By: Drew Lebowitz, Operations Director, Sigora Haiti
The road that winds down to Môle-Saint-Nicolas is a deserted track, littered with cactus, scrub brush and rocks. Amidst one of Haiti’s most sparsely populated provinces, its dramatic and secluded bay is set on the tip of the Northwest peninsula, only fifty miles from Cuba. But this sleepy fishing town is unique: Môle (pronounced “MOL”) is one of the very few places in Haiti that enjoys 24/7 electricity. An evening stroll around town shows the difference – every tin shack, store and hotel in town radiates light. Teenagers check Facebook and YouTube on their phones beneath streetlights, as merchants laugh and sip cold sodas. The changes are fundamental – yet just one year ago, this 5,000-person community, like most everywhere in rural Haiti, was shrouded in darkness.
Môle’s transformation and ongoing evolution is the result of a concerted effort of a startup working together with a community to solve a fundamental problem on a limited budget. The brainchild of Andy Bogdan Bindea, Sigora Haiti applies smart-grid technology to the developing world to create a long-term, sustainable solution to the problem of energy access. In a country where 72% of people live off-grid, Sigora’s work has become a template for a scalable private-sector solution to power up the roughly 1.1 billion people in the world still living without access to modern electricity.
In November 2015, Sigora signed an agreement with the Municipality of Môle-St.-Nicolas to provide power to the village for 50 years. This local arrangement is allowed under a provision of Haitian law in areas that are outside of the service area of EDH, the national utility. As the exclusive grid operator, Sigora moved into a market with zero energy infrastructure. We faced the challenge of building a grid from scratch (generation, transmission, and distribution) and operating a full-fledged utility company in a town with no trained electricians.
As an added challenge Sigora serves a widely varied market base: Môle is mostly smaller residential consumers who draw only 200W of power, but there are also several larger customers with peak loads exceeding 45kW. The project serves 5 schools, 3 health clinics, 3 hotels and an orphanage. A wide variety of businesses have hooked up to find cheaper power, and many new businesses have started up to use the energy – from movie theaters to beauty salons to water treatment plants. Under the agreement with the community, the government health center receives free power, allowing them to offer 24-hour service and to keep critical vaccines cold. The task before our grid was to provide all of these users with energy while maintaining profitability.
High-Tech Meets Low-Cost
We realized early on that the answer lay in identifying and deploying appropriate technology. Many parts of the grid are traditional: The wooden posts, medium voltage lines, and transformers are the same infrastructure used across the industrialized world for the past 100 years. But throughout we have also incorporated cutting-edge smart-grid technology. Sigora’s proprietary smart meters provide a culturally appropriate way to sell small amounts of prepaid power across vastly different pricing tiers. The meters’ demand control system rations power among critical clients, and proprietary anti-theft technology all but eliminates non-technical losses – a feat in Haiti, where over half of EDH’s connections are made illegally. Billing is based on volt-amp-hours to encourage the use of efficient appliances, and financing is available to help the smaller customers make an affordable down payment and pay off their connection over several years.
Best of all, when complete, Sigora’s grid will draw nearly all its energy from renewable sources; Môle-St.-Nicolas boasts some of the best wind in Haiti. Sigora’s current grid can provide a peak maximum of 100kW and is selling roughly 22MWh per month, but is being expanded with a 219kW PV plant currently under construction.
One of the most fundamental aspects of Sigora’s operation, however, is decidedly low-tech – the company is a community-based endeavor. After we arrived in Môle, we quickly realized that the remote area and lack of skills would make it prohibitively expensive to bring in large-scale contractors. Môle lies four hours from the nearest major city, and eight hours from the capital, Port-au-Prince. Instead of bringing in specialists and other expensive labor, Sigora trained the local team in-house – currently 95% of Sigora’s 36 employees are Haitian. Technicians and linemen who had never used a power tool are running the hydraulics on a bucket truck or soldering together a burnt-out meter or configuring a Wi-Fi access point. After a blow from Hurricane Matthew in October 2016, the local staff got the grid back up in less than 72 hours. Sigora is currently incorporating a company-wide training program which uses both classroom knowledge and an apprenticeship program to teach new skills and encourage skills transfer across the organization.
