CAMEROON HONoUaAs IVORY COAST ** GNP PER CAPITA (US5) 90.0 110.0 130.0 210.0 270.0 3Z0.0 POPULATION AND VITAL STATISTICS ___________________.___________ POPULATION (MID-YR. MILLION) 3.6 4.2 4.5 5.8 2.5 5.4 POPULATION DENSITY PER SQUARE KM. 129.0 151.0 162.0 12.0 22.0 16.0 PER SO. KN. AGRICULTURAL LANO .. .. .. .. VITAL STATISTICS CRUOE BIRTH RATE PER THOUSAND 39 9 37.6 CR 42.1 51.5 46.1 CRUDE DEATH RATE PER THOUSAND 21.8 17 8 23.9 19.1 23.3 INFANT MORTALITY RATE (7THLU) 200.0 /a ,. 150.0 LIFE EXPECTANCY AT BIRTH (YrS) 41.9 46.6 47.7 39.7 47.3 39.7 GROSS REPRODUCTION RATE .. 3.0 3.0 2.7 3.4 3.1 POPULATION GROWTH RATE (Z) TOTAL 1.5 1.6 1.8 2.0 2.7 s.4La, URBAN 3.6 3.9 3.5 6.0 7.9 7.5 /a URBAN POPULATION CZ OF TOTAL) 15.0 18.7 19.0 20.0 32.0 28.0 AGE STRUCTURE (PERCENT) 0 tO 14 YEARS 42.0 41.5 42. 5L 43.0 46.7 42.4 1s ro 64 YEARS 54.9 54.0 53. 2 54.0 50.9 54.9 65 YEARS ANO OVER 3.1 A.5 4.3 3.0 2.4 2.7 AGE DEPENOENCY RATIO 0.8 0.9 0.9 0.9 0.0 0.8 ECONOMIC DEPENDENCY RATIO 0.?7 A 0.7 /a .. 1.2 l.5/a a.s FAMILY PLANNING ACCEPTORS (CUHULATIVE. THOU) .. .. .. .. 20.7 USERS (C OF MARRIED WOMEN) .. .. .. .. EMPLOYrENT TOTAL LABOR FORCE (THOUSAND) 2300.0 2800.0 .. 2800.0 800.0 2600.0 LAB3R FORCE IN AGRICULTURE (1) 83.0 80.0 82.0 65.0 78.0 UsEMPLOYED (T OF LABOR FORCE) .. .. .. .. 8.0 9.0 INCOME CISTRIBUTION I OF PRIVATE INCOME REC D 3Y- HIGHEST 5% OF HOUSEHOLDS .. .. .. .. 32.9 A 28.6 / HIGHEST 26B OF HOUSEHOLOS .. . .. .. 65.3 58.b 5 L3WEST 20% OF HOUSEHOLDS .. .. .. .. 1.6 3.9 e LOWEST 40S OF HOUSEHOLOS .. .. .. .. 6.4A7 10.6 j ODSTRIBUTION OF LAND OANERSHIP t OWNED BY TOP IO OF OWNERS .. .. .. .. 57.3 S OWNEO BY SMALLEST 10% OWNERS .. .. .. .. 0.5 HEALTH ANO NUTRITION POPULATION PER PHYSICIAN 10600.0 13210.0 12310.0 25960.0 37O0.OZC L2140.0 POPULATION PER NURSING PERSON 9220.0/c 7460.0 b 2470.0 .. 2480. 0 _d POPULATION PER HOSPITAL RED 1790.0 1370.0 .. 480.0 570.0 680.0 /d PER CAPITA SUPPLY OF - CALORIES (I OF REQUIREMENTS) B1.0 76.0 77.0 96.0 96.0 108.0 PROTEIN (GRAMS PER DAY) 40.0 39.0 39.0 59.0 58.0 60.0 -OF WHICH ANIMAL AND PULSE .. 18.0 23.0/ 2Z.0 18.0 / CEATH RATE A/YHOU) AGES 1-4 27.0 33.0 .. .. 10.0 EDUCAT ION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 38.0 40.0 d 41.0A 108.0 86.0 /d 76.0 SECONOARY SCHOOL 3.0 L 4.0 * 9.o b io.o 7 T 10 L YEARS OF SCHOOLING PROVIDEO (FIRST AND SBCOND LEVEL) 13.0 13.0 03.0 14.0 /k 12.0 13.0 VOCATIONAL ENROLLMENT (1 OF SECONDARY) 21.0 19.0 .. 22.0 08.0 7.0 ADULT LITERACY RATE (1) I0.0 20.0 .. .. 45.0 2 0.0 HOUSING PERSONS PER ROO (AVERAGE) .. .. .. .. OCCUPIEO DWELLINGS WITHOUT PIPED WATER (C) .. .. .. ACCESS TO ELECTRICITY (l OF ALL DWELLINGS) .. . .. RURAL OWELLTNGS CONNECTED TO ELECTRICITY (2) .. .. .. .. CONSUMPTION RADIO RECEIVERS (PER THOU POP) 5.0 17.0 17.0 36.0 57.0 17.0 PASSENGER CARS (PER THOU POP) 2.0 3.0 3.0 6.0 s.0 11.0 ELECTRICITY (KAN/YR PER CAP) 25.0 28.o 32.0 $ 201.0 127. 0 120 0 NECSPRINT (1G/YR PER CAP) 0.1 0. 0. .. 1.0 0. 2 SEE NOTES AND DEFINITIONS ON REVERSE  ANNEX I Page 2 of 4 pages NOTES Unins. otherwise noted, data for 1960 refer no any year hetwern 1959 and 1961, for 1970 berwee 1963 and 1970, end for Moat Iloneo E-icvat betwee 1971 and 1973. * The Ivory Coast has bacoa- leo,tedasn ojn lva ootry for Haieti sis both o ...etries have a similar noltoran baokgr..od aed the Ivory toastL h. as sonooded le chtvle a igh rat of enosevin rowth. HAITI 1960 Ia 1962, lb Ratio of ppaiatnne under 15 and 65 and over to total labor foon In T1llodieg eidwi-e; ld 7-12 and 13-19 Years of .ag ro pertlveiy. 