Completed Mixed AidData Chinese Aid

China Eximbank provides $127.5 million buyer's credit loan for Irufen Island Resort Project

$127.5M USD

Funder	Export-Import Bank of China (China Eximbank)
Recipient Organization	Ahmed Siyam Holdings Private Limited
Country	Maldives
Start Date	Dec 14, 2017
End Date	Jun 20, 2027
Duration	3,475 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`54281`

Grant Description

China Eximbank provides $127.5 million buyer's credit loan for Irufen Island Resort Project On December 14, 2017, the Export-Import Bank of China signed a $127.5 million buyer's credit loan agreement with Ahmed Siyam Holdings Pvt Ltd for the Irufen Island Resort Project (or Iru Fen Island Resort Project).

📋 Loan / Grant Terms

💰 Loan Amountinclude a 12

📅 Maturity12.832 years

⏳ Grace Period2 years

💹 Interest Rate4.7492%

The Government of Maldives issued a sovereign guarantee in support of the loan.

The proceeds of the loan were to be used by the borrower to partially finance a $150 million 'EPC plus financing' (EPCF or EPC+F) turnkey contract between Maldives Sun Group (an alternative name for Ahmed Siyam Holdings Pvt Ltd) and China Communications Construction Company Limited, which was signed on January 30, 2016.

The scope of the turnkey contract included the design and construction of the Irufen Island Resort.

By the end of September 2018, the loan had achieved a disbursement rate of 32.9% (with $42,061,601 of $127.5 million being disbursed). China Eximbank made loan disbursements to Ahmed Siyam Holdings Pvt Ltd worth $20,715,590 during calendar year 2020.

The loan’s amount outstanding was $106,784,411 as of December 31, 2019, $121,125,000 as of December 31, 2020, $125,055,695 as of December 31, 2021, $95,625,000 as of December 31, 2022, and $82,875,000 as of December 31, 2023.

Ahmed Siyam Holdings Pvt Ltd made loan repayments to China Eximbank worth $6,375,000 during calendar year 2020, no loan repayments to China Eximbank during calendar year 2021, $12,750,000 during calendar year 2022, and $12,750,000 during calendar year 2023.

The purpose of the project was to design and construct the Irufen Island Resort (also known as Sun Siyam Iru Fen Maldives) on the Noonu Atoll, which covers an area of 54 hectares.

The resort was originally planned to feature beach villas, showstopper suites, private pools, restaurants, bars, a world-class spa, wellness and sports facilities, a kids’ village. Its location is close to some of the best dive spots in the region. Upon completion, the resort was expected to become the largest in the Maldives with 509 rooms.

The Financial Times called it 'the biggest resort development deal in Maldivian history.' The resort owner of Ahmed Siyam Holdings Pvt Ltd -- also known as the Maldives Sun Group or Sun Siyam -- is Ahmed Siyam Mohamed, who was the leader of a political party in the ruling coalition of the then-President Abdulla Yameen, and one of the biggest tycoons in the country’s lucrative tourism sector.

CCCC Highway Consultants Co., Ltd. (中交公路规划设计院有限公司) was responsible for project design and China Communications Construction Co., Ltd. (CCCC) was responsible for project implementation. Construction commenced in December 2019. After implementation delays due to COVID-19, the resort opened its doors to guests on October 28, 2021.

The project was originally expected to reach completion in June 2020. It reportedly employed 64 Chinese workers and 1,193 foreign workers. The China Eximbank loan that was issued in support of this project has been a subject of local controversy.

Due to the fact that the Government of the Maldives issued a sovereign guarantee in support of the loan, the private debt contracted by Ahmed Siyam Holdings Pvt Ltd threatened to become a public debt in the event that the Irufen Island Resort Project was insufficiently profitable of the borrower defaulted on its repayment obligations.

Due to economic difficulties resulting from the COVID-19 pandemic, this risk became more obvious in 2020.

Ahmed Siyam Holdings Pvt Ltd failed to meet a $10 million loan repayment obligation that was due to China Eximbank on July 21, 2020.

The next day, China Eximbank warned the Government of the Maldives that, as the ultimate guarantor of the private debt, it was responsible for the loan repayment obligations of Ahmed Siyam Holdings Pvt Ltd., and failing to meet these obligations would result in a sovereign default, thereby jeopardizing the country’s international credit ratings and its macroeconomic stability.

This issue was ultimately resolved when the Maldivian government threatened to exercise its mortgage rights if Ahmed Siyam Holdings Pvt Ltd did not deposit the overdue payment in an escrow account within five business days.

Then, in 2021, the borrower made no loan repayments to China Eximbank (despite the fact that the loan's grace period had expired).

