Tax breaks proposed for energy-efficient home owners |03 May 2013

This is the view of finance and trade principal secretary Dr Steve Fanny, who has said the government’s aim is to reduce Seychelles’ dependence on fossil fuels.

The Ministry of Finance, Trade and Investment, in partnership with the International Finance Corporation (IFC), launched a workshop on the proposed Seychelles Energy Efficient Practices and Renewable Resources Programme (Seerep) yesterday at the Berjaya Beau Vallon Bay.

The IFC is the private sector arm of the World Bank and its main purpose is to promote sustainable private sector development in developing countries.

The workshop was attended by Central Bank governor Caroline Abel, revenue commissioner Jennifer Morel and representatives from the private banking sector and other government institutions.
The programme aims to encourage the adoption of energy-efficient home appliances, lighting and solar water heaters in the domestic residential sector.

The initiative is also proposing an affordable financing solution where banks will be able to finance conversions without taking on the risk for the loan.

“We feel that this model is one that can be mirrored and replicated in other parts of the economy as well as in other parts of Africa and the rest of the developing world,” said Dr Fanny.

Omar Seydi, IFC director for East and Southern Africa, said the World Bank believes that lifting people out of poverty and offering them a fair chance for economic inclusion also requires a clean and sustainable living environment conducive to growth and well-being.

“From our perspective, the advantages of the proposed programme here in Seychelles is that it brings together key stakeholders to think and find solutions that will be implemented by them for the benefit of this country,” said Mr Seydi.

“The access to finance and credit mechanism is predominantly funded through local sources, and that’s a very important component of this programme: working with local banks and using tax credit incentive mechanisms rather than subsidised funding,” explained Mr Seydi.

The IFC director said the programme would target 11,000 households over a two-year period, with a total investment of between R65-85 million.
“This will result in the shedding of not only R12 million for consumers but also heavy fuel imports worth about US $2 million a year if the target segment of 11,000 households is well-served,” said Mr Seydi.

“At the IFC, we are very hopeful that we can support the government’s vision for a carbon-free Seychelles by 2020,” said an enthusiastic Mr Seydi.

“I believe this is the first programme of its kind in this part of the world, and Seychelles as an island economy is showing the way, conscious of its responsibility towards its citizens and towards the world at large.”

Mr Rakesh Jha, the managing director of Barclays Seychelles, was optimistic about the proposed initiative, saying it was a good step towards exposing citizens of Seychelles to clean, sustainable and renewable energy.

Mr Jha cautioned that the benefits of the scheme would need to be clearly communicated to consumers.

“The main question will be how consumers will perceive and absorb this and take it forward,” Mr Jha elaborated.
“We can have the scheme in place, but the success of the campaign will depend on how people will come forward and take a step in the right direction.”

“As far as the banks are concerned, I think it’s an extension of what we already do, as we do already provide customers with mortgages. Therefore we are ready and willing to partner with the agencies which are going to work with us on this.”