Govt rejects MVR 2 billion sovereign guarantee to resort tycoon Siyam

Government has denied a request by businessman Ahmed Siyam Mohammed for a sovereign guarantee to secure a loan for the development of a resort in the Male Atoll.

On April 7, Siyam wrote a letter to President Mohamed Muizzu seeking a sovereign guarantee to finance the development of a resort in the area allotted to his company named Emerald Resorts Private Limited.

However, reliable sources confirmed to Atoll Times on Tuesday that the cabinet had last week decided to deny the request. 

In the letter, Siyam said he had been trying to secure financing for the resort development at Emerald Lagoon for years and that the project, which would have more than 1,500 rooms, required USD 165 million (MVR 2 billion).

Referring to the government's policy for sovereign guarantee to private parties about how loans taken at less than 4% interest can be guaranteed by the states sovereign guarantee, Siyam wrote:

The letter noted that the then government had considered issuing a sovereign guarantee to raise the funds needed to implement the project, via a letter sent in January 2018, which was also attached with Siyam’s letter.

In 2017, the government gave Siyam a sovereign guarantee for a $127 million loan taken from China's EXIM Bank to build a resort called Siyam World.

Siyam is now repaying the loan despite difficulties during the Covid-19 pandemic.