France has granted a "repayable advance" of €14.2 million to Enercal, the main provider of New Caledonia's electric grid, which is running a chronic budget deficit.
Paris said it granted a "repayable advance" of 1.7 billion Pacific francs (€14.2 million) to Enercal, the main electricity provider of the New Caledonia.
"This exceptional aid will enable the company to ensure its operation and thus allow the supply of electricity in the coming months, while ongoing reforms ensure its sustainable operation," according to France's High Commission to New Caledonia said on Monday.
Enercal, whose principal shareholder is New Caledonia, posted a deficit of 18.9 billion francs (€150 million) on 30 June, according to a financial statement by the local government.
To ensure the continued operations of Enercal, the government of New Caledonia proposed last week an increase in the sale price of kilowatts between October 2024 and September 2026.
State aid package
This bill will be submitted to the Caledonian Congress for examination in the coming weeks.
It also states that the government will cover Enercal's deficits during this transition period and settle the company’s debt between 2026 and 2029.
"This exceptional aid will enable the company to maintain its operations and ensure the supply of electricity in the coming months, while ongoing reforms are adopted to secure its sustainable operation," according to the Outremers360 portal that provides news about France's overseas territories.
The state aid announced on Monday is part of a total package of over 30 billion Pacific francs (€250 million), including 12 billion in the form of a repayable advance, as New Caledonia has been hit by riots that have largely destroyed the island’s economic fabric.
On May 13, massive rioting started against proposed reforms of the island group's electoral body, costing the lives of ten people, including two police officers.
Damage caused by the riots amounted to an estimated €2.2 billion.
(With newswires)
