A €27 million financing agreement for a major water and sanitation project in Seychelles has been signed with the European Investment Bank (EIB).

Principal secretary for Finance, Ahmed Afif, and the EIB head of the Southern Africa and Indian Ocean Division, Serge Klumper, signed the agreement in a ceremony last Thursday at the Ministry of Foreign Affairs’ headquarters at Mont Fleuri.

Also present at the signing was the head of the European Delegation to Seychelles, Ambassador Alessandro Mariani, and French Ambassador to Seychelles, Philippe Delacroix, as well as representatives from the Ministry of Finance, the Ministry of Foreign Affairs, the EU, and the Public Utilities Corporation (PUC).

Specific components of the project include an extensive programme to reduce non-revenue water, including both technical and commercial losses, increasing the capacity of four existing desalination plants on Mahé, La Digue and Praslin, improvements to the Hermitage and Cascade water treatment plants, a first time sewerage system on La Digue and extensions to the Mahé sewerage network.

The water network will also be rationalised to improve pressure management and reduce leakages.

In addition to these projects, grants will be provided for a capacity building programme at the PUC.

This innovative financing agreement, the second of its kind to be signed with Seychelles following the internet submarine cable project launched in 2011, has been described as a prime example of sustainable financing by the Minister for Foreign Affairs, Jean-Paul Adam.

“When we talk about sustainable development, we need to look at sustainable financing.
 Traditionally small islands developing states like Seychelles have always had difficulty in raising large scale funding for development projects, which has forced us to borrow at commercial rates thereby contributing to a high debt burden,” said the minister.

Funding for the project -- which is being co financed by the Agence Française de Développement, the European Union and the African Development Bank -- is being provided on concessionary terms and also includes a component of technical assistance grants from the European Development fund (EDF).

Ambassador Mariani said addressing the drinking water supply situation in Seychelles is of great importance to the population as well as for sustaining its economy, which needs to be consolidated further in order to allow the country to maintain and improve the people’s living conditions.

“The European Union – while increasing by 500% and re-orienting its grants to Seychelles -- has however continued to follow closely the water sector preparation in coordination with the L’Agence Française de Développement and the European Investment Bank,” he said.

“We very much welcome the adoption of a water masterplan by the government which is the basis for donors and investors’ interventions, a masterplan that has identified both the critical short-term needs and the medium to long-term projects required to endure adequate year-round water supply.”

Mr Klumper noted that the project will help the PUC to grow as an organisation. 
“There are clear opportunities to develop project management skills, train staff, recruit the next generation of young engineers, all of which will be supported by funds provided by PUC from the European Commission funds for external expert support and extensive capacity-building programmes,” he said.

PUC’s chief executive Philip Morin has said that these projects will enable PUC to give better water and sanitation services, increase and optimise operational performances and generate a higher level of environmental performance.

“The direct social impact these projects will have on the population will be the improved social wellbeing of the nation as service will improve,” said Mr Morin.

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