Abu Dhabi fund allocates $17m to Seychelles renewable projects

The Indian Ocean state has set a renewable energy target of 5 per cent by 2020

Seychelles' tourism revenues are not enough to fund its energy import bill and meet renewables targets. Courtesy Kalpana Sunder

Abu Dhabi Fund for Development, the UAE’s government-backed development aid entity, has allocated Dh64.2 million ($17.4m) towards two renewable energy projects in the Seychelles, it said in a statement on Monday.

Around Dh31.2m of the aid will be dedicated to an upcoming solar farm developed by Abu Dhabi clean energy company Masdar in the artificially-built island of Romainville, while the remainder will be channelled as investment for a 33 kilovolt power grid to be built in Mahe.

"These projects are focused on strategic sectors that promote sustainable economic development in the Seychelles including housing, telecommunications, transport and energy," said ADFD director general Mohammed Al Suwaidi.

He added that around Dh399m had been spent in financing development projects across the Seychelles so far.

An archipelago in the Indian Ocean to the East of Africa, Seychelles meets nearly all of its energy needs through crude imports.

To lower imports that have added to the high cost of electricity and transportation, the government announced an energy policy to produce around 5 and 15 per cent of its energy from renewables by 2020 and 2030 respectively.

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Seychelles' remote location and dependence on tourism revenues has increased the importance of development aid to finance energy projects.

Financing for the Romainville solar farm project is part of the fourth funding cycle of a project facility launched by ADFD and Abu Dhabi-headquartered International Renewable Energy Agency.

The 5 megawatt project could benefit as many as 90,000 people and would include storage batteries “to help stabilise electricity prices and reduce dependence on biofuels,” said the fund.

The 33kv power project will be built on the island of Mahe - the largest in the archipelago. A 12.5km line will be constructed alongside two feed stations to strengthen the transmission network in the northern areas of the island.

ADFD’s funding will meet 90 per cent of the project cost, which is estimated to be around $10.5m. Electricity demand growth from commercial, residential and tourism entities on the island will be supported by this power project.