Seychelles President Danny Faure on April 26 2018 signed a financing agreement between the Seychelles Ports Authority (SPA) and the European Investment Bank for the rehabilitation and upgrades to Port Victoria harbour.
Seychelles Port Victoria gets €19.5m of funding for upgrades from EU. Image: Emiel van Leerberghe
Funds pumped into the project include a €12.5 million loan from the European Investment Bank (EIB), a €5 million grant from the EU and France’s memorandum pledging €2 million worth of technical assistance to SPA.
Chairman of the Seychelles Ports Authority Paul Hodoul said the proceeds of the funds will be well spent.
“The new Port Victoria will be the catalyst for greater efficiency, smoother flow of port activities and more mass transportation which can contribute to a lower unit cost of transporting containers. This is expected to help bring down the cost of living in our country,” Hodoul added.
Seychelles’ economy has performed impressively over the past decade, buoyed by tourism and fisheries. The African Development Bank expects the country’s Gross Domestic Product (GDP) to grow by 3.4% in 2018.
The country’s minimal natural endowment and relative isolation has meant that economic activity is limited to a few industries and a small manufacturing sector. Tourism makes up 30% of GDP.
Seychelles' budget for 2018 identified uncertainty about foreign aid as a threat to economic growth. There are fears that aid could start drying up since the reclassification from upper-middle income to Africa’s only high-income country.
EIB Vice-President Ambroise Fayolle said as Seychelles’ largest trading partner the EU’s support for the upgrades were important.
“The EU bank is proud to lend its support to this project, which we expect to have a significant impact on the Seychelles’ economic competitiveness, employment creation and sustainable growth as well as supporting local trade and industry.” Fayolle commented.
France’s technical assistance will come from the French Development Agency, its public development bank.
French Ambassador to the Seychelles Lionel Majesté-Larrouy said that this will be a boost to regional trade. The European territories neighbouring the Seychelles plan to collaborate in developing similar regional routes.
“After financing significant investments in the ports of Mauritius and La Réunion, AFD is proud to be part of this “European Alliance” to fund a key piece of infrastructure in the Seychelles.” Majesté-Larrouy said.
Infrastructure got the biggest chunk of Seychelles’ 2018 budget and was allocate 20% of the overall fiscus. This allocation was complemented with an investment of SR 202m into the fisheries sector.