Financing Sustainable Energy through Remittance Flows in Haiti and the Dominican Republic
Title: Financing Sustainable Energy through Remittance Flows in Haiti and the Dominican Republic
Brief description: “F INANCING SUSTAINABLE ENERGYTHROUGH REMITTANCE FLOWSIN HAITI AND THE DOMINICAN REPUBLIC”F INAL REPORT1 Introduction1.1 Report Objectives and Research RationaleThe goal of this market research was to determine the feasibility of promoting the use ofremittances as a means to purchase clean energy. The project was designed to test theattractiveness to immigrants in more developed countries (the United States) of linkingtheir remittance flows to the purchase of clean energy technologies in the developingworld (Haiti and the Dominican Republic). The research was geared at assessing howmuch interest there was among remitters in targeting their remittances at improving thequality of life of their families in their country of origin through linking a portion of theirremittances to clean energy purchases, and to test the interest of the receivers in this typeof an arrangement. A key goal was to evaluate the desire of immigrants to control the useof the remittances that they send to their home countries.Two countries were selected for research, Haiti and the Dominican Republic. Thesecountries were interesting to compare because they both receive a relatively high numberof remittances in relation to population size and they receive the bulk of their remittancesfrom the United States and specifically the New York area. However, one of the countrieshas much lower electrification rates and much lower levels of political stability than theother. The research team anticipated that this would result in quite different levels ofinterest in the subject matter of the research.Haiti has the lowest coverage of electricity in the Western Hemisphere, with only about12.5% of its 8.9 million population (or 1.1 million people) having reliable access1. It isestimated that over 1 million Haitians live in the US with about 420,000 living in NewYork (these figures include undocumented workers)2. In 2008, Haiti received aboutUS$1.8 billion in remittances (which makes up about 20% of GDP). Haiti has sufferedsignificant political and economic unrest for many years.The total population of the Dominican Republic is about 9.5 million, with about 3 millionpeople (or about 40% of the population) living in rural areas that do not have reliablesources of electricity3. About 1.2 million Dominicans live in the US with the largest1  CIA- World fact book. https://www.cia.gov/library/publications/the-world-factbook/geos/ha.html2  Migration Information Source. http://www.migrationinformation.org/Usfocus/display.cfm?ID=2143  CIA- World fact book. https://www.cia.gov/library/publications/the-world-factbook/geos/ha.html©Arc Finance, Ltd.  4concentration of Dominican immigrants in New York and New Jersey4. The DominicanRepublic received approximately US$3.1 billion in remittances in 2008 and despite thefinancial crisis remittances rates have increased by almost 5%. The Dominican Republicis in a relatively stable political and economic situation at present.The benefits of promoting clean energy in developing countries (especially those withlow electrification rates) are well documented. Fostering access to electricity enablessubstantial improvement in living conditions of the poor and positively influences ruraleconomic development. It provides opportunities to increase income and assets byextending the work-day or making the operation of machinery more efficient andeffective. It provides health benefits by improving the air quality leading to less visionand respiratory problems. It also enhances the effectiveness of social services bysupporting education goals – children and adults can study in the evenings under electriclights. There are also important gender implications in improving energy services forpoor families, which particularly benefit women and girls. Most family’s energy needsare met largely by women and children (especially girls), and time spent in fuel collectionby women in fuel-scarce areas can range from 1 hour to 5 hours per household per day.Fuel and water collection limit the participation of children in school, impacting theirliteracy levels. Several studies also show that the number of households adoptingelectricity continues to grow for years after a village first receives electricity. Promotingthe use of clean, renewable energy technologies also contributes towards the globalobjective of reducing greenhouse gas emissions.While the benefits of promoting clean energy in developing countries are clear, until nowit has not been clear that poor people would be willing to use their remittances forpurchasing clean energy devices.In an effort to address this knowledge gap, Arc Finance and BASE undertook this marketresearch to determine if remittances are a viable source of end-user finance for thepurchase of energy products in the developing world. The project team carried out indepthmarket research in the form of three sets of focus group sessions - in New York,Haiti and the Dominican Republic respectively - to identify customer preferences andbehavior relating to business models/mechanisms used for remittances, types of serviceproviders, pricing structure and specific alternative energy products. Data was collectedin New York during September and in Haiti and the Dominican Republic during October2009.4 Migration
Keywords:
Type of product: Haiti Topics
Subtype of Product : Climate change
Author: Greg Watson,Arc Finance,Basel Agency for Sustainable Energy
Date of creation: 2010/08/07
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