Sark seeks £1.5m. States loan to buy electricity infrastructure

Little more than a week after receiving a formal written request, the Policy & Resources Committee has published a proposal for a States debate on the call for a loan.

Sark wants the cash to bring to establish its own electricity infrastructure, but first it has to end a series of disputes with privately-owned Sark Electricity Ltd, which generates and supplies much of the island's electricity.

The States said that electricity had been an ongoing issue for Sark and had also taken up officers’ time in Sark and Guernsey, responding to ‘frequent crises and threats that the supply may be cut off’.

The most recent bid to buy the company went as far as mediation in 2022 but then broke down. The company's current owner has said that an alternative deal is in progress, set to complete by the end of April.

‘The business case does not fit the usual profile of investment decisions by the States, but the investment needs to be viewed on its social, rather than its commercial, merits,’ said P&R.

The committee said that the critical importance of electricity supply and the close relationship between the islands were reasons why Guernsey would look to support Sark, even though there is no formal constitutional responsibility to do so.

‘It might be considered that the situation has reached a point where there is a moral argument for the States of Guernsey to support Chief Pleas, by way of a financial loan, to secure reliable and sustainable provision for energy generation and supply in Sark.’

Sark’s options for securing other sources of funding were limited, the committee said.

The terms being proposed for the loan include Sark participating in P&R’s new proposed ‘Bailiwick Commission’, also including Alderney, to reinforce the relationships of the Bailiwick; that Guernsey uses Sark alcohol, fuel and tobacco duties it collects on Sark’s behalf as security for the loan; and that Sark’s Chief Pleas undertakes a comprehensive review of the island’s taxation regime in the future to ensure that it can support essential capital spending, and the repayment of the loan.