Cooperative to pump significant investment to transform sugar sector into energy industry
By Sheria Brathwaite
The Barbados Sustainable Energy Co-operative Society Limited (Co-op Energy) will be taking over management of the sugar industry from the Government before the end of the year.
In an exclusive interview with Barbados TODAY on Thursday, the co-op’s president Retired Lieutenant Colonel Trevor Browne announced that the intention is to not only take over the Barbados Agricultural Management Company (BAMC), which oversees the management, production and sale of sugar, but to transform the sugar industry into an energy industry.
Although he did not disclose the cost of the deal, Browne said Co-op Energy planned to invest more than $100 million to transform the sector, in collaboration with its credit union partners.
“We are more than 99 per cent certain that the co-op will take over the industry. Divestments have to happen before the end of the year and basically all that is happening now is that the Government has to tie up things on their end, making sure that all the legislation is in place and so on. So it is just to make the announcement,” Browne disclosed.
“But you must understand BAMC is a pretty big operation and for it to be divested is not an easy job, but the work that has been done by Ambassador Dr Clyde Mascoll and his team has been impressive. Since the 1950s, we’ve been talking about enfranchisement, and when it comes to actual ownership from a historical point of view, this will be a major breakthrough.”
Browne added that the transformation would be a historic move as ownership would be placed in the hands of workers and people of African descent.
“The best part is that 55 per cent of the ownership will be owned by the co-op, and past and present sugar workers, including field labourers, will own the other 45 per cent,” he said.
Under Co-op Energy’s management, the focus of the industry will shift, Browne said.
“The interest of the co-op in the sugar industry is not as it is. Our intention is to transform the sugar industry into an energy industry. We will be producing electricity and, as a byproduct, there will also be sugar and molasses. Even though there will be more sugar than there is now and more molasses than there is now, the key thing that we would be producing is energy . . . by burning bagasse as a biofuel. So instead of importing fossil fuel, we will be using the trash from the cane to produce electricity,” he said.
“There is a three- to four-year plan in terms of where we want to be. Where we are now, we estimate that in the next year or so we could do about 20 megawatts, which is about 15 per cent of the local demand. But the projection is that we can move to about 25 to 30 per cent in four years with the appropriate injection of capital and by improving the plant at Portvale. The idea is when you plug in something at home, your energy will be coming from sugar cane from Barbados rather than from fossil fuel from somewhere else.”
Browne described the plan as a “major reengineering of the industry to move from sugar as the primary product”.
“But there will also be major improvements in the way that we do sugar, the way we market it and the way we sell it and also the whole approach of molasses,” he added.
The co-op president added that two companies will be formed when his organisation takes over.
The Agricultural Business Company (ABC) will manage the 5 000 acres of land that belonged to the BAMC and the Barbados Energy and Sugar Company (BESCO) will manage the operations of the energy plant.
As it relates to the financial aspect of the undertaking, Browne said the co-op was collaborating with its credit union partners.
“It will be a substantial cost. We are looking at investments in the region of $100 million. When we do the projections compared to the returns, that is really nothing. So we project that we will be investing even more than that to further upgrade the efficiency and the capability of the plant to produce more energy.
“The co-operative movement in Barbados is very liquid. Credit unions alone have excess of $3 billion in assets and credit unions have been looking for a way to invest this on behalf of their 200 000-plus members, and energy is a way to do that,” he said.
Browne said the majority of the 5 000 acres the co-op was taking over would be used to grow cane and the rest would be used for other renewable energy projects.
He added that private cane farmers also stood to benefit from the takeover as they would be offered a more attractive price for their canes.
Noting that the project had major implications for the entire energy market in Barbados, Browne said the notion that the sugar industry was not profitable was misleading.
“From our assessment, the industry has the potential to be extremely successful. If you look at the performance over the last two years or so, you will see that since the new board of directors and the new management came in, they have made significant improvements in productivity and in profitability . . . ,” he said.
“So with this project, we are reducing the importation of fossil fuel, which is extremely expensive, which is also a form of pollution and causes issues in relation to climate change. So we’re actually solving multiple problems.”
Efforts to get comment from Minister of Agriculture Indar Weir were unsuccessful.
sheriabrathwaite@barbadostoday.bb
