BAMC boss backs Co-op Energy’s plan for sugar industry

The top brass of the Barbados Agricultural Management Company (BAMC) is endorsing the highly debated plan by the Barbados Sustainable Energy Co-operative Society Limited (Co-op Energy) to redirect the island’s sugar industry into renewable energy creation.

In an exclusive interview with Barbados TODAY, chief executive officer Orlanda Atherley confirmed he had knowledge of the model to be used and he stood by it because “it just made sense”.

He said what impressed him the most was the commitment to enfranchise workers and ordinary Barbadians.

Atherley’s endorsement of the move announced by Co-op Energy president Retired Lieutenant Colonel Trevor Browne comes as critics question the viability of the proposal to take over the assets of the BAMC and invest $100 million to transform the sugar industry into an energy producer, in partnership with the local credit union movement.

Atherley said he was satisfied the BAMC would be divested to an entity that saw its true potential and had the interest of workers at heart.

“We want people to understand that we didn’t now pick up this thing and we’re now saying, ‘hey, look, it has value’. We have been working towards reducing our costs and growing revenue and showing the public that now with the component of electricity from bagasse – the third portion of the cane that we have not been monetising – the industry is viable.

“The other thing we want to get across to the public is that cogeneration is nothing new to Portvale. Portvale as been doing cogeneration for as long as its existence . . . . It is now being contextualised into a different type of revenue system but Portvale produces at least 3.6 megawatts per year during the crop season that it uses internally,” Atherley said.

“So the skill sets are there, the expertise is there and the plant is there. It is for us to increase the material throughput by increasing the cane production and then increasing the variation in the cane to produce cane with a bit more fibre, which some people call high fibre canes. . . . So the due diligence will be done. We can stand up to the due diligence process based on the work that we have done over the last three years to get it here,” he added.

With several experts in related fields suggesting that Co-op Energy’s plans were not solid and questioning how the project would be financed, Atherley acknowledged that public debate on issues of national significance, such as this, was necessary.

However, he said people should not give misleading information about the industry to give the impression that it did not have potential.

Atherley also explained that the equity injection requested from Co-op Energy was just under $25 million, noting that the $100 million amounted to the debt financing required to upgrade the factory.

“I know there are those who would speak to the credit union movement and ask why the credit union. There is no better model of enfranchisement, particularly with the workers who themselves are in credit unions and have given humane service to this industry. Who better in terms of economic enfranchisement and wealth creation than to do this with? Who better than to partner with somebody who understands co-operative approach. I want people to see it in that context?”

The BAMC boss said that when Cabinet approves the proposal, which is anticipated by the end of the year, “the whole process will be transparent”.

“So for those armchair people, you’re free to have a conversation with me and I’m sure you’re free to have a conversation with Trevor Browne before you go in the media and quote numbers and information that is not reflective of where we are at. Make sure you have all the facts before you criticise, because you mislead people in terms of the potential of the opportunity,” he said.

“This is a process we started three years ago to prepare ourselves to get to this point, to find a partner who can come to the table and work with us and continue to extract the value for a wide cross section of Barbadians.

“When we look at their (Co-op Energy) strategy in terms of energy exploitation, they have the expertise. And I know people may ask where we can sell this electricity to — Barbados Light & Power through a power purchasing agreement with that company. The energy from bagasse is stable, it can be delivered after every crop season and lasts throughout the year,” the CEO said.

Asked what positioned the BAMC and its assets as an attractive package to buy, he pointed to its track record of growth over the past three years, noting that the state agency had restructured its operations model to make it more businesslike by putting strategies in place to increase cane production, cut down on time wastage during crop season, produce a better grade of sugar, and run the sector more efficiently.

Atherley added that just under 500 acres BAMC lands were put back into production and the relationship between private planters and the BAMC was improved by paying the planters on time and implementing an incentive programme for them to grow more canes and be paid more money.

Additionally, he said, the BAMC transitioned from producing bulk sugar to direct consumption sugar and was receiving approximately 40 per cent more earnings per tonne for the latter. The company is also producing 100 per cent of the sugar sold on the local market, selling more sugar regionally and has attained a contract to export direct consumption sugar to America.

The BAMC also invested $3.5 million to upgrade the facilities at Portvale and purchase new equipment such as harvesters and tractors.

As it relates to operational costs, Atherley said government subsidies had fallen from about $25 million before the Barbados Economic Recovery and Transformation was introduced in 2018, to between $7 million and $10 million.

“So Co-op Energy saw the progress that we have made over the last three years in reshaping the industry to what makes good financial and business sense potential,” he said.

Atherley added that the BAMC did a study tour to Belize to get further insight into redirecting the sugar industry as that country underwent a similar transformation.

sheriabrathwaite@barbadostoday.bb