15 November 2015, Victoria — Seychelles has secured funding from the Arab Bank for Economic Development in Africa (BADEA) and the Saudi Fund for Development to improve the distribution of electricity in the island nation.
The two institutions are providing a joint loan amounting to $31 million to fund a project which will be implemented by the island nation’s Public Utilities Corporation (PUC), to have a 33KV transmission and distribution electricity network for the southern region of the main island of Mahé.
The sum of $11 million will come from BADEA while the Saudi Fund for Development is providing the remaining $20 million.
Discussions between Seychelles and BADEA about the possible funding of the project started as early as May last year. This was in the margins of the Annual meeting of the African Development Bank during which Seychelles signed a loan agreement with BADEA to finance the second phase of the provision of utilities and infrastructure building for the Ile Perseverance housing project, the largest social housing project undertaken by the Seychelles government on a reclaimed island next to the main island of Mahé.
It’s the Chairman of BADEA’s Board of Directors also Vice Chairman and Managing Director of the Saudi Fund for Development, Yousef Ibrahim Al Bassam who joined the Seychelles Minister of Finance, Trade and the Blue Economy,Jean Paul Adam in the island nation’s capital of Victoria on Tuesday, to sign the new loan agreements to fund the electricity project.
Al Bassam is in the country to attend the African Prosperity Conference, being held at Eden Bleu Hotel on Eden Island, organised by the Pan African Chamber of Commerce and Industry (PACCI) in partnership with the Seychelles Chamber of Commerce and Industry (SCCI).
Speaking to SNA this morning, the Chief Executive Officer of the Seychelles Public Utilities Corporation, PUC, Philip Morin said the 33KV transmission and distribution electricity network project for the South Mahé is necessary to be able to cope with increased demand.
The project itself is expected to start next year, although PUC has already started to extend the distribution network from Roche Caiman up the international airport on the eastern coast of the main island of Mahé.
“The loan will help us to go beyond that. We will need to build substations along the way including at Providence, at the airport etc… substations where we will have transformers and switches to be able to do local distribution,” Morin explained.
“The 33KV transmission and distribution network will start at the Roche Caiman power station down the eastern coast and into the South and then back up along the West Coast to Anse Boileau where PUC has an existing 33KV network.”
According to Morin the project which is expected to take two years to materialize will allow the electricity provider to deliver a better service to residents of the southern region where almost ten thousand people and some 13 hotels are expected to benefit from the new transmission and distribution network.
“Demand is continually increasing with a large number of hotel developments earmarked for the South of Mahé and a number of existing hotels today are not connected to PUC’s electricity network and are producing their own electricity… with the new project PUC will be able to connect them to the network.”
The Seychelles government is contributing the sum of $5 million towards the project.
According to the Seychelles finance ministry the $11 million loan will be reimbursed over 22 years at an annual interest rate of 2.5% and that the agreement also includes a grace period of 5 years. The repayment for the $20 million loan will be over 20 years at an interest rate of 2% and it also includes a grace period of 5 years.
During discussions at State House with the Seychelles incumbent President James Michel on Tuesday the Chairman of BADEA’s Board of Directors also Vice Chairman and Managing Director of the Saudi Fund for Development, Yousef Ibrahim Al Bassam discussed future projects in which the institutions could partner with the Seychelles.
This includes in the energy sector as well as infrastructure for the development of small and Medium Enterprises and micro-finance projects.