19760 / Ratio of Ppnplatiaa under 15 and 65 and over to total labor form., /b Tonloding nidwva and -nnietan. eees I 1966. Id 7-12 snd 13-18 years of age respenLi_voy. MOST RECENT ESTNIATE' Ia 1974, /b 7-12 yearn nf age. CAMIEROON 1970 I 1964-66, lb 12-18 years of age, In 13 Years for East Caneoo.- HONDURAS 1970 I Ratio of .populatimne nder 15 and 65 and ove to total labor forte, lb 1967-68. In Registerd, sot all prantioieg is rho onuanry, /d 7-12 and 13-19 yearn of age respentiv-ly. WVORE COAST 1970 I 1965-1970, b Ratio of ppolation aeder 15 and 69 and oven to total laborfot In .o- rolipient, Id foooraa,et only, /a 1964_66, If 12-18 yearn of age, /R Dne so Iaeigratioe, the growth rate in higber thas the rate of eatrora R6, may 20, 1976 DEFINITIONS OP SOCIAL INDICATOSI1 Land Arl, (thou _ns) Populatinene eurnigprn Population divided by oscbhr af prooti- Total1 Tona an..n area...-ri land area aned inand waes ol I d _..Ed.teaed female urses, eified" Agi.-Most reoeant siaeof agriouIturalI areaossed tampnrn rily or .orses , and asiliaty personne with trainig orepeisa pormaeetly for oraps, panture-, macbet b kitobee gardese or tIn i Population per hnupital bed -Populatio diided by eniber of hospital fallow. he~~~~~~~~~~~~~~bda avalable in puhIto aed private gene.ral aed uproinli-d houpito1 and rehahilittatin nete trs; ..erIodes -rieg biase asd establiubhmets foP per napt US0$) - GNP per o"pita astioates at ..arbat prices, calou- for ustadial a nd prevetive rare. lated bysae saersin method as World Rash Atlas (1972-74 basis). Pee nait snoy of ra~lonien (% of renuirmea,tul - Couputod brow enrgyt equ.ivl ent of net food pp'lie ava_ilable isncon,try per napita Ponaio n italsei ut per day, aviacaspplies n-pris- domasit pro -nlo, irports Irss ,Popultio (nsd-yr. million) -Au of July firnt if nor avilabla, onports, and ohanges in sutk, nor suppli en ounldo oniol feed, seodu _avrogo of two end-year estinates. qaa..itie- us-d in food pro...oufIg and Ios-es In dintribotion, raqore- vents were .uti-satd by PA0 base d on pbyutlogioal seeds for noesI Pseulation density -per uqoare In- Mid-year pops.iacio per uquore ktlo- notivuty and health considering enviroonen ta1 teoperature, body weights, moter (100 hoas) af notal areas, age aadsen distrlhbtinn of population, and al11uieg 107. for waste Populaion denity -per square o of ageic. 1aed - Computed .10 bav- for at househod 1-vo. agiutr liand only. Par -apit su-pply of protedin (ugao per day) - Protein vonieni of per oapitatnet supply of fod e day, net supply of fond is defined as vital statistics above, requiremets for all c .u.tries established by US0A Enonuit Crude birth rateper thousae - iAua.. IveI births, Per thousa, of mid- R..searoh Servioes provide far a minimum allmce af 60 grass of year pplton oa-er rnithnatft averges adiag in 190( aaul IW0, toial protein per day, and 20 grams of asimal and pulse protein, of andfir-yer aeraa edig is 1975 for meat e'aeat estimate. which 10 grams should be a.nial protein, ihese tanadsae loe Crado death rte pert ..ead - AunoaI deaths per thousand of mid-year rhaa thoue of 75 grans of total proteim aad 23 gram of animal protein population; ten-year aritiseetie aarge eding in 1960 and 1970, and an an average for the world, propou-d by FAO in the Third World Fand five-year avrage endliag in 1975 for most recent eatimats. SurvY. in fantmortality rate (/thofl - Anesa.l deathu of infants snder one Year Propt rfbspl rmaia n us Protein sapply of food of ag perc thoauand live births, derived fran anol and paRses In grams pe day. tIf._; eetaocy at birth fyrs) - Averago sumbor of yearu of litf