Maldives borrows US$30mn from HSBC

Sumith Arangala, Chief Executive Officer, LVL Energy Fund (left) handing over the agreement to Nanda Fernando, Managing Director, Sampath Bank

Sept 25, 2007 (AFP) – The Maldivian government has secured a 30 million dollar commercial loan from the global banking giant HSBC to rebuild harbours, a senior minister said Tuesday. The money will be used to repair jetties damaged by the December 2004 tsunami that cost the atoll nation nearly two thirds of gross domestic product (GDP), Finance Minister Gasim Ibrahim said.

The tsunami damaged 20 islands — a 10th of the 200 inhabited islands in the Maldives. Almost a third of the country’s 369,000 Sunni Muslims were also directly affected by the destructive waves.

“We got about 400 million dollars in international aid, but we are still short of about 70 to 80 million dollars to complete projects related to fishing and transport,” Ibrahim told AFP by telephone from the capital island Male.

Maldives imports virtually everything ranging from oil to timber and Ibrahim said the post-tsunami phase is facing cost overruns.

The eight-year loan from HSBC carries an interest rate of 2.25 percent over the London Interbank Offered Rate, or LIBOR, he said.

In 2002, the government borrowed 10 million dollars from HSBC to finance the nation’s second international airport on