The International Finance Corporation (IFC), a sister organization to the World Bank, signed an agreement with John Keells Holdings (JKH) for a USD 175 million long-term investment to expand and refurbish hotels in Maldives and Sri Lanka.
As it stands, the investment is IFC's largest in Maldives within the last decade, and is Sri Lanka's largest project facilitated by IFC, within the last 50 years.
According to JKH's Chairman and CEO, Krishan Balendra, "Sri Lanka's growth prospects in the medium to long-term remain positive", further noting the company's strength and resilience to move forward "despite the current period of unprecedented challenges".
"Partnering with an international reputed financial institution such as IFC, particularly at this juncture of time, is a vote of confidence for JKH and the country", said the CEO.
The project also aims to boost the supply of "green" hotels in Maldives, adopting IFC’s 'EDGE' green buildings standards for its newly refurbished hotels in Maldives. The project intends to demonstrate the building standards to other hotel operators.
In addition to the expansion of the tourism sector, IFC will also invest in JKH's supermarket chain. With both countries relying on the tourism dollar, the move will reportedly create direct and indirect jobs and generate foreign exchange.
IFC's investments will establish 100 additional supermarkets in Sri Lanka, prioritizing less developed regions within the country.
“IFC support will enable JKH, as one of the largest and most reputable businesses in Sri Lanka, to continue to invest, and ultimately create more jobs and work for small and medium sized businesses", said IFC Country Manager for Sri Lanka and Maldives, Amena Arif.
Moreover, she said the investment will send a "positive message" to the investor community, proving that capital investments in Sri Lanka and Maldives are a viable option and such investments are vital to help economies build resilience for the future.
The travel restrictions, implemented as part of Maldives' response to contain the spread of the novel coronavirus, have left the country vulnerable to severe economic impacts. In mid-April, the World Bank projected that Maldives would be the worst-hit economy in the South Asian region due to the COVID-19 pandemic.
Heavily reliant on tourism for revenue, with the industry momentarily grounded to a halt, Maldives estimates a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency, while the projected state deficit would reach MVR 13 billion this year.