Active Development AidData Chinese Aid

Bank of China provides $19.9 million loan for 2500 Housing Units Project

$19.99M USD

Funder	Bank of China (BOC)
Recipient Organization	Housing Development Corporation Ltd. (HDC)
Country	Maldives
Start Date	Jul 17, 2018
End Date	Apr 11, 2026
Duration	2,825 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`54276`

Grant Description

Bank of China provides $19.9 million loan for 2500 Housing Units Project On July 17, 2018, Bank of China (London Branch) and the Housing Development Corporation (HDC) signed a $19,985,550 loan agreement for Phase II of the 2500 Housing Units in Hulhumale’ Project.

📋 Loan / Grant Terms

💰 Loan Amountcarries the following borrowing terms: a 5-year maturity

📅 Maturity5 years

⏳ Grace Period2 years

The Government of the Maldives issued a sovereign guarantee for the loan.

The borrower was expected to use the proceeds of the loan to finance 15% of the cost of a commercial contract between HDC and Sinohydro Group Limited, which was signed on May 28, 2017. The loan was fully disbursed as of March 15, 2019.

Its amount outstanding was $19,985,550 as of December 31, 2019, $19,985,550 as of December 31, 2020, $13,350,347 as of December 31, 2021, $6,715,145 as of December 31, 2022, and $0 as of December 31, 2023.

The borrower made repayments to Bank of China worth $6,635,203 during calendar year 2021 and $6,635,203 during calendar year 2022. In 2023, the borrower fully repaid the outstanding balance of $6,715, 145. The project involves the construction of 2500 housing units in Hulhumale’.

The housing units consist of both two-bedroom units and three-bedroom units, and are being built in 11 15-story and 16-story towers. This project is part of a larger program by HDC to establish 15,000 social housing units in Hulhumale’. Sinohydro Group Limited is the contractor responsible for project implementation.

On March 10, 2020, government officials and Sinohydro Group Limited laid the foundation for the housing project and began construction. The project involves the construction of 2500 housing units in Hulhumale’. The project site is based in Hulhumale’ in the newly reclaimed Phase II. The project area is located on the central eastern area of Phase II.

Locational coordinates are at around 4°13'46.38"N, 73°32'48.92"E (4.22956069961657, 73.54691415337328). The project is part of larger program by HDC to establish 15,000 social housing units in Hulhumale’. Sinohydro Group Limited is the contractor responsible for project implementation.

On March 10, 2020, government officials and Sinohydro Group Limited laid the foundation for the housing project and began construction. However, the project has encountered implementation delays. The originally scheduled project completion date was June 2022.

There also some indications that the Bank of China loan or the 2500 Housing Units Project has underperformed financially and that the borrower (HDC) has had difficulty meeting its repayment obligations to the lender.

On July 18, 2019, HDC entered into a short-term loan agreement with the Maldives Ministry of Finance and Treasury amounting to MVR 37,464,962.45 on July 18, 2019 for the purpose of refinancing the interest payment obligations falling due in the month of July 2019 under the Bank of China loan agreement for the purpose of financing 15% of the total cost of Phase II of the 2500 Housing Units in Hulhumale’ Project.

The disbursement of the loan was made on July 18, 2019.

The loan was obtained for a duration of 12 months, and it was repayable in monthly installments from the date of disbursement; interest was charged and payable on a monthly basis at a rate of 10% per annum.

📋 Staff Comments

The loan repayments were scheduled to commence upon the date falling on the first day after the expiration of the grace period, and principal (and interest on) the loan will thereafter be payable over a period of 3-years in 6 bi-annual, equal, consecutive installments coinciding with each interest period (of 6 months).
This loan may be related to Project ID#54282 and ID#53832. This issue warrants further investigation.
This project is also known as the Hiyaa Housing Project. The Chinese project title is 2500套住房开发项目 or 马尔代夫胡鲁马累1700套房建项目.
The loan repayments were scheduled to commence upon the date falling on the first day after the expiration of the grace period, and the principal of (and interest on) the loan was to thereafter be payable for a period of 3-years in 6 bi-annual, equal, consecutive installments coinciding with each interest period (of 6 months).
Some sources refer to this project as involving the construction of 1,700 housing units — 1,020 three-room apartments of 900 square feet and 680 two-room apartments of 650 square feet — rather than 2,500 housing units. This issue warrants further investigation.
The amounts outstanding and repayments data are drawn from https://www.dropbox.com/s/q82x5hte85kc20e/105._Statement_of_Government_Guarantees_Audit_Report_2021.pdf?dl=0 and https://www.dropbox.com/s/rik8ynrjweat5aw/StatementOfGovernmentGuaranteesFinancialYear2020%20%281%29.pdf?dl=0 and https://www.audit.gov.mv/Uploads/AuditReports/2024/02February/25._Statement_of_Government_Guarantees_2022___Financial_Statement_Audit.pdf7. For loan and debt rescheduling records with variable interest rates, AidData calculates the all-in interest rate at T0 based on the reference rate (such as LIBOR or EURIBOR) on the loan start date, plus any known margin. Please see the methodology for additional details.

📚 Sources & References

Environmental Impact Assessment: Proposed 2500 Housing Units Development Project in Hulhumale' Phase II
Foundation for new housing project laid in reclaimed suburbs
Housing Ministry confuses how Hiyaa Project tenants exceeded 7,000
Government Guaranteed Debt
Government of Maldives Active Sovereign Guaranteed Debt as at end June 2019
Proposed 2500 Housing Units Development Project in Hulhumale’ Phase II
公司签约马尔代夫2500套住房开发项目
Government Guaranteed Loans
HOUSING DEVELOPMENT CORPORATION LIMITED FINANCIAL YEAR 201 9
Statement of Government Guarantees Financial Year 2020, 2500 Social Housing Units In Hulhumale Phase ii-Maldives
Environmental impact assessment proposed 2500 housing units development project in Hulhumale’ Phase II
Registered Foreign Direct Investments
Bank of China declines to lend money to develop housing units in Hulhumale'
Housing Ministry confuses how Hiyaa Project tenants exceeded 7,000
马尔代夫胡鲁马累1700套房建项目开工典礼隆重举行
马尔代夫胡鲁马累1700套房建项目开工典礼隆重举行
公司签约马尔代夫2500套住房开发项目
Statement of Government Guarantees Financial Year 2021
Statement of Government Guarantees Financial Year 2022
SUSTAINABLE ISLAND DEVELOPMENT COLLABORATION
China withdraws offer to finance Sinohydro housing project
Statement of Government Guarantees Audit Report 2023 Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.