remain- Deatb ra2te i/thou) noes 1-h - AnnualI deaths per thonsand in age group lag at birth, osual1y five-yea veae ending In 1960, 1970 and 1-4 years, is ohildren in this age graop, suggestedass indiontar oi 1975 for develping n-teries, mInstrition. Crone reprodution rote - Averge number of livedaughters a osa ill bearishr normal.rprodotive per iod if she onporienoon preses r age- Edaoa.tion pefi frti'tity rates, usually fiv-year av.rag-s ending is 1960, Adlsated e-ro-ient ra lah epimar nhool - EnraIlmet of all agesa 1970 ad 1975 for devlping cnoutrie.prntg afriry nhi-e poplation; i-claden ohildren aged Popn1ation growth earn 1) - tatal - Compood anua growth rates of mid- 6-11 years but adjuted far differest lengths of pr-ryoduiotio, year popaILaio for 1950-60, 19601-70, and 1970 to most recen.t year. for eaumtries with movra dunatson, enrollment may ea.ed 1002 Poaaingoth ra te (2-uban - Computed like growth rate of totl. ince some papils are below or above the offiolal sohoolIge population, different defisitions of srba areas mop affent nonpara- Adlunted meroliment ratia - seoandars sohool - Computed as above; biliryofdta amog omaris.seodary edar..tion requires at least foar years of approved primary Erhan. oneplation C% of total) - Ratia of orbam in total population; instruction; provides gemeral, v-ntional ar teah-r training different definitions ni arba areas may affeor o-parbility of data instrsotion for pupils of 12 to 17 years of age; o-r-opond-nre amn ononfrie..nnua.r generally ..moloded. Age structure (portent) -Children (0-14 Years) * worhig-age (15-64 years), YVear of arhoalieg provided (first and aeond levels) - Tetal Years of and retired (65 years and ovr) as peroontagas of mid-year popolation. scheal ig, at se..ondary level, vonationaI ins trantion may he par- Ag eednyratia - Ratio of papelatin under 15 aod 65 and over no tially or npletely elded A dpn..thase of ages 15 throngh 64. Vonationa1 enrollment (of seooadary) - Vocational institutiomo, ic...-I. depend-ny ratio - gRbti of population oder 15 and 65 and over imolade teohnina1, imduutrial or other program which operate to the labor forne in age group of 1'-64 years. independently or as deparononta of ueoondary institutions, Pemily planing - anoeeors (rumlaIoc the') - C-Insltive niashr of Adult literacy rate()- Literate adults (able to read and write) as acceyptors of bit-cotrl evre under a..pioes of national family peroen tRag of total adult .paplation aed iS yers amd over. plamning progron: .i.e iaoeption. Pamily planning- usrs of marred womn) - Percetages of married HassuIng women af ohild-bearsng age (15-44 years) who use birth-rontro1 devires Persona perroom (ave-rae) -Average somber of per...s Per room in to all maried wmen is some age gronp. _nePied covetional dwellings in urban areas; dwelligs emelude E.pl.y-.t ~~~~~~~~~~~~~~~~On-permanent ut-uturen nd smncpied)parts. Pasplaymant Ottupie~~~~~~~d_dwllng wihout pined wter (2) - Orcapied ...avention1 Total labor farce (thousan d) - Emonuically active persons, icnlding dweligs in sRrbts and rural areas without inside or outside piped armed fames and unemployed bot e..Itdladig housewives students, Ott, water facilities as peroentage of all oncpied dwellings. dafisitioma io various countries are not oumparable. Access to lcrct (% of all dwellings) - Conventiona dwellings Labor force in agriculture()- Agricaltural labrfor mie (is farming, with el.eotrigityin1lvng quarters as percent of total dwellings in forestry,(.hoIntg and fishing) as percentage of total la bor force. urbam and