Govt guarantees HDC's MVR 200m loan

Government has issued a sovereign guarantee to the Housing Development Corporation (HDC) for a MVR 200 million loan from Habib Bank.

This decision was detailed in a letter from the Finance Ministry to the Parliament's Finance Committee.

The loan, obtained by HDC, aims to secure advance financing for the second phase of the beach protection project at K. Thilafushi.

Previously, HDC had taken out a government-guaranteed loan of MVR 200 million from the Islamic Bank last year.

The move has drawn criticism from opposition members within the Finance Committee.

Hulhumale South MP Ahmed Shamheed questioned the government's decision, emphasising that while the loan is guaranteed for beach protection work, other projects related to public needs have not secured financing.

Responding to these concerns, Hithadhoo Central MP Ahmed Azaan explained that the government's guarantee was necessary due to the company's reduced asset base, which he attributed to decisions made during the previous administration. Azaan stated that the company no longer has sufficient assets to secure a loan independently, making a government guarantee essential.

Azaan further clarified that the MVR 200 million loan would support both the beach protection efforts and land dredging activities, addressing ongoing development needs in the area.

In a related development, the government recently provided a sovereign guarantee to the Fund Management Corporation for a loan of MVR 231 million. This financing is intended to initiate the internet submarine cable service, a project undertaken by the Maldivian government in collaboration with Indian billionaire Mukesh Ambani’s Reliance Jio.