The International Finance Corporation (IFC) – which is part of the World Bank – has signed an agreement with the government to finance renewable energy and energy-saving projects through the private sector.

IFC director for eastern and southern Africa Jean Philippe Prosper signed the agreement with the principal secretary for Finance and Trade Ahmed Afif, in the presence of Vice-President Danny Faure – who is also the Minister for Finance and Trade, Central Bank Governor Pierre Laporte and director for external finance management, Elizabeth Charles, after they held talks in Mr Faure’s office.

Mr Prosper said the IFC is ready to work with private firms through local banks, financing projects which can, for example, substitute electric water heaters with those run on solar power, or replace energy consuming bulbs or refrigerators with economical ones.

He said the IFC is the private sector arm of the World Bank Group which finances the private sector, but works with government in an advisory capacity.

“It is important that the Seychelles government is committed to bring clean energy and energy efficiency in Seychelles and the idea of this agreement is to see how we can work with the government and the private sector, and the banks to bring financing to support them in renewing their equipment.

He said solar-powered equipment may be more expensive initially but ultimately save energy by cutting electricity consumption, “making everybody better off – the government which has to generate a lot of power and having to increase prices when fuel costs rise and individuals’ pockets and more importantly, the children in the future when you consider environment conservation”.

Mr Prosper and the Seychelles delegation also looked at other aspects to improve investment climate in the country.
Mr Afif noted that banks have not been very forthcoming with finance but added efforts will be made to cut existing bottlenecks such as the high cost at which they offer loans.

“This agreement helps us know a bit better the direction we are moving in and also to put in place a sound financial mechanism,” he said.

“The banks can, for example, put in place a scheme through which individuals can apply for funds by getting favourable loans.

“The IFC may not necessarily work directly with individuals but it could work through such a scheme to bring the benefits of the finances they have to offer to people’s homes,” he said.