The conventional wisdom is that low-wage Haitian labor can bring down the costs of low-skill production – think textile mills or banana farms. Our experience has shown that with the right mix of training, incentives, and patience, local labor can not only be productive, but profitable. To this end, we have also been very deliberate in creating a company culture that empowers team members at every level. The Môle office is open 24 hours a day, and it is not uncommon to have technicians choosing to go on service calls at 1 a.m. to replace meters and rewire houses. Likewise, all foreign employees have learned to speak Haitian Creole, fostering good communication across the company. Today, Sigora is the biggest employer in Môle, bringing jobs, skills, and income into the economy along with power.
Making the Numbers Add Up
By far the biggest challenge we have faced has been financial. While everyone loves having power, the fundamental math of wiring up low-consumption clients in poor areas is a balancing act. Sigora’s solution has been to marry low-cost technology with a value proposition based on clients’ current costs of energy.
The current offerings in the energy sector are dirty, inefficient, and expensive. GDP per capita sits around USD$820/year, yet energy costs are sky-high: roughly $10/kWh for lighting with kerosene lamps and candles. Cell phones (and increasingly, smartphones), ubiquitous in Haiti as in most developing countries, need daily charging, which is often sold for 10 Haitian Gourdes per charge – equivalent to roughly $20-50 USD/kWh, depending on the type of phone.
One of Sigora’s primary goals is to bring down the cost of energy while maintaining a solid return for investors. Môle has shown us there is a minimum grid size and a minimum density that will make privately built grids profitable. Sigora currently has a service area of 200,000 people across 3 municipalities, and we look forward to further reducing the cost of energy as we continue to expand the grid.
Balancing Cost and Needs
To make the economics of the project work, Sigora sought practical alternatives without sacrificing safety or quality. When drop wire was not available small enough to accommodate our 15A service, we had a custom order made in the Dominican Republic. We routinely purchase bucket trucks which are taken out of service from American utilities, providing reliable equipment at a fraction of the price. Currently we are planning a set-up to manufacture our own concrete utility poles locally, which would lower the cost of our transmission significantly.
The meter itself is properly sized to the application: Where most American households have 200A service at 120/240V, our standard residential meter provides 15A at 120V (1800W). For larger customers, we offer a range of larger meters to suit their needs – currently the biggest is served by a 50kVA transformer which can provide up to 200A at 240V.
On the business side, Sigora International, parent company to Sigora Haiti, has progressed from initial 2014 angel investments to closing a bridge round of $2.5m in December 2016. We are moving toward closing a $10m Series A round in Q2 of 2017 and are currently scouting new countries to deploy the technology in other appropriate markets.
The Light to Come
One thing our company has not had to do is marketing – the benefits to safety, business, and quality of life sell themselves. As the neighboring communities hear of the developments in tiny Môle, they have bombarded the Sigora staff with calls, letters, and visits to encourage them to expand the project. Or as it is often put in Kreyol: “moun yo swaf kouran!” – the people are thirsty for power!
What began on December 26, 2015, with a single light bulb is quickly gathering speed to light up an entire province of a mostly dark country by the end of 2017. Once the next 27,000 customers have been reached, we will begin starting additional clusters in other corners of Haiti to repeat the model of a private, community-based, high-tech, low-cost grid.
Sigora’s long-term goal is to electrify 2.5 million Haitians by 2025. It is an ambitious project, but our momentum has grown to the point that the vision is looking less like a dream, and more like the future of energy in a warming world. The innovation that electrifies the next 1.1 billion will take many forms – but in this part of Haiti, we have found a solution that works.