PUC revises utility tariffs effective January 15, 2024 |05 January 2024
Guests touring a newly opened sub station service centre at Anse Royale late last year. PUC has said that the tariff revision would allow the company to continue upgrade its infrastructure across the country
The Public Utilities Corporation (PUC) has announced an increase in water, electricity and sewerage tariffs effective January 2024.
Water and sewage tariffs will increase by 9.2 percent and electricity tariffs will gradually rise to an 8.4 percent by year-end, starting with an overall increase of 60 cents on January 15.
This increase comprises 49 cents due to fuel price variations and 11 cents reflecting a 2.5 percent rise in average electricity tariffs.
This was announced by chief executive, Joel Valmont, in a press conference yesterday morning at the PUC Electricity House.
He explained that the tariff revision would allow the company to continue upgrade its infrastructure across Mahé, Praslin and La Digue.
Mr Valmont noted that in the last five years (2018-2022), the PUC invested around R2.2 billion in enhancing electricity, water, and sewage systems. This investment was founded partially by loans and the rest from PUC equity, government grants, and private contributions, significant improving services without tariff hikes for four years.
“This comes after a reflection that we did, together with the government, to address the financial situation of PUC, medium to long term. We need to implement new tariffs to continue to progress with our infrastructure plans and other factors that have a rising cost which PUC is suffering from,” he stated.
However, to acquire funds for infrastructure development, the PUC secured concessionary loans of R1.6 billion rupees through the Seychelles Government.
“These funds supported various projects, such as the 33Kv South Mahé Project, improved water security from the La Gogue Dam, and ongoing constructions of La Digue’s wastewater network and Mahé’s wastewater refurbishment.”
To strengthen critical infrastructure and ensure water resource availability during dam construction, the PUC expanded the Providence desalination plant through a R159 million loan from Nouvobanq in 2019. Additionally, a 5MW PV farm was established through a US $9 million loan from the Abu Dhabi Fund for Development, with PUC managing loan repayments without raising tariffs.
Moreover, it was discussed that to enhance power generation reliability on Mahé and Praslin islands, projects to expand generation capacity were initiated. The Mahé project, financed by a €21.5 million loan from Nouvobanq, began late last year. The Praslin project, expected to cost around €13 million, is set for contract award in early 2024.
Despite the financial challenges, the PUC is dedicated to modernising infrastructure for reliable electricity, water, and wastewater services across islands aiming for sustainability. Therefore, looking ahead, about R6.80 billion will be needed over the next decade (2023-2032) to upgrade infrastructure and meet growing demand.
Also present at the press conference was the commercial director at the Seychelles Petroleum company, Xerxes Pardiwalla, who gave an overall view of fuel prices in the past months.
He noted there was high prices at the pump in the last quarter of 2023, as fuel prices reached R22.58 for normal gas and R23.70 for diesel. However, the prices gradually came down. They currently sit at R21.32 and R22.6 respectively.
“This movement is an exact reflection of what is happening on the international market. If you look at July moving into August and September, the prices were picking up every month, this peaked at the end of September at $95 per barrel. From there, the prices have been coming down, in December we reached levels below $80 per barrel. That is currently where we sit right now.”
He conveyed that there is no real way of knowing if this trend will continue, however, moving through January, the cargoes that will be moved through have been priced since December. “We expect to see a reflection of December prices which of course were cheaper than October, and November. This means that there will be a reduction on the product cost which will benefit the public.”
Sunny Esparon/PUC press release