rara1 area..iv Unemplaynd (2 of labor Porno) - Unemployed are usualy defined a Rara1 dwellings connecte.d ta ele-trielty()- Computed as babv for porsons who are able and williug to tabe a Job, out of a Jab onarura dwellings only. given day, remained our of a Job, and see king work for a spenified minimn- period not emneeding one week; may not be comparable between conamPtion countrien dua to ldifferent definitions of onepleynd and -onroef0 Radim eevr (-ethu Pa) - All types of r-nivers for radio broad- data, e.g., - emlymet office statistics, sample survys, compulsory css to general puhlio Per thousa,nd of papolation, encldes ouaplo5sant imauranee. onlicesned receivers in tonatries and in years when registration, of radio nets was in effect, darn for recent years may eat be comparable leI-se distribution Percentage of private income (both is cah and siere most ountries abolished licensig. hind) received by riobest 52, rieh-tr 202, panrese 202, and poorest Passenger c.ar(prb pp)- Pseger oars comprise sorer oars 402 o huoehoRds- seating less than eight persons; encludes anbulan-es hearses and military vehcles. Diotributios of land owse-hip - Peroentages of land ownd by wealthiest Ele-trnloty (hwhyr per cap) - Annual consumption, of induatria1, con- 102 and poorest 102. of land ownrs nercie1, public and private electnioty in hilewatt hours per oopita; gene rally based onprdtion data, without alwnefar Il.s.es in Health and Nutrition g~~~~~~~~rids but a1llawing for iports and emparta of electricity. Popu:latio per physician - Population divided.by nunber of pranticing Newsprint (hg/yr per cap) - Per eapita annual --suPtion in kilograms phyaioian qualified from a mdioalchoo at aniv-rsiry level, . etimated from domestic Production Plus net imPmrts of newprist.  ANNEX I Page 3 of 4 pages ECONOMIC INDICATORS V1 GROSS NATIONAL PRODUCT IN 1975 b' ANNUAL RATE OF GROWTH (%, constant prices) US$ Mln. % 1960 -67 1967 -72 1972-1975 ff GNP at Market Prices 921.1 100.0 0.1 3.0 2.4 Gross Domestic Investment 98.0 10.6 -3.0 18.5 12.5 Gross National Saving 46.6 5.1 -26.0 46.o -43.0 Current Account Balance -16.4 1.8 Exports of Goods, NFS 106.0 11.5 -4.7 9.3 -8.6 Imports of Goods, NFS 155.7 16.9 2.9 6.8 8.8 OUTPUT, LABOR FORCE AND PEODUCTIVITY IN 1975 g Value Added Labor Force V. A. Per Worker Cln. % ~~~~~~~Mln. % U f Agriculture 389.3 42.2 Industry 169.7 18.4 Services 365.'; 39.4 Unallocated . . GDP Total/Average Q .22 100.0 .. 100.0 GOVERNMEN FINANCE Glener al Government VCentral Oovernment Mlni.)O GOP ( Mln.) %o GDP 1N975, 1975 19 74175 1977 197 197 -4 19 Current Receipts 555y. 12.0 11.7 475.4 10. 3 9.8 Current Expenditure 526.2 11.4 11.2 4t.6.2 9.7 9.3 Current Surplus 22r---O-.-6 --Ts ce7ae2 o d u6 Capital Expenditures % 220.1 4.8 4.1 220.1 14.8 4 External Assistance (net)y 158.0 3.4 2.4 158.0 j 3.4 I' 2.14 MONEY, CREDIT and PRICES 1969 1970 1971 19372 1973 1974 1975 (Ellion G. outstanding end periodf- Money and Quaai Money 178.6 193.4 246.4 311.3 391.5 467.7 478.5 Bank credit to Public Sector 193.1 189.2 202.5 215.3 214.7 331.6 415.4 Bank Credit to Private Sector 59.4 65.3 78.5 92.1 170.6 310.6 451.3 (Percentages or Index Numsbers) MoneY and Quasi Money as % of GDP 8.2 8.4 9.1 10.5 12.5 12.8 10.4 General Price Index (1963 100) 119.0 123.2 128.9 135.6 162.7 186.9 219.6 Annual percentage changes in General Price index 4.9 3.5 4.6 5.2 20.0 nt.9 17.5 Bank credit to Public Sector 13.6 -2.1 7.0 5.4 13.7 35.5 25.3 Bank credit to Private Sector 5.7 9.9 20.2 19.6 85.2 82.0 45.3 NOTEt All conversions to dollars in this table are at