Co-op Energy to pay $16 million investment to facilitate stalled sugar industry transition

Mere weeks into the 2025 sugarcane harvest, uncertainty prevails over the true ownership of Barbados’ sugar industry, Barbados TODAY can reveal exclusively.

Co-op Energy insisted that the government still controls the industry but the government maintained that Co-op Energy is in charge—despite failing to meet its end of the divestment bargain.

According to Lieutenant Colonel Trevor Browne, head of the Barbados Sustainable Energy Co-operative Society Limited (Co-op Energy), the transition of the sugar industry from the state-owned Barbados Agricultural Management Corporation (BAMC) to Co-op Energy remains incomplete, despite earlier claims suggesting otherwise.

“The BAMC is still running it. They haven’t handed it over to us,” Lt. Col. Browne told Barbados TODAY on Tuesday, stating that Co-op Energy had received no formal communication from the government about the transfer of assets.

“We’ve asked them and written to them. They haven’t even responded yet. And I don’t have any army that can go in and take it over.”

Lt. Col. Browne stressed that the handover had been stalled due to unresolved government-related issues.

“We were in the process of it, but the government never completed it. They never handed it over to us,” he said, describing the situation as “in abeyance.”

Challenging public statements that the handover had been finalised, Lt. Col. Browne questioned: “You should ask the minister when they plan to hand operations over to us . . . .Where in the budget did they explain the handover?”

In a Members’ General Update published on January 8, Co-op Energy detailed the roadblocks preventing the transition.

“The excellent progress that was initially made in the transfer of BAMC control . . . stalled when the government failed to produce independently verified valuations of the assets and liabilities to be transferred,” the update read.

“Co-op Energy has closely followed the steps outlined in both the initial Memorandum of Understanding as well as the shareholders’ agreement that was crafted by the government. The only outstanding matter now is for an independently verified statement of the assets and liabilities being transferred, to be provided by BAMC, and then for Co-op Energy to make the required share contributions.”

Minister of Agriculture Indar Weir firmly stated that the government will not transfer sugar industry assets to Co-op Energy until it fulfils its financial obligations. 

“Co-op Energy at this point in time has not yet put in its funds, and therefore we cannot transfer the government assets to Co-op Energy until they have put in their funds,” Weir declared.

The breakdown in communication is another source of contention. Browne maintains that the government has ignored Co-op Energy’s repeated requests for clarification.

“We have sent off not only one from last year but at least three letters between BAMC and the minister, and none of them have responded to any,” he said.

But in a response late Tuesday, Weir refuted this claim, insisting that the government had met all its obligations.

Minister of Agriculture Indar Weir.

“All we’re waiting for is for Co-op Energy to put in their investment,” he told Barbados TODAY. “But we have kept our end of the arrangement—that is to provide them with financial information, an MOU, and a shareholders’ agreement that they have signed on to.”

When pressed on whether Co-op Energy had been given a deadline, Weir confirmed that the company had signed the shareholders’ agreement before December 2023 and was expected to make its financial contribution at that time. Instead, he said, the company repeatedly sought and was granted extensions. “They asked for time and they were given time. They asked for time again and they were given time again. Then they came down and asked for financial information, and they were given financial information.”

Asked if the time given to Co-op Energy was sufficient, Weir was unequivocal: “More than enough. So, whatever is happening right now is on their end. The onus is on Co-op Energy to put in their investment. But I’m not transferring government assets to anybody until they put in their investment.”

Weir revealed that Co-op Energy was required to invest approximately $16 million, with an initial $4 million payment. To date, no payment has been made. “The total amount is somewhere around $16 million. To start with, we’ve asked them to put in about $4 million. They have not done so up to now.”

Despite the stalled financial commitment, Weir insisted that the industry continues to function: “The process is not stalled from our end because all government assets are currently being used by the two companies that were formed. Portvale Factory is being used to produce sugar and molasses under the new company. All the cane fields with the canes are being used under the new company ABC to produce canes for Portvale Factory.”

He further clarified that while the two private companies—Barbados Energy and Sugar Company (BESCO) Ltd and Agricultural Business Company (ABC) Ltd—are managing the industry, they do not yet own the assets as yet. 

He said: “They are companies. They are private companies. It’s just that they don’t own the assets at this point in time, but they are running the industry.”

In contrast, a press release issued by Co-op Energy on March 24, 2024 stated that the transition process had been completed. The release announced the division of BAMC into two separate entities—ABC Ltd, which oversees more than 4 500 acres of farmland, and BESCO Ltd, which manages the island’s only operable sugar factory, Portvale, in Blowers, St James. The release also confirmed that Co-op Energy holds a 55 per cent equity stake in both companies.

“On December 19, 2023, The Barbados Sustainable Energy Cooperative Society Ltd (Co-op Energy Barbados) took control of the operations of those sectors of the local sugar industry which were previously under the management of the Barbados Agricultural Management Company (BAMC) through our two new companies, ABC Ltd and BESCO Ltd . . . . Sugar operations under ABC and BESCO’s control and management commenced on January 15, 2024,” the statement said.

As the impasse continues, Lt Col. Browne urged the government to finalise the process and provide clarity on the future of the sugar industry: “We’re still interested, and we’re pretty sure we could run it completely differently. But the government needs to formalise the process.”

But Weir remained resolute. “What I will not do is give them title to government assets without them putting in their investment. That is the reason why government retains an interest in the project.” 

sheriabrathwaite@barbadostoday.bb