October 07, 2010

Article at Reuters

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FACTBOX-Private investment is key to Haiti reconstruction

For main investment story, click on [ID:nN07294093].

PORT-AU-PRINCE, Oct 7 (Reuters) - Haiti’s government and its international aid partners are appealing for private capital, both domestic and foreign, to contribute to the reconstruction of the Caribbean country following the crippling Jan. 12 earthquake.

They say only private investment, complementing a huge but sometimes chaotic and cumbersome international relief effort, can relaunch the shattered, aid-dependent economy and create jobs to put Haiti on a path of sustainable development.

The following are some of the private investments underway or announced since the quake:

Development experts say rebuilding and modernizing Haiti’s infrastructure is key to underpin future growth.

Government officials say they are hoping the wrecked capital Port-au-Prince and other parts of the country will become “a huge construction field” in coming years.

Removal of rubble from the quake -- a task estimated to cost $1.2 billion -- is seen as essential for recovery and a major debris-clearing contract has been awarded to HRG, which brings together U.S.-based AshBritt Inc. and Haiti’s GB Group.

Companies from Italy and Spain are building new roads, according to Haitian Finance Minister Ronald Baudin, and there are projects for new seaports and airports, including an airport at the country’s second city of Cap-Haitien being built by Venezuela.

Haiti’s garment export industry, a focus of past investment and viewed as a key generator of jobs, is seen as having competitive advantages due to moves by the United States following the quake to expand duty-free access to the U.S. clothing market. In May, the U.S. Congress approved the bipartisan Haiti Economic Lift Program (HELP).

In an initiative aimed at creating more than 10,000 new jobs, a leading South Korean textile manufacturer, Sae-A Trading Company Limited, announced last month a project with Haiti’s government, the World Bank’s IFC financing arm, and the U.S. State Department to develop an industrial park and garment making operation in Haiti.

The project, to be located either just north of the Haitian capital Port-au-Prince, or on the northern coast, will include development of ports and roads at an estimated cost of between $10 million and $25 million, depending on the infrastructure.

Other South Korean garment makers and manufacturers from Brazil are also reported to be studying investments.

In addition, the IFC (International Finance Corporation) says it has this year financed the expansion of the garment operation on Haiti’s northern border of a Dominican Republic manufacturer, Grupo M. This will create 4,000 new jobs by the end of 2011, capitalizing on the expanded U.S. market access.

The clothing sector accounted for 75 percent of Haiti’s export earnings and employed more than 25,000 people before the Jan. 12 earthquake.

The IFC is working with the Haitian government on the location and development of special economic zones that would attract and concentrate manufacturing operations and foreign investment under a special regulatory regime. A short list of nine possible sites across the country has been drawn up.

This sector, which was already one of the most active before the quake, has since the disaster seen the largest foreign direct investment, $100 million by Vietnamese military-run company Viettel, according to the IFC.

In an operation supported by the IFC, Viettel acquired the majority of shares in Haiti’s national telecoms company Teleco, and will be building the country’s first fiber optic cable network and expanding telecommunications services.

Previously since 2006, the IFC had provided two loans of $15 million to help establish and expand the Irish-owned mobile telephone operator Digicel, the biggest foreign investor in Haiti.

Some of Port-au-Prince’s top hotels were destroyed or damaged in the quake, and to cater for an expected influx of business and aid travelers assisting in post-quake reconstruction, new hotel initiatives are underway.

One announced last month is a $33 million project to construct a 240-room business hotel near the international airport. This brings together an Argentine energy and agribusiness entrepreneur, Rolando Gonzalez-Bunster, and the Haiti-based WIN Group, run by the Mevs family that operates the country’s biggest private cargo shipping terminal and industrial park in Haiti.

Another new business hotel, the Oasis, is being developed by Haitian investors, with the IFC providing $7.5 million.

U.S.-based NEF & JM Associates and Adache Group Architects are helping another Haitian hotel, the Villa St. Louis, to rebuild after its destruction in the Jan. 12 quake.

Royal Caribbean Cruises Ltd. RCL.N has continued to operate its Labadee private beach resort on Haiti's north coast which was undamaged by the quake.

E-Power, a $56.7 million, 60 percent Haitian, 40 percent South Korean investment in electricity generation using heavy fuel is expected to start producing in January. It will contribute a much-needed 30 Megawatts for the struggling state power grid. The project is being financed by the IFC, a Netherlands bank and a local Haitian bank.

The international aid effort in Haiti is focusing on plans to revitalize Haiti’s farming sector and private investors are looking at projects in coffee, sugar and mangoes.