The Barbados Sustainable Energy Co-operative Society Limited (Co-op Energy) has revealed that it has international financial backing to redirect the island’s sugar industry to renewable energy production, as it hit back at critics who have suggested that the plan is not on solid ground.
Clearing the air on where the proposed $100 million investment would come from when his organisaton takes over Barbados Agricultural Management Company (BAMC), president Retired Lieutenant Colonel Trevor Browne insisted on Wednesday that Co-op Energy would not be looking to the credit unions even though it is partnering with the co-operative moment.
Standing firmly behind his organisation’s plan, he said people had been speaking negatively of it although they were not aware of the details.
“There are always people who will say [negative] things like that. Most of those people do not know what we are talking about, how it is going to work, what the [actual] plan is or what resources we have . . . . They assume that the plan is to take up the credit unions’ money; nothing like that is intended. In most cases, once we explain what the actual intent is and how it is going to work, people have retreated from that false accusation,” he told Barbados TODAY on Wednesday.
Since last week’s announcement by Browne that Co-op Energy should be taking over the state agency responsible for overseeing the management, production and sale of sugar by year end, subject to Cabinet’s sign-off, several experts in related fields have questioned where the financial investment would come from and whether the co-op would be able to compete with the established players in the alternative energy sector.
However, in an interview with Barbados TODAY, he asserted that his organisation’s plans were sound and he and his team were confident about what they had set out to do.
Browne stressed that while Co-op Energy will partner with the local credit union movement to bring the plans to fruition, there was no intention “to take up the credit unions’ money”.
He said the venture had attracted the support of international investors as well as the International Co-operative Alliance, and assured there would be a guaranteed market for the energy that would be produced.
“What we are hoping to get from the credit union is access to human resources. There are a number of managers in the movement who understand co-operatives and who have managed multi-million dollar operations. That makes us confident that we can find the type of people [locally] to make this successful,” Browne explained.
He said getting capital to kickstart the project was “not a problem”, adding that there was significant interest from investors locally and abroad because of the projected rates of return.
“All anyone needs to do is to look at the type of returns, for example, that Barbados Light & Power has been able to earn from investments in energy over the last 100 years, last year and the last ten years. Once you understand the kind of returns that are available for energy, raising funds is not really a problem. In fact, what attracted us to this entire thing was the high interest in overseas investors rushing here to do investments so that they could benefit from the kind of returns that come from it,” he said.
“We have had several discussions with fellow co-operatives in Canada that do the same thing and the problem that they have is that they don’t have enough investment opportunities from the demand they get from the general public . . . . We anticipate that there will be a similar response in Barbados. People will be attracted to a sound investment, getting good returns, so we don’t anticipate any difficulties in raising funds.”
Browne added that even with that investment interest, his organisation wanted “a broader base of investment that is the co-operative style”.
“So we are partnering with credit unions but not with their money. What we anticipate is that the credit unions will work with their members to pool the members’ resources so they will get an opportunity to invest. We prefer that than, for example, one person coming and putting in millions of dollars. So we are not after the credit unions’ money,” he said.
Browne also insisted that Co-op Energy’s plan was not created overnight and it took careful thought and planning.
“We have been studying this for years and we know what we are doing. We have access to international partners in the co-operative movement, the International Co-operative Alliance, through whom we have access to significant resources in technology and financing.
“We also have buy-in from the Ministry of Energy which dictates how licences work. There is definitely a commitment that energy produced, the way that we will be producing it, will be headed to the grid,” he explained.
Browne said what his organisation was trying to do was nothing new, as there had been other successful ventures in the past coming out of the co-operative movement.
“This happens all the time. [When] Co-operators General Insurance Co. Ltd started over 30 years ago, it was the same identical situation where people said the plan was to take up credit union money. If you look at that insurance company, it is extremely successful, doing outstanding work and belongs to the credit union movement,” he pointed out.
As it relates to the agronomic aspect of the venture, the Co-op Energy president said there is a plan to improve production and yields.
“And, in turn, pay better returns for people growing cane. We anticipate that going down the road, it may be well worthwhile for a person owning an acre or two to plant that in cane, based on the returns they will get, rather than installing solar panels.
“Solar panels are intermittent sources of energy and they are fragile. The extent to which they can go onto the system is limited and BL&P sent out a letter to that effect last November. So what we are finding is that there are a large number of people investing money in those intermittent sources that will be having serious difficulties connecting to the system (grid). It is actually inherently unstable,” he said.
Browne added that he welcomed feedback from the public regarding the venture, noting that it “gives us the opportunity to explain these complex issues to the general public so they understand and become more comfortable with what we are trying to do”.
In an interview with Barbados TODAY last week, Browne disclosed that under his organisation’s management, ownership of the sugar industry would be 55 per cent that of the co-op, with the other 45 per cent going to past and present sugar workers, including field labourers.
He said 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.
“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 had said.
sheriabrathwaite@barbadostoday.bb
