The Prime Minister spoke with the press at the groundbreaking for the BELCOGEN Plant in Orange Walk. BELCOGEN is short for Belize Co-Generation Limited, a subsidiary of Belize Sugar Industries. It will use the sugar by product to create electricity. For that reason and many others, it’s a very promising project with hardly any downside. 7NEWS traveled to the BSI Factory in Orange Walk to find out why even with earnings of $100 million annually, BSI needs BELCOGEN urgently.
Jules Vasquez Reporting,
Today the Prime Minister donned his hard hat and joined the Chairman of BSI Narry Newton, the Executive Director of BSI Joey Montalvo, Godwin Hulse, the Non-Executive Director of BSI, and representatives of three of the lending institutions to break ground for the BELCOGEN Plant.
Construction by a Chinese contractor will begin shortly and the 31.5-megawatt plant as depicted in these plans should be finished by the middle of 2009. It’s described as the richest investment in Belize’s history: US$62 million – funded by a consortium of banks and lending institutions and 100% guaranteed by BSI.
The plant will burn bagasse primarily. That’s the by-product of sugar cane processing – and up to now it had been a waste product. What you see here is the mountain of bagasse outside the BSI Factory. It’s been accumulating like this since 1966 and now it will be used to produce energy. That energy will be sold to BEL and will be applied into the national grid as a major source of power – providing as much as 20% of BEL’s peak demand.
It’s a plan that’s been very long in the making and the Chairman of BELCOGEN Joey Montalvo told us why.
Joey Montalvo, Chairman - BELCOGEN
“We had a long journey to get here, a lot of frustration, a lot of headaches but we’re here. The biggest hurdle basically was financing and being able to offer a 100% guarantee by Belize Sugar Industries because we have basically guaranteed the loans to BELCOGEN. Belize Sugar has guaranteed 100% loans to BELOGEN. That was the biggest hurdle to cross.”
And for that guarantee cane farmers will have to sacrifice their dividends until 2011. And while that may be one thorny issue, the sacrifice is to safeguard
an industry that is under threat from contracting quotas and low prices. In fact BELCOGEN’s creation of energy as a value added product is buying time for an industry that is facing extinction in other Caribbean countries.
Joey Montalvo,
”Co-generation will underpin the core of the sugar industry. Belize has said we are in there for the haul and that has basically come from the sugar industry itself, both mill and farmers who’ve committed themselves. If you look in the Caribbean and look at the ACPs there is so much turmoil. In the Caribbean it is only Belize and Guyana that will stay on its feet. The DR is now coming into Cari-Forum. We’re all working together. There is a wonderful opportunity for Belize. There is no reason why we can’t be efficient.”
Godwin Hulse, Non-Executive Director - BSI
“BSI and BELCOGEN have finally arrived at what it is by far the best deal for the company and for Belize; 100% ownership and a financing package which is affordable and serviceable. The impact of this investment, ladies and gentlemen will be felt immediately but the long term stability it brings to the industry will cement cane as a formidable crop long into the future. The fact that every time we turn on a light switch or we start a water pump or we open our refrigerator, our micro-oven, we can be assured that the energy which powered these devices is generated in Belize, using renewable and sustainable Belizean resources.”
And apart from saving an industry, it’s also making Belize self reliant.
Godwin Hulse,
“At the bagasse mounds that you can see behind you awaiting, its time to transfer its energy to electricity. How can you ever be without light and power again and that should make us all proud.”
Rt. Hon. Said Musa,
“Hydro, solar, gas and bio-energies, we are looking at all these alternatives and renewable energy resources. This ground breaking today ladies and gentlemen is a path breaking, historic event in this national undertaking of a public-private partnership that will be done for the benefit of all Belizeans.”
A good project in so many ways – but the Government of Belize is not one of the investors – largely because after years of dissolute spending it has nothing to invest.
Jules Vasquez,
When one sees a project like this, BELCOGEN, that is good in so many ways, do you regret having invested in waste projects such as Galleria Maya and Intelco in this same area?
Rt. Hon. Said Musa,
“You're asking me to indulge in regrets. What I would regret is that the people we trusted in the private sector to carry out these projects, they did not do so. That is the regret of course.”
Jules Vasquez,
But it was a poor decision on your part to have attracted those people with public funds.
Rt. Hon. Said Musa,
“That’s what you’ve been saying all along. We believe that in the business of carrying out development, any government that has a sense of urgency to address an economy that was stagnant back in 1998 to get things moving again, we had to take certain risks and these risks had to be done with potential partners in the private sector, that is how you bring about development. Government has to work with the private sector. And yes, some of these projects did not turn out the way we intended them so yes I regret that.”
Once it becomes operational, BELCOGEN will employ 50 persons. In its first years it expects to generate revenue of $20 million. As regards direct earnings to cane farmers derived from BELCOGEN, none are foreseen - unless those cane farmers invest in BELCOGEN.
