Israeli Cooperative for Renewable Energy

Executive summary, August 2011

The Cooperative for Renewable Energy is a social business initiative founded in October 2009. Its objective is to promote projects in the field of renewable energy and energy efficiency in Israel. Members of the Cooperative come from all walks of life, and share a socio-environmental worldview.

Background
"We are the first generation with tools to understand changes in the Earths system caused by human activity, and the last with the opportunity to influence the course of many of the changes now rapidly under way". (Peter Vitousek)

Following the rapidly developing infrastructures in the western world, and in the last years, also in China, India and other developing countries, there is a growing need for a transition from finite and polluting resources, such as oil and natural gas, to clean and renewable sources of energy. At the same time, there is a growing consensus that efficient management of energy consumption is ecologically, ethically and economically beneficent. Such implementation of energy efficiency is considered a low-risk, fast-yield investment with an annual return potential of 30% and more. Israel has a significant potential for both wind and solar energy production and is home to excellent entrepreneurial and academic resources. This potential, however, is far from fulfilled in any significant manner, due to a slow to react political and financial system.

It is the cooperative's belief due to the changes in global economies in general, and in the energy market in particular, the public must be given the opportunity to affect the Israeli energy market on both ethical and structural levels. To achieve that goal, we must establish a sustainable society that uses its resources in an educated manner, in which the individual benefits from the fruits of development and growth.

Goals of the Cooperative

To promote and implement projects in the fields of renewable energy, energy efficiency and efficient resource management. To actively remove market failures and bureaucratic constraints in these fields. To allow people of all walks of life to participate in the Cooperative's activities. This includes both financial participation - by acquisition of shares, and active participation in decision making and operations of the Cooperative.

To promote cooperation with different local groups: local authorities, businesses and communities.

To establish the Cooperative for Renewable Energies as a leading educational center for sustainability and community values, above and beyond any business and financial activities.

Why Go Cooperative?

In this day and age, we are witnessing a revival of the community by groups of common citizens, who wish to promote common goals and to fully participate in ethical and financial initiatives - to take part in its operation and enjoy its profits. Organizations that follow the cooperative model allow the community to promote renewable energy projects and technologies and energy-efficiency initiatives significantly faster, and with better effect compared to other public or private business organizations. This is possible due to the Cooperativeeration of the community and its local residents, which facilitates the removal of many bureaucratic and statutory obstructions.

Objectives for 2015

"Within 16 years, solar power will meet 100% of the world's energy needs." (Ray Kurzweil, Futurist)

Expansion to 3,500 members. Development and operation of at least 10 projects in the field of energy efficiency and 2 projects in the field of wind-generated power, with an overall investment of 3.5 million ILS (mostly from member-derived capital).

Achievement of overall net profit from various activities within 5-6 years, and distribution of dividend to the shareholders.

A positive financial and operational balance at all times - zero debt.

The Business Model

Fund Raising Member derived capital: Basic capital is raised from the members of the Cooperative (new and old). Shareholders are restricted to a maximum of 10 shares each. Ownership of the Cooperative and its assets are divided equally between members, regardless of the number of shares at their disposal. This capital is the basic source of investment in environmental and ethical initiatives. Profits are channeled into the Cooperative's operation and management expenses, and also into new projects. No member or party within the Cooperative profits in an unbalanced manner, and every shareholder gets one vote. Cooperative Capital: This capital is composed from member derived capital and from profits from Cooperative activities. It is re-invested in new projects and used to fund operative expenses, promotion of educational activities, development of services, promotion of the community, wages and dividends. Prospectus: This model of fund raising is accepted in public companies, but is considered innovative from the aspect of cooperatives. In compliance with the Israeli Securities Authority law and according to the Cooperatives policy of full transparency, we have published a prospectus in August 2011. We are also in the process of recruiting new members. Additionally, the cooperatives consitution was modified to allow for additional transparency and supervision.

These changes include, among others, the appointment of an external Comptroller and the addition of external directors to the board of directors.

"Changes are products of intensive efforts." (Dr, Muhammad Yunus, banker of the poor).

The Cooperative as a Social Enterprise

Recent social upheavals and financial crises have emphasized the need to allow any social body, interested in promoting social and ethical change, to operate as a regular company under the appropriate financial covenants. According to this worldview the Cooperative operates as a Social Enterprise. According to the definition that evolved due to similar initiatives, such as the Grameen Bank (established by Nobel Peace Prize laureate Muhammad Yunus) - a social

enterprise is an organization that uses business strategies to promote social

and ethical agendas, in compliance with clear restrictions, regarding profit optimization, and with full adherence to proper social and business conduct.

Structure of the Cooperative

Founders and members Members of the Cooperative, both its founders and the numerous individuals that joined our ranks, come from a broad spectrum of professions and sectors of Israeli society. Its founders include Dr Shachar Dolev research director in the Israel Energy Forum and one of the founders of the Israeli Association for Sustainable Economy; Hanan Einav-Levi, an aeronautic engineer and consultant in the field of solar and wind generated power; Roni Segoly a peace and

environmental activist and an experienced manager of many massive and complex initiatives and projects and many others. The General Assembly The Cooperative's general assembly includes anyone who has purchased at least one share. Today the membership numbers is about 140 shareholders. We expect a massive swelling of the ranks after the publication of the prospectus. Our goal is to develop a community, according to the vision and objectives of the Cooperative, and to raise the basic capital that will fund new projects and operation expenses. Board of Directors Dr Shachar Dolev, Roni Segoly, Hanan Einav-Levi, Meir Markovich, Youval Shalom, Dr Orly Ronen, Avi Lapidot and Dikla Buchnik central cooperation representative. Treasurer: Inbal Israel Internal Supervisor: Ran Ralevi, CPA.
"A small group of thoughtful people could change the world. Indeed, it's the only thing that ever has." Margaret Mead