Seychelles signs early repayment of debt agreement with the UK |19 October 2020

PS Thesee and HC Lynch exchanging documents after signing the agreement (Photo source: department of Finance)

An agreement on the early repayment of the debt of the government of the Republic of Seychelles to the government of the United Kingdom of Great Britain and the Northern Ireland was signed on Thursday at Liberty House.

The agreement was signed on behalf of the government of Seychelles by the principal secretary for Finance, Damien Thesee, and the British high commissioner to Seychelles, Patrick Lynch.

On February 25, 2015 the government of Seychelles together with the government of the United Kingdom, agreed on an early repayment of the debt of the Republic of Seychelles in order to implement recommendations of the Paris Club Agreement.

The agreement was part of the debt restructuring reform implemented whereby Seychelles committed to make early debt repayment to its Paris Club creditors including South Africa.

The early repayment constituted of debt whose maturities fall due between December 2015 and January 2022 under the bilateral agreements between UK and Seychelles. Under this agreement, Seychelles paid GBP 2.02 million and US $562,000 to the government of UK calculated on the basis of the market value of each debt.

The early repayment was part of the debt swap initiative, by which debt was traded for conservations. This arrangement helped to ensure debt relief and sustainable funding for adaptation to climate change. A special trust vehicle, Seychelles’ Conservation and Climate Adaptation Trust (SEYCCAT) supported by The Nature Conservancy (TNC) purchased the debts at a sustainable discount, which facilitated the funding of the special purpose trust.

This agreement was initially due to be signed between the Minister for Finance and the British high commissioner, but was postponed at the end of 2019 to accommodate upcoming budget.

This agreement followed extensive works carried out in collaboration with the Ministry of Environment, Energy and Climate Change and the Ministry responsible for Finance, which government approved for the debt swap initiative which was proposed at the World Summit on Sustainable Development or Rio +20 in June 2012.

Press release from the department of Finance