Seychelles has secured financing for a total 54 million euros for a major water and sanitation project, which will start next year.

The project will cover renewal and expansion of water supply systems on the three main islands, increase the capacity of four existing desalination plants and upgrade the Hermitage and Cascade water works.

It will also involve major sewage works on Mahé and La Digue to avoid contamination of water supply systems.

The signing for the first concessionary loan for 10 million euros with the Agence Française de Développement (AFD) was signed at Liberty House yesterday between the Minister for Finance, Investment and Trade, Pierre Laporte, and the director of the Regional Agency of the AFD for Mauritius, Seychelles and the Commission de l’Océan Indien, Laurence Breton-Moyet.

This took place in the presence of principal secretary Steve Fanny from the Ministry of Finance, Trade and Investment, the chief executive of the Public Utilities Corporation Philip Morin and the French Chargé d’Affaires, Bernard Maizeret.

Conveying the Seychelles government’s gratitude to the AFD for its “re-engagement after a prolonged absence”, Mr Laporte said the financing contract is a “strong sign of this re-engagement”.

He noted that the loan for 10 million euros represents about 18% of the total project cost, which is being co-funded by the European Investment Bank (EIB) for 26.7 million euros.

Mr Laporte said that the AFD loan is being granted with a seven-year grace period, meaning that repayment will start in 2020.

The European Union (EU), through the African Water Facility, is for its part making a grant of 3.8 million euros, while the rest of the financing is expected to come from the Seychelles government.  

Mr Laporte said that the Seychelles water and sanitation project will help PUC alleviate water shortages through renewal and expansion of water supply, to reduce water loss and improve energy efficiency. 

It will also increase resilience of water supply to an increasingly uncertain climate and less predictable  rainfall patterns.

He added that upgrading sewage facilities on Mahe and construction of new sanitation infrastructure on La Digue will reduce the risk of the contamination of groundwater used for domestic purposes.

The scheme, Mr Laporte said, will also contribute  to improving environmental and natural disaster risk management, as well as overall water management.

Ms Laurence Breton-Moyet said her delegation was very happy about this project because it is a highly important demonstration of the capacity of European partners, EIB and the EU, to consolidate financial and technical solutions to their partners.

“We are working with the EIB, which acts as a leader in a very innovative mutual reliance for which we optimise synergies to benefit our partners.”

Ms Breton-Moyet said the AFD is very active in green economy at the regional level and have developed a first credit line with four banks in Mauritius, which allows for strong incentives by way of subsidies to enterprises with green projects.

She added that AFD is now acting in more than 50 countries on most continents, with yearly financial commitments presently standing at 7 billion euros.

The scope of activities has also extended to climate change and biodiversity, while keeping core activities in economic growth support and social sectors.

Phase 1 of the project, which will start early next year, will include: water treatment plant rehabilitation and energy efficiency and enhancing services for the population, while remaining affordable.

Ms Breton-Moyet said Seychelles and AFD have a long established relationship which started in 1978, with projects covering water, fisheries tourism air transport etc.

This new project, she said, sees the return of AFD to Seychelles, after an agreement in July 2010 on the consolidation of debts between Seychelles and the French government.

Phase 2 will include the sewage system on Mahe and La Digue and upgraded water supply on Mahé.

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