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

Abu Dhabi fund allocates $17m to Seychelles renewable projects



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.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The five pillars of Islam
The five pillars of Islam

1. Fasting

2. Prayer

3. Hajj

4. Shahada

5. Zakat 

MATCH INFO

Uefa Champions League semi-finals, first leg
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When: April 24, 10.45pm kick-off (UAE)
Where: Anfield, Liverpool
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Second leg: May 2, Stadio Olimpico, Rome

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

Edinburgh: November 4 (unchanged)

Bahrain: November 15 (from September 15); second daily service from January 1

Kuwait: November 15 (from September 16)

Mumbai: January 1 (from October 27)

Ahmedabad: January 1 (from October 27)

Colombo: January 2 (from January 1)

Muscat: March 1 (from December 1)

Lyon: March 1 (from December 1)

Bologna: March 1 (from December 1)

Source: Emirates


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