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Archive -Seychelles

Energy saving financial schemes underutilised, say banks |02 August 2014

The energy saving financial schemes designed to encourage Seychellois to invest in more environmentally friendly domestic devices and encourage the eventual switch from fossil fuel dependency to renewable energy are being underutilised.

This was revealed by bank managers during a consultative meeting with the Minister for Finance, Trade and Investment Pierre Laporte at the National Tender Board conference room on Francis Rachel Street yesterday afternoon.

Other partners in the business sector including money changer managers, members of the Seychelles Chamber of Commerce and Industry (SCCI), representatives of the Central Bank of Seychelles, Seychelles Investment Board (SIB) and Seychelles Pension Fund were also present among other business people.

The bankers informed the Finance Minister that they are not getting request for loans under the government’s low interest rate schemes to encourage households to buy and install energy saving devices. Among the banks, only Nouvobanq revealed that it has funded such a project for a company and not a household.

Under the ‘SEREP’ (Seychelles Energy-Efficiency and Renewable Energy Programme) and ‘Rebate’ schemes,  commercial banks have agreed to provide loans for the purchase and installation of energy-efficient home appliances, lighting consumables and solar water heaters in the domestic residential sector at preferential borrowing rates, thus making them more attractive.

To enhance the credit risk cover and help the banks lower their interest rates, the government provides a subsidy and offers a guarantee of up to 50% of the loan amount to individual borrowers. The incentive is also extended in the form of concessions to importers as there are neither customs duties nor Value Added Tax (Vat) on the importation of photovoltaic systems and other renewable energy devices.

The loan facility under the schemes is limited to R100,000 per household and should be used exclusively for the purchase and installation of energy efficient home appliances. Applicants have to make only a 2.5 percent contribution.

Minister Laporte has proposed that the Seychelles Energy Commission and the commercial banks get together to more aggressively market the schemes. It was felt that it is also necessary to create more awareness on the credit facilities and educate the public more on renewable energy. Some were even of the opinion that it should become compulsory for new houses to have solar water heaters and to harvest rain water.

Other issues discussed at the meeting were the foreign exchange rates which money changers feel remain practically unchanged despite appreciation or depreciation and the delay customers still face in cheque clearing. While another central clearing system is needed for foreign exchange, it was voiced that bounced cheques remain a concern.

One bank manager pointed out that even if the bank closes the account of fraudsters, they still issue cheques as they refuse to return the cheque book to the bank.

It is generally felt that more measures should be taken such as preventing a culprit from opening a fresh account in any local bank, and creating a centralised database with a black list of bad payers. As issuing of cheques without provision is a criminal offence punishable by law, those found guilty have also to be severely punished in order to send the right message around. At the same time, the court system has to improve and the establishment of a financial tribunal or commercial court would be of great help in solving the problem.

Ultimately, it was agreed that the Central Bank of Seychelles has to relook at some of its procedures including some bank regulations which must be amended.

The meeting in progress

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