The Ministry of Finance has opted against granting a government sovereign guarantee for a USD 165 million (MVR 2.5 billion) loan intended for the development of a resort by renowned businessman and People's Majlis member for Meedhoo, Ahmed Siyam Mohamed.
According to 'Mihaaru', this decision was reached by the Finance Ministry earlier this week.
Siyam, leader of the Maldives Development Alliance (MDA), had sought government financial assistance through a loan to develop The Emerald Lagoon in Male' Atoll into a resort with a capacity of 1,500 beds. The estimated cost for this project is USD 165 million (MVR 2.5 billion).
Documents obtained by 'Mihaaru' reveal that negotiations were conducted with China's Shanghai Construction Group to undertake the development of The Emerald Lagoon. However, the loan required a guarantee from the Maldivian government to be provided by a Chinese bank.
The initial agreement for a sovereign guarantee was made in January 2018 during former President Abdulla Yameen's administration. Nonetheless, a letter from the current government is necessary to proceed with the guarantee.
Ahmed Siyam Holding (ASH), Siyam's company, previously secured a USD 127 million loan from China's Exim Bank in 2017, backed by a government sovereign guarantee. This loan was for the development of Irufen Resort in N. Dhigurah. Repayment difficulties arose during the COVID-19 pandemic, but the delayed payments were eventually settled.
The decision not to provide a guarantee for Siyam's latest loan request comes amid financial challenges faced by the state, marked by rising public debt. State debt is projected to reach MVR 129 billion, with the highest expenditure for debt repayment expected in 2026, amounting to MVR 15 billion.
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