the average exchange rate prevailing dturing the period covered. /Dat-a refer to fiscal years ending September 30 JIncludes current expenditures associated with development projects ~/Net loans and grants IVGeneral Government t Preliminary y Estimate not available not applicable  ANNEX I Page 4 of 4pages TRADE PAYMENTS AND CAPITAL FWWS 2 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1973-75) 1973 1974 1975 US $ Mln % (Millions US $) Coffee 21.0 31.0 Exports of Goods, NFS 71.7 93.0 106.0 Sugar 4.5 6.6 Imports of Goods, NFS 95.7 134-9 155.7 Essential Oils 5.4 8.o Resource Gap (deficit = -) -24.0 -41.9 Beef 1 2 Interest Payments (net) -o.6 -o.6 -0.5 Bauxite 7.9 11.8 Handicrafts 17.5 25.9 Other Factor Payments (net) -3.8 -5.3 -6.3 Net Transfers 19.1 26.9 40.1 All other commodities 7.0 10.2 Balance on Current Account -9,3 -20.9 -16X4 Total 67.7 100.0 Direct Foreign Investment 7.0 7.9 2.6 EXTERNAL DEBT, DECEMBER 31, 1975 Net MLT Borrowing Disbursements 3.2 8.4 24.8 US $ Mln Amortization -6.0 .8 -6.2 Subtotal -28 3. - 6 Public Debt, incl. guaranteed 81.0 Non-Guaranteed Private Debt Total outstanding & Disbursed 81.0 Other items n.e.i 3. -10.1 -28.3 Increase in Reserves (+) -1.5 -19.5 -23.5 DEBT SERVICE RATIO for 1975 2 Gross Reservesr 20.7 14.7 12.8 Net Reserves / 18.9 -o.6 -24.1 Public Debt. incl. guaranteed 6.3 Non-Guaranteed Private Debt Fuel and Related Materials Total outstanding & Disbursed Imports 4.3 12.4 11.2 Exports - - IBRD/IDA LENDING, March 31. 1976 (Million US $) IBRDl IDA RATE OF EXCHANGE _ Outstanding & Disbursed - 12.8 Undisbursed - 17.6 G 1.00 US $ 0.20 Outstanding incl. Undisbursed - 30.4 / Data refer to fiscal years ending September 30 / Ratio of Debt Service to Exports of Goods and Non-Factor Services / September 30 , , not available not applicable Country Programs I Latin America and the Caribbean Regional Office May 13, 1976  A.NEX II Page 1 of 2 THE STATUS OF BANK BROUP OPERATIONS IN HAITI A. STATEMENT OF BANK LCANS AND IDA CREDITS (as of April 30, 1976) Loan or US$ million Credit Amount (less cancellations) Number Year Borrower Purpose Bank IDA Undisbursed One loan (1956) and one credit (1962), both fully disbursed. 2.6 0.35 - h78-HA 1974 Rep.of Haiti Highway 10.00 2.9 556-HA 1975 Rep.of Haiti Highway 20.00 13.4 618-HA 1976 Rep.of Haiti Education 5.50 5.5 Total 2.6 35.85 of which has been repaid 2.6 .01 Total now outstanding Nil 35.84 Amount sold 0.4 of which has been repaid o.4 Total now held by Bank and IDA - 35.84 / Total undisbursed 21.8 B. STATEMENT OF IFC INVESTMENTS (as of April 30, 1976) No IFC investments have been made in Haiti. C. PROJECTS IN EXECUTION _ CREDIT 478: THIRLD HIGHWAY PROJECT; US$10 MILLION CREDIT OF JUNE 6. 1974; EFFECTIVE DATE: SEPTEMBER 9. 1 97l- CLOSING DATE: DECEMBER 31,197 Construction of the Third Highway Project, as amended by the Executive Directors on October 29, 1974, is about three-fourths completed. The Estere bridge 1/ Prior to exchange adjustments. 2/ These notes are designed to inform the Executive Directors regarding the progress of projects/investments in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced eveluation of strengths and weaknesses in project execution.  