BENU Eco Village Headed for Liquidation

The management of BENU Village Esch asbl recently announced its request to liquidate the non-profit organisation.

This decision followed the news that the sustainability-focused non-profit would no longer receive public money following claims of poor management.

Luxembourg's Ministry of the Environment, Climate and Sustainable Development and the City of Esch-sur-Alzette shared the conclusions of an analysis of the BENU Village Esch, as carried out by an independent expert, in light of reports that BENU was in financial difficulty.

The authorities recalled that they had financially supported BENU since the beginning. However, the analysis results led to the decision that the non-profit's agreement with the City of Esch-sur-Alzette, which "substantially" supported the project, would end on 31 December 2023.

According to the authorities, those in charge of BENU had failed to establish a proper management strategy or secure appropriate financing agreements. The non-profit also experienced a "significant" increase in expenses from 2019 to 2023, which the authorities described as "disproportionate" to the funds available in the medium and long term.

The number of employees also increased from seventeen in 2021 to 42 as of November 2023; in 2023 alone, this number rose from 29 to 42. This represented an increase in personnel costs of approximately 75% in 2023.

The authorities recalled that to date, BENU's activities have mainly been financed by grants from various external (mainly public) actors, and project revenues did not cover project costs. Thus, operational expenses continued to increase while the turnover generated by BENU remained constant between 2019 and 2022. The non-profit's forecast turnover of €534,000 for 2023 was not enough to absorb the deficit of activities which had increased by €1,500,000 since 2019, added the authorities.

More precisely, despite multiple subsidies, BENU had accumulated a debt of €945,870 as of 15 October 2023. Concretely, according to estimates made by BENU, the subsidy needs would be at least €1.3 million to redress the accounts and €2 million to be paid annually (excluding investments) to carry out current activities with the current team of 42 people.

The authorities attributed this exponential growth in BENU's financial operating expenses to "poor financial management" (particularly an "irresponsible" hiring policy) that did not reflect the reality of the non-profit's turnover.

The authorities concluded that, at this stage, a new public subsidy would not resolve the cash management problems of BENU Village Esch asbl nor would it reduce its dependence on public money in the medium or long term. As such, a new public subsidy would not be possible in the short-term in the absence of a recovery plan.

Nevertheless, representatives of the City of Esch-sur-Alzette and public authorities emphasised their desire to continue to support the implementation of "concrete" and "beneficial" actions linked to sustainable development and the circular economy. They added that they were examining opportunities to contribute to a viable restructuring of the non-profit's activity.

Shortly after this news, BENU's management announced its decision to request liquidation of the non-profit. The management reflected on the actions carried out over the years and thanked all those involved in the project.

Other members of the BENU team (non-management) have since made public a letter addressed to the City of Esch-sur-Alzette and the Environment Ministry, in which they express their wish to meet with the authorities and discuss the possibility of working together on "a new ecological and social project based on BENU expertise." They noted that they had already requested a meeting with management to find out the next steps. The letter was circulated on the (former) employees' new social media page - other official BENU accounts are no longer available.