USAID Sector Reform and Utility Commercialization: Haiti Caracol Power Utility - Leading Practices and Language in PPP Concessions and Applicability to Caracol Power Utility
Summary — This report describes important considerations for developing a Public Private Partnership (PPP) concession contract for the Caracol Power Utility (CPU) in Haiti. It outlines main provisions and clauses included in such contracts based on global leading practices, referencing successfully executed power sector concession contracts.
Key Findings
- The Government of Haiti (GOH) has identified a 30-year concession as the favored public-private partnership model for the CPU.
- The private partner will bear the financial and operational risk of running the CPU in exchange for full rights to any resulting profits.
- Risks are allocated between the public authorities and concessionaires based upon the generally accepted axiom that the risks identified in PPP Projects should be allocated to the party which is the most able to assess, control and manage such risks.
- The concessionaire will be protected from future changes in law or regulation that may likely adversely affect its return on investment.
Full Description
The report aims to describe important considerations for developing a Public Private Partnership (PPP) concession contract for the Caracol Power Utility (CPU). It describes the main provisions and clauses included in such contracts in accordance with global leading practices and relates such examples to the CPU Project. The report references four successfully executed and publicly available global power sector concession contracts. The U.S. Agency for International Development (USAID) designed the Sector Reform and Utility Commercialization (SRUC) Program to support utility commercialization by enhancing the financial viability and long-term sustainability of electrical utilities. SRUC has offered transaction support assistance to the Government of Haiti (GOH) as they work to locate and form a public private partnership (PPP) for the CPU in Northern Haiti.