Before privatization efforts that began in the mid-1990s, the government of Haiti fully owned and operated State-Owned Enterprises (SOE). The Haitian commercial code governs the operations of the SOEs. The sector included a flourmill, a cement factory, a telephone company (TELECO), the electricity company (EDH), the national port authority, the airport authority, and two commercial banks: Banque Nationale de Credit and Banque Populaire Haitienne. The law defines SOEs as autonomous enterprises that are legally authorized to be involved in commercial, financial and industrial activities. All SOEs operate under the supervision of a sectorial ministry, and are expected to create economic and social return. Today, some SOEs are fully owned by the state, while others are jointly owned commercial enterprises. The Haitian parliament has full authority to liquidate state enterprises that are underperforming.
Today, the non-financial SOEs that remain in the public portfolio includes the electricity company (EDH), the national airport authority, a sugar factory, the port authority, the social security office, the postal office, and the vehicle insurance company. The majority of SOEs are financially sound, with the exception of EDH. EDH receives substantial annual subsidies from the government of Haiti to stay in business.
In response to the economic difficulties of the late 1990s and mismanagement of the SOEs, the government liberalized the market to allow foreign firms to invest in the management and/or ownership of Haitian state-owned enterprises. To accompany the initiative, the government established the Commission for the Modernization of Public Enterprises in 1996 to facilitate the privatization process, while creating strategies to privatize all SOEs.
In 1998, two U.S. companies, Seaboard and Continental Grain, purchased shares of the state-owned flourmill. Each partner currently owns a third of the company, known today as Les Moulins d’Haiti. In 1999, a consortium of Colombian, Swiss, and Haitian investors purchased a majority stake in the national cement factory. In 2010, a Vietnamese corporation, Viettel, officially acquired 60 percent of the state telecommunications company Teleco (now operating as Natcom), with the government of Haiti retaining 40 percent ownership. Competition is not distorted in favor of state-owned enterprises to the detriment of private companies.
The government has allowed limited private sector investment in selected seaports. The government provided fiscal incentives to the GB Group to build Haiti’s first Panamax container port. This project received its first ship in late 2015.
The government of Haiti has allowed private sector investment in electricity generation to compensate for EDH’s inability to supply sufficient power. Three private power producers generate electricity for EDH. The most recent entry, E-Power, opened a 32 megawatt, USD 56 million, IFC-financed heavy fuel-oil powered generation plant in Port-au-Prince in 2011. The National Regulatory Authority of the Energy Sector in Haiti (ANARSE), a state body created by decree in February 2016, concluded prequalification rounds for regional and mini electricity grids and power production, in October 2018 and March 2019 respectively. ANARSE is expected to start issuing tenders in 2019 for concessions for public private partnership for these regional and mini grids.