JANUARY 15, 2010, 8:36 P.M. ET

UPDATE:Soros's Open Society Expects Delays For Haiti Projects

By Naureen S. Malik
OF DOW JONES NEWSWIRES

NEW YORK (Dow Jones)???The earthquake that rocked Haiti Tuesday causing widespread damage could result in significant delays of industrial development projects led by bllionaire George Soros's Open Society Institute.

Stewart Paperin, president of the Soros Economic Development Fund, said the devastation caused by the earthquake will significantly delay the development of the $50 million, 1 million-square-foot INDUSTRIAL PARK AND FREE TRADE ZONE in the impoverished outskirts of Haiti's capital Port-au-Prince.

The fund is considering an equity investment of $10 million into the park that would be matched by a $12 million investment from the WIN Group, a Haiti-based conglomerate, Paperin said. The organization is seeking to secure the rest of the capital needed through debt financing from international organizations such as the U.S. Overseas Investment Private Corp.

"We thought we would have documentation done and financing arranged by somewhere in the third and fourth quarter this year and now this [earthquake] clearly is going to set that back," Paperin said.

Development of the industrial park that would house roughly 40 manufacturing facilities and warehouses is highly dependent on the access to roads, power and other basic infrastructure. "We just don't know what the situation is," said Paperin, who has been speaking with U.S. and Haiti government officials as well as investors.

The organization has also been reviewing a number of other projects in Haiti, including a mango exporting operation as well as a second industrial park along the a Dominican manufacturer interested in setting up a facility along the boarder. Paperin said those plans also will likely be delayed.

Paperin said that the Open Society is eager to get involved in reconstruction efforts through the development fund and its local foundation, the Fondation Connaissance et Liberte, or Fokal.

On Friday, the Open Society announced that George Soros is donating an initial $4 million to Haiti to aid earthquake victims that will be distributed through Fokal. The money will be split evenly across four organizations involved in relief efforts in Haiti, including Medecins Sans Frontieres, Save the Children, CARE and Catholic Relief Services.

Fokal was set in 1995 to support urban reconstruction efforts to set up community centers, build libraries and make clean water available, Silber said. Soros has contributed more than $50 million since then. "Fokal wanted us to give this initial [donation] to get relief under way and they will guide our next phase of involvement in Haiti," said Open Society spokeswoman Laura Silber.

Meanwhile, Paperin said the Soros Economic Development Fund, which invests in profitable ventures and then recycles that capital back into other projects, said that while reconstruction efforts are critical, the industrial park is still a priority.

The Haiti project has been garnering interest among manufacturers of the duty-free zone that is also in close proximity to the U.S. Labor costs are among the lowest in the manufacturing world, comparable to Vietnam, Paperin said. Ultimately, though, "you can't sign up somebody until you have something to sign up," he added.

Construction for the park were expected to be mostly completed by the end of 2012 and create 25,000 jobs with another 4-5 for each position in supporting industries, Paperin said. A partner in this project, WIN Group has a 1.2-million square foot industrial park directly across from the proposed free trade zone.

In the meantime, it is unclear how long it will take to address basic needs and resume reconstruction efforts. "Now of course it's not about reconstruction, it's about saving lives," Silber said.

-By Naureen S. Malik, Dow Jones Newswires; 212-416-4210; naureen.malik@dowjones.com

http://online.wsj.com/article/BT-CO-201 ... 13757.html

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