ANNEX II Page 2 of 2 reconstruction, begun prior to credit signing, was completed in December 1974. Earth works envisaged under the project are substantially completed and paving has begun. Disbursements are ahead of estimates at the time of appraisal. Consultants have begun training of local civil works contractors. CREDIT 556: FDURTH HIGHWAY PROJECT: US$20 MILLION CREDIT OF JUNE 11, 1975; EFFECTIVE DATE: OCTOBER 8, 1975; CLDSING DATE: DECEMBER 31, 1978 Contracts for 90 percent of the works under the Fourth Highway project have been let and execution, which is on schedule, is about one-third completed. CREDIT 618: FIRST EDUCATION PROJECT: US$5.5 MILLION CREDIT OF FEBRUARY 27, 1976; EFFECTIVE DATE: MAY 20, 1976; CLOSING DATE: JUNE 30, 1980 Project Unit established; one-third of school sites selected.  ANNEX III Page 1 of 2 HAITI: FIRST POWER PROJECT CREDIT AND PROJECT SUMMARY Borrower: The Republic of Haiti Amount: US$16.0 million equivalent Terms: Standard IDA terms Relending Terms: The Government would relend the proceeds of the IDA credit to EdH for a period of 25 years, including 2 years of grace, at the interest rate of 8.85 percent. Project Description: Construction and equipping of a medium-speed diesel engine power station with a capacity of about 21 MW, a training center, and transmission and distribution works of: (i) 21 km single-circuit 69 kV transmission line; (ii) 5.4 km of double circuit 115 kV transmission line; (iii) extension of an existing 115 kV substation and construction of new 115/69/12.47 kV and 69/4.16 kV substations; (iv) extension and rehabilitation of existing transmission and distribution netwrorks; and (v) improvements to the security of the exist- ing transmission system between the Peligre hydropower station and Port-au-Prince. Technical assistance for engi- neering and supervision and for training of EdH personnel. Estimated Cost: The estimated total cost of the project is US$18.0 million equivalent, with a foreign exchange component of about US$1.5.0 million US$ (thousands) Percent of Local Foreign Total Total Power Station 1,830 8,382 10,212 57 Transmission/distribution 770 3,897 4,667 26 and other works Engineering and supervision - 930 930 5 Training - 43 43 - Base Cost Estimate 2,600 13,252 15,852 88 Contingencies (i) Physical 1/ 223 1,157 1,380 8 (ii) Price 2/ 118 682 800 4 2,9941 15,O9l 18032 100 8% on power station; 10% on the rest of project components. 2/ None on power station (firm price contract); 9% in 1976, 8% in 1977-78 on the rest of project components.  ANNEX III Page 2 of 2 Financing Plan: IDA - US$16.0 million equivalent Government - US$2.0 million equivalent Estimated IDA Fiscal Year (US$ Millions) Disbursements: 1976-77 1977-78 1978-79 Annual 10.3 4.6 1,1 Cumulative 10.3 14.9 16.0 Procurement: Contracts for most of the equipment and for con- struction of the diesel power plant, substations and transmission lines would be awarded following international competitive bidding in accordance with Bank/IDA Guidelines for Procurement. Equipment, valued at about US$200,000, needed to complement existing equipment, would be procured from original suppliers; training equipment, costing about US$100,000 would be purchased on the basis of price quotations from at least three suppliers. Retroactive Financing: Retroactive financing not exceeding US$1.12 million is recommended for expenditures made from February 1, 1975 against payment for consultant services and downpayment for generating equipment. Technical Assistance: Consultants (SOFRELEC/France) have been hired for engineering and supervision and for training of EdH personnel. The cost of these consultant services (about 160 man/months) is about US$5,450 per man/month. Rate of Return: 16 percent. Appraisal Report: Report No. 1052a-HA dated May 24, 1976.  _IBRD- 12154 USAB odj DUVA-05ER VILLE MAY 1976 oJ OCcE.v 1 18kAN o . z . / I & & 12X4 M~~~~~~VA 6CROIX DES MISSIONS A I