HAITI PLEASED WITH PETROCARIBE AND SUMMIT

C O N F I D E N T I A L SECTION 01 OF 02 PORT AU PRINCE 000591 SIPDIS STATE FOR WHA/CAR WHA/EPSC FOR FAITH CORNEILLE, ED MARTINEZ EB/IFD STATE PASS TO USAID FOR LAC/CAR TREASURY FOR JEFFEREY LEVINE COMMERCE FOR SCOTT SMITH E.O. 12958: DECL: 06/18/2019 TAGS: PGOV PREL ENRG EPET ECON POL EAID HA SUBJECT: HAITI PLEASED WITH PETROCARIBE AND SUMMIT REF: A. PORT AU PRINCE 00583 ¶B. 08 PORT AU PRINCE 01023 PORT AU PR 00000591 001.2 OF 002 Classified By: Charge d'Affaires Thomas C. Tighe for reasons 1.4 (a, d) ¶1. (SBU) Summary: The Sixth PetroCaribe Summit in St. Kitts on June 12 congratulated Haiti as the ''best payer'' out of 13 countries, having paid approximately USD 220 million to Venezuela. GOH sources confirm that Venezuela announced plans to finance and construct an oil refinery in Haiti projected to process 20,000 barrels per day. GOH officials say Haiti's parliament will soon ratify a tripartite agreement with Venezuela and Cuba that will decide on Haiti's use of a portion of its PetroCaribe revenues for social programs. Haiti's General Director of Monetization in the Ministry of Economy and Finance (the office responsible for Haiti,s PetroCaribe Fund) lauds the agreement and believes it should not be politicized. End summary. ¶2. (U) Minister of Foreign Affairs Alrich Nicholas stood in for President Preval at the Heads of State meeting at the 6th PetroCaribe Summit in St. Kitts on June 12 (Note: Per Ref. A, President Preval decided to remain in Haiti to continue minimum salary negotiations with Parliament and the private sector. End note) Minister of Finance Daniel Dorsainvil attended the Energy Ministers meeting at the summit on June ¶11. Director General of the Office of Monetization Michael Lecorps also attended the summit. ¶3. (SBU) General Director Lecorps told Econ/PolOff June 16 that the summit congratulated Haiti as the ''best payer'' out of 13 countries benefiting from the petroleum preference agreement. With the cost of a barrel of oil now below USD 80, Haiti currently pays 60 percent of its oil debt to Venezuela within 90 days of a shipment, and pays the remaining 40 percent under a long-term financing agreement at one percent interest. Haiti, to date, has paid approximately USD 220 million of its debt this year to Venezuela. As of April 30, Haiti's PetroCaribe account (after Haiti's withdrawal of USD 197 million for its emergency response to the 2008 hurricanes),had a balance of USD 58.5 million. On May 27, the Government of Haiti (GOH) announced that its total fuel imports under PetroCaribe, since the first shipment was received in March 2008, amounts to approximately USD 489 million. Haiti's long-term debt, payable over 17 to 25 years, amounts to approximately USD 240 million. ¶4. (SBU) Lecorps confirmed to Econ/PolOff June 15 press reports that Venezuela pledged again to construct an oil refinery in Haiti. (Note: Ref. B reported that Venezuela announced this project at the July 2008 PetroCaraibe Summit in Caracas. End note). Lecorps put its capacity at 20,000 bpd and the cost at USD 400 million. He added that the GoH's Office of Mines and Energy, within the Ministry of Public Works, needs to be more cooperative and help Venezuela identify three potential locations for the refinery. ¶5. (SBU) Lecorps stated that Haiti is not a member of Venezuela's Bolivarian Alternative of the Americas platform (ALBA). He did note, however, that a tripartite (Haiti-Venezuela-Cuba) energy cooperation agreement is waiting to be ratified by Parliament. According to Lecorps, the agreement's purpose is to decide how ten percent of funds from Haiti's PetroCaribe revenue would be spent on social programs in Haiti. Lecorps stated that PetroCaribe ''...is very good for the country.'' He noted that Venezuelan-financed electricity generating plants are operating in Port-au-Prince, Gonaives and Cap Haitien and have led to longer hours of power in those areas. Haiti receives shipments of PetroCaribe fuel every two weeks. The next is expected on June 25-26. Lecorps asserted that Haiti is satisfied with the PetroCaribe agreement and that it should not be ''politicized.'' ¶6. (C) Comment: PetroCaribe's generous financing terms make it a deal the GOH cannot refuse. The GOH continues discretely to express satisfaction with this program. PORT AU PR 00000591 002.2 OF 002 However, the yet-to-be-ratified tripartite agreement would give Venezuela (and Cuba) a say over Haiti's use of a part of its PetroCaribe funds. Last October, this arrangement would have tied the GOH's hands in disaster response by requiring agreement from Havana and Caracas on Haiti use of PetroCaribe funds, which the GOH used for hurricane relief under state of emergency legislation (Refs B and C). In addition to three power plants already in operation and promises to modernize the airport in Cap Haitien, Venezuela's oil refinery project -- implementation of which we still see as questionable -- would expand Venezuelan and Cuban influence in Haiti. Post will continue to monitor and report on developments. End comment. TIGHE =======================CABLE ENDS============================