A decision is expected today on plans for Guernsey to lend Sark £1.5million.

If the States of Guernsey agree to a proposal from Policy and Resources, it will lend the smaller island’s government the money. That in turn will give financial backing to those who want to buy Sark Electricity Limited, with long term plans to put the island’s power into the community’s hands.

Chief Pleas doesn’t have the money to buy SEL outright though – nor to carry out any essential maintenance to the island’s grid that might be needed imminently.

There could also be a legal battle over the planned purchase, with the owner of SEL saying the price Chief Pleas wants to pay is vastly under what it is actually worth.

Pictured: Deputy Lyndon Trott.

P&R, led by Deputy Lyndon Trott, was formally approached by Conseiller John Guille, on behalf of Sark’s Policy and Finance Committee earlier this year.

He asked if Guernsey could lend Sark £1.5m with the agreed terms having already been discussed between the two governments.

Conseiller Guille said the terms would include an assurance by Sark that the money would be repaid, and if Sark defaults on any payments then its ‘impôt’ (duties owed on alcohol and tobacco products which Guernsey collects for Sark and then pays to it) can be withheld.

Sark will also have to agree to a review of its tax systems, which Guernsey will be able to see, and the smaller island will have to participate in a new Bailiwick Commission that Guernsey wants to set up to formalise its relationships with both Sark and Alderney.

If the States of Guernsey do approve the loan today, Chief Pleas will ratify it at their next meeting which is due to take place on Wednesday 30 April before progressing with plans to try and buy SEL.

Conseiller Guille has agreed in principal with Deputy Trott that if the loan is agreed, then the money will be spent securing Sark’s future.

There is some opposition to the plans, though.

SEL has been valued at just under half a million pounds, but the owner doesn’t want to sell so compulsory purchase may be the end result.

Alan Witney Price has also said SEL has been vastly undervalued and that it’s worth far more than what has been suggested.

Sark Conseiller Christopher Kennedy-Barnard has warned that even if the loan is agreed, it does not mean that the purchase of SEL will go through.

“Expectations should be grounded in logical thinking,” he wrote in a recent column for Express. “I could envisage a lengthy legal battle between Sark’s government and SEL, with potentially only the lawyers being the victors. Sark can ill afford to be in protracted litigation with an uncertain conclusion. The whole situation presents a huge risk.”