National Assembly approves new law to govern electricity sector |30 March 2023

The electricity sector will soon be governed by a new law and a new utilities regulator, following the approval of the Electricity Bill, as amended, by the National Assembly yesterday.

The Bill which was approved by cabinet in November 2022 is also endorsed by the World Bank, and seeks to modernise and provide guidance on how the electricity sector will be managed in an equitable and transparent manner, and how to bring about more clarity in the sector.

The Bill makes provisions for other companies to enter the market and engage in energy production, supporting Seychelles’ energy strategy.

It will also ensure that there is no duplication of roles among actors within the sector, and that the sector is regulated, with the Public Utilities Corporation (PUC) clear on its role as a participant in the sector.

According to the Minister for Agriculture, Climate Change and Environment, Flavien Joubert, stakeholders have been extensively consulted, including those who will be most impacted by the law.

“Under this law, all participants in the electricity sector will have to be issued a licence to manage any activities related to the generation, transmission, distribution and sale of electricity. Licensed participants will have to comply with the conditions and regulations of the law, otherwise, they will have committed an offence under the new law.”

“The new law will establish the procedures for electricity generation and how it will be procured in a transparent and equitable manner,” he noted.

Additionally, the legal framework will establish the principles for electricity tariffs and procedures on how electricity tariffs are to be set and reviewed.

The law will also give the minister powers to make regulations for the sector, also serving to repeal certain regulations under the PUC Act.

There are presently two laws which cover the electricity sector, the Public Utilities Corporation Act and the Energy Act.

Provisions for the Utilities Regulatory Commission will be discussed by the National Assembly in due time. The commission will replace the Energy Commission.

Leader of government business Bernard Georges applauded the law as one which will serve to ease some pressure off the PUC. It is essential that Seychelles moves away from the production of energy using heavy fuels at a high cost and to the detriment of the environment, to a greener, environmentally-friendly way as permitted by the Bill.

Linyon Demokratik Seselwa (LDS) member for Beau Vallon, John Hoareau, said the law supports Seychelles’ efforts to achieve its renewable energy targets of reaching 25 percent by 2030.

“Along those lines, we have signed a memorandum of understanding (MoU) with China to a value of US $4.7 million, to install solar PVs on all school institutions in Seychelles, and transform one of our islands to become entirely dependent on solar energy,” Hon. Hoareau stated, affording his support for the Bill.

Similarly, Hon. Georges Romain said one of the important provisions is the possibility for other private actors to engage in electricity production and to be able to sell it on to the PUC, to the benefit of local consumers.

Private investors are able to take risks and have access to capital which government lacks to develop the sector, Hon. Romain added.

Leader of the opposition in the National Assembly, Hon. Sebastien Pillay, expressed concerns over the fact that the Bill providing for the regulator, who he said has but an advisory role to the minister, is not being considered at the same time.

While he praised certain provisions of the law which allow individuals and businesses to generate their own electricity, he also questioned whether government is abandoning the responsibility of ensuring that electricity tariffs do not become unaffordable.

Hon. Pillay said he wants to avoid any situations whereby consumers cannot afford electricity or where employees lose their jobs.

“From what I am observing, the minister has all the main roles under the law,” Hon. Pillay stated, proposing more consultations should have been held with the legislative branch of government.

For his part, United Seychelles (US) representative Wallace Cosgrow pointed out that the PUC has had a “monopoly” over the production and distribution of the electricity in Seychelles for numerous years, and that he hopes that deregulation does not have any negative implications on consumers.

In concluding, Minister Joubert noted that the minister will be advised by the commission in taking decisions and that it would not be in the interest of any actors that tariffs are set unusually high.

Independent producers must not be reliant on conventional methods that are fuel and coal based, he added.

The Assembly took quite some time during Tuesday's session, and half the session yesterday going over the amendments to the different clauses.

In the end, seventeen members voted to approve the Bill. None voted against and eight abstained.

Laura Pillay