Innovative Renewable Energy Funding Solutions For Third Sector Enterprises

The Barbados ‘Third Sector’ (comprised of over 1,000 registered charities, not-for-profit, voluntary organisations, informal community groups, NGOs and social enterprises) is challenged to remain relevant and sustainable in today’s austere economic times. Most of these third sector enterprises (TSEs) rely on philanthropic and/or Government support to continue operations. Few of them earn adequate levels of […]

By Peter N. Boos

June 14, 2018

Verdun House solar panels

The Barbados ‘Third Sector’ (comprised of over 1,000 registered charities, not-for-profit, voluntary organisations, informal community groups, NGOs and social enterprises) is challenged to remain relevant and sustainable in today’s austere economic times.

Most of these third sector enterprises (TSEs) rely on philanthropic and/or Government support to continue operations. Few of them earn adequate levels of income from selling goods or services to pay for their operations.

Yet these TSEs provide essential public services in such areas as caring for the disabled, the mentally ill, the poor, underprivileged children, among others. Currently, there are no viable alternative options to support these vulnerable social groups.

This reality is a huge threat and risk to social stability in Barbados.

In our current state of economic crisis where sharp cuts in non-essential Government expenditures are demanded, TSEs will either discontinue operations or must find alternative solutions for their sustainability.

Most TSEs in Barbados apart from being underfunded are also operationally weak.

Research on the Third Sector (October 2014) lead to the establishment of Aspire Foundation(Barbados) Inc., in 2016, with the vision to ‘help charities help’.

This Charities Incubator Programme seeks to develop charities through reduction of their structural deficiencies to enable them to reach international standards of accreditation, which in turn should support their sustainability. 

This article is a brief case study of the sustainability efforts being pursued by The Substance Abuse Foundation Inc., a registered Barbados charity, providing services to women and men and their families suffering from the impacts of the mental health disease of addiction.

SAF has a strong performance record over the last 20 years.

Its funding (both cash and in kind) has come from many stakeholders, but primarily from two wealthy foreign philanthropic families (60%), Barbados Government grants (25%) fund-raising and other sources (10%), fees etc.(5%).

This model is clearly not reliably sustainable, especially as there is a huge risk that philanthropic donations might cease or fall dramatically. In addition, the level of Government support has remained unchanged for over 10 years and may now be reduced under new austerity measures soon to be announced.

With annual expenditure of about BBD $4 million, the challenge to substitute philanthropic donations of about BBD $2.5 million p.a. is daunting.

The closure of Verdun House and Marina House would create a huge social problem for all Barbadians.

To address this issue strategically, in 2017 SAF was able to secure private funding to invest in an initial 170 kw Renewable Energy Solar Energy System, whose output is purchased by the Island’s sole power company, The Barbados Light & Power Co. Ltd., under its innovative Renewable Energy Rider programme (RER).

Under the RER programme, BL&P will interconnect with a Customer-Generator who operates wind and/or solar generating systems and purchase electrical energy generated by those customers at the approved tariff rate.

The revenue from this investment is guaranteed for a minimum of 10 years at a fixed rate.

Verdun Solar

This innovative start to solving SAF’s long-term funding needs was recognised on World Environment Day, 6 June 2018, by the UNDP. Through its Global Environment Facility Small Grant’s Programme, SAF received a grant of BBD$100,000.

Addressing the signing ceremony at Verdun House, David Bynoe, National Cordinator of the UNDP’s Global Environment Facility Small Grants Programme, said:

It is with great pleasure that I join you here this afternoon on World Environment Day. It is indeed my pleasure because this afternoon we jointly launch the Substance Abuse Foundation Renewable Energy Farm Project with funding from the Global Environment Facility Small Grants Programme (GEF SGP) and many private sector partners. The partnership is both symbolic and catalytic in securing a green and sustainable future for Barbados. This launch and associated project demonstrates that Civil Society in partnership with Government and the Private Sector has a very important role to play in addressing the global climate and energy issues faced by the world today and in establishing a business model to facilitate this pursuit.

Such partnerships are important to achieve both Sustainable Development Goal (SDG) 7 and 13.

SDG 7 calls for the achievement of Affordable and Clean Energy – Ensure access to affordable, reliable, sustainable and modern energy for all and SGG 13 calls for Climate Action – Take urgent action to combat climate change and its impacts by regulating emissions and promoting developments in renewable energy.

At the national level the Nationally Determined Contribution (NDC) and the pursuit of the green economy is hinged on renewable energy.

This project is in alignment to these goals, Nationally Determined Contributions and the pursuit of the green economy.

