New development fund to promote long-line fishery
29.07.2009
A new development fund aimed at boosting Seychelles’ semi-industrial fisheries is to be launched today.
Minister for Environment, Natural Resources and Transport Joel Morgan will launch the Fisheries Development Fund (FDF) as he opens the first Seychelles Long-line Fisheries Development Fair at Eden Island this afternoon.
With the fishing sector established as the second pillar of the economy, the fund will offer local and foreign investors a chance to help develop a local tuna long-line fishing fleet and promote shareholding investment between experienced foreign long-line boat owners and our local investors.
The fund has been set up by the government through the Seychelles Fishing Authority (SFA), in collaboration with the Seychelles Investment Bureau and the Development Bank of Seychelles (DBS). With a total allocation of €2.7 million, it is another positive step forward that reflects the government’s commitment to the fisheries industry and to carrying out Strategy 2017.
The agreement between the SFA and the DBS to set up the fund will be signed at the fair, which will open at 4pm.
Over the years, Seychellois involvement in industrial tuna long-line fishing has been relatively low, with catches around 300 tonnes. The main reason for this was a lack of local private access to capital that would stimulate development of the sector.
With the FDF, it is expected catches will increase to around 1,500 tonnes over the next two years. The fund is, therefore, seen as an important tool that will be used to drive investment while making capital available at favourable terms and conditions for Seychellois.
Besides making investment in partnership agreements for tuna long-line fishing easier, the FDF will also boost investment in: fisheries value addition and processing; upgrading of existing long-line vessels; and training of Maritime Training College graduates as skippers and mechanics to work on the long-line vessels.
However, further training will only be possible if candidates have proved themselves and worked for two years on a long-line boat.
The fund is not open to foreign partners, and in any joint arrangement with such partners foreign direct investment in the business is expected.
The two-day fair will promote investment links for the FDF, and the main criteria for borrowing from the scheme will be outlined as follows:
● A minimum personal contribution of 15% of the project cost. Joint ventures with foreign partners must be on the basis of a minimum 51% local shareholding;
● Due diligence on each investor (KYC – Know Your Customer) will be carried out;
● The interest rate will be 3%, and repayment will be for a period of not more than 10 years. The grace period with capitalised interest will be not more than nine months;
● Each project will be under a registered company and subject to company law;
● Loan payments and repayments will be in Seychelles rupees;
● The loan application fee will be 1% of the loan amount, not exceeding R10,000.
● There will be a penalty of 12% – or commercial bank rate +1% – in case of default;
● The guarantee and security for loans will be as per DBS requirements;
● In cases where fishing boats change ownership or there is a transfer of liability, this shall not be made without the consent of the SFA. Changes in use of the boat or fishing methods shall not be made before a period of 10 years.
During the fair, which closes tomorrow at 3pm, meetings between local and foreign potential investors will take place, followed by site visits to fishing port infrastructure and local processing plants.
The SFA sees the role of foreign investors as crucial in enhancing the knowledge and markets of our local fishermen, and the fair is expected to attract many potential investors who have been showing interest in the fishing sectors.