In April 2024, Ahmed Siyam Mohamed requested that the Maldivian Government approve a second sovereign guarantee for another Chinese loan (reportedly worth $165 million) to develop 'Emerald Lagoon Resort' in Kaafu Atoll with Shanghai Construction Group (SCG).

📋 Staff Comments

This project is sometimes called the Sun Siyam Iru Fen Maldives Resort Project.
The Chinese project title is 马尔代夫IRUFEN度假酒店项目.
Given that the loan was denominated in USD, provided to a foreign recipient (borrower), and used to partially fund a commercial contract with a Chinese company, AidData assumes that it was issued as export buyer's credit.
Given that the loan was issued on December 14, 2017 and the first known loan repayment took place in 2020, the loan's implied grace period is approximately 2-years. For the time being, AidData relies on the grace period (2.22-years) that is identified in the World Bank's Debtor Reporting System (DRS) as the average grace on Chinese loans to the Maldivian state-owned entities in 2017. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=05. For the time being, AidData relies on the interest rate (4.7492%) that is identified in the World Bank's Debtor Reporting System (DRS) as the average interest rate on Chinese loans to the Maldivian state-owned entities in 2017. See https://www.dropbox.com/s/ab8qt4n6jijcbhd/IDS_Average%20interest%20on%20new%20external%20debt%20commitments.xlsx?dl=06. For the time being, AidData relies on the maturity (12.832-years) that is identified in the World Bank's Debtor Reporting System (DRS) as the average maturity length of Chinese loans to the Maldivian state-owned entities in 2017. See https://www.dropbox.com/s/949n5rctiue6d7c/IDS_Average_grace_period_and_maturity_on_new_external_debt_commitments.xlsx?dl=07. 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.pdf8. The borrowing institution is also known as Ahmed Siyam Holdings Private Limited.
In 2022, the loan’s (principal) amount outstanding as of December 31, 2021 was revised downward -- from $125,055,695 to $108,375,000 -- after 'changes [were] brought to [the] loan account from DSSI and other reconciliations.' See https://www.audit.gov.mv/Uploads/AuditReports/2024/02February/25._Statement_of_Government_Guarantees_2022___Financial_Statement_Audit.pdf10. This loan participated in DSSI with China. AidData acquired the number of loans that were rescheduled in 2020 and 2021 from Maldives' ministry of finance website. While some loans were eligible for DSSI 2020 and DSSI 2021 rescheduling, some loans' payments were only suspended in 2021.

📚 Sources & References

The Maldives counts the cost of its debts to China
ESTABLISHMENT OF JOINT VENTURES WITH CCCG OVERSEAS REAL ESTATE
H.E. Ambassador Mr. Wang Fukang Attends the Signing Ceremony between CCCC and Maldives Sun Group
H.E. Ambassador Mr. Wang Fukang Attends the Signing Ceremony between CCCC and Maldives Sun Group
五、马尔代夫与中国的经贸合作
Sun Siyam Iru Fen Maldives to welcome guests in early 2020
公规院与四公局联合开发的马尔代夫酒店项目签约
中交四公局国际工程分公司马尔代夫IRUFEN 度假酒店项目招标公告
国际分公司马代酒店项目收到马尔代夫政府感谢函
马尔代夫IRUFEN 度假酒店设计施工总承包工作（EPC+F）, [Project Frontline] Peng Dapeng
Deputy General Manager of Overseas Business Department of CCCC , led his team to Maldives hotel for inspection and guidance
防疫生产两不误！中交集团海外项目复工复产
Government Guaranteed Debt
Government of Maldives Active Sovereign Guaranteed Debt as at end June 2019
Ahmed Siyam Holdings pays off sovereign loan to EXIM Bank: Finance Ministry
Sun denies money laundering allegations
STATEMENT OF GOVERENMENT GUARANTEES FINANCIAL YEAR 2018
China debt trap fear haunts Maldives government, siyam world opened
Statement of Government Guarantees Financial Year 2020
No possibility of sovereign default: Finance Minister
Ahmed Siyam Holdings pays off sovereign loan to EXIM Bank: Finance Ministry
Siyam's Company paying off sovereign loan to Exim Bank: Finance Ministry
PUBLIC DEBT BULLETIN ISSUE 5
June 2020
Fear of Chinese debt trap haunts government of Maldives
Marcia R. Song
Associate
Overview
Ahmed Siyam Holdings private limited ah kureege sarukaarun 2017 gai dhookoffaivaa sovereign guarantee aa gulhey
Maldives Public Expenditure Review
Previous administration gave sovereign guarantees worth US$1.3 billion
Government ordered to pay off USD 10 mln from MP Siyam's loan
Former govt granted USD 127 mil in sovereign guarantee to local company
Statement of Government Guarantees Financial Year 2021
Statement of Government Guarantees Financial Year 2022
Company List
Sun Siyam requests USD 165 million loan guarantee from government
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.