With reference to SGP, the project fits within our Country Programme Strategy thematic area that focuses on providing sustainable energy access with co-benefits. A quick review of the objectives makes this explicitly clear. The project seeks to:

  1. Transition from traditional avenues of electricity usage to renewable by installing 502 solar panels. The amount that carbon emissions will be reduced by is 184,000 kg (184 Tonnes) CO2 per annum.
  2. Create a long-term stable income stream of approximately $100,000 to support SAF’s educational and rehabilitation programs and services that support vulnerable men, women and children.
  3. Provide an additional educational and employment training avenue for approximately 5 female clients and 15 male clients annually as part of our Second Stage rehabilitation and societal re-entry programming. These clients will be trained in the maintenance of the solar panels.

The objectives and associated scope of this project are very commendable. I would therefore like to take this opportunity to recognize the work done by the SAF to transition this project from idea to reality.

The potential of Civil Society within Barbados if fully unlocked and facilitated through greater involvement in policy development and implementation will exponentially pay dividends to the advancement of the sustainable development of Barbados. It is for this reason that GEF SGP endorses the expansion of the Social Partnership to include more and varied civil society voices. Civil Society plays key roles in pushing for new laws, programmes, policies or strategies, in holding governments accountable on their commitments; in identifying the lack of joined-up government responses and in ensuring that national policy making does not forget the poor and vulnerable.

Given the great responsibility that falls on the shoulders of Civil Society as they are called upon to address the sustainable development challenges of the 21st century, a stronger, more dynamic and more vocal Civil Society needs to emerge. A Civil Society that leads by example and engages with government and the private sector on a solid footing.

The GEF SGP remains committed to providing the catalyst required to foster this metamorphosis of Barbadian Civil Society, along with civil societies in over 126 countries around the world, as we partner to save our world, taking community action that cumulatively has a positive global impact.”

SAF now plans to pursue expansion of its RE footprint to the extent that a significant proportion of its income would be from Renewable Energy investments, working in partnership with the BL&P and others.

This model is replicable for funding many of our TSEs.

The benefits are many and include sustainability of the vital social services provided by TSEs and a reduction of the need for Government to fund TSEs.

The next step in the challenge is to develop the financing model for TSEs to make the substantial investment in RE projects.

This should be achievable in collaboration with stakeholders, including the BL&P and Government.

BL&P 100/100 Vision

“The BLPC’s vision is summarized with the goal of 100% renewable electricity and 100% electrification of the island economy by 2045.

BLPC’s vision is in concert with the Government of Barbados’ National Sustainable Draft Energy Policy and enabling legislative framework.

BLPC is committed to undertaking a major shift towards renewable and clean energy sources in order to reduce the nation’s dependence on fossil fuel sources, reduce foreign exchange pressure and introduce price stability for all of our customers.

The transformation has already started with the introduction of a Renewable Energy Rider (RER) programme by BLPC for residential/commercial solar PV and wind, the BLPC St. Lucy Solar project (10MW), plans for the development of a 10MW Wind farm at Lamberts and the commencement of an investment in advanced metering communications infrastructure (the smart grid foundation).

The ultimate long-term goals for Barbados are:

  • 100% Renewable or Clean Energy
  • 100% Electrification of business, industry and transportation

This is our 100/100 Vision.”

source: BL&P 13 April 2017.

Based on the BL&P’s 100/100 Vision it is reasonable to plan that within 10 years the Barbados Third Sector could be substantially funded via Renewable Energy Investment Income with very little reliance on taxpayers to fund their ongoing operations.

If we are to accomplish the above, the establishment of a Barbados Third Sector Renewable Energy Investment Fund is therefore desirable.

Initially an annual income generation target of BBD$10 million seems significant enough to drive effective action. The capital investment needed, (say BBD$100 million) can be raised through a number of strategies, much in foreign exchange, to earn this prospective income. The details are yet to be determined but given that the energy sources are essentially freely available to us all (sun, wind and water) and capital is plentiful through many avenues (IDAs, Crowdfunding, Philanthropy etc.) the solution is well within our grasp.

Peter N. Boos

Chairman Emeritus Ernst & Young Caribbean (since 2004); Founding partner Business Barbados publication (1999) and the Barbados business web portal (2009); Co-Founder, Chairman and CEO Substance Abuse Foundation Inc. (1996 to date); Founding Sponsor (2009) and First Chairman (2009-2014) Barbados Entrepreneurship Foundation Inc.; Founder of the Peter Boos Foundation (2004), (supporting youth development, entrepreneurship, education, addiction treatment, environmental protection, arts & culture development, relief of poverty and support of various community and charitable causes); Founder, Patron and first chairman ASPIRE Foundation (Barbados) Inc. - 'helping charities help' to strengthen and expand the Barbados Third Sector (2014 to date).