CDB provides $47.1 million loan for Seaplane Facilities at Velana International Airport (VIA) Project

On July 5, 2018, China Development Bank (CDB) and Maldives Airports Company Limited (MACL) signed a $47,170,000 loan agreement for the Seaplane Facilities at Velana International Airport (VIA) Project. The loan is backed by a sovereign guarantee and it carries the following borrowing terms: a maturity of 13 years, a grace period of 2.5 years, and an interest rate of 6-month LIBOR plus a 2.9% margin. Semiannual repayments were scheduled to take place in twenty-one equal installments, starting in March 2021. The lender expected the borrower to use the revenues from an Airport Development Fee (ADF) to repay the loan. The borrower was expected to use the proceeds of the loan to partially finance a $55.5 million commercial contract between MACL and Beijing Urban Construction Group (BUCG), which was signed on October 25, 2017. The loan had achieved a 100% disbursement rate as of December 31, 2020. According to the Maldives Ministry of Finance, the loan’s amount outstanding was $35,499,675 as of December 31, 2019, $47,170,000 as of December 31, 2020, and $44,370,000 as of December 31, 2021. MACL made loan repayments to CDB worth $11,670,325 during calendar year 2020 and $2,800,000 during calendar year 2021. The purpose of the project was to support the development of the new seaplane terminal at the Velana International Airport (VIA). With a total floor area of 28,000 square meters and complete water facilities, the seaplane terminal was expected to improve tourism service quality and reception capacity of the Maldives and further boost the local economy. Beijing Urban Construction Group (BUCG) was the contractor responsible for project implementation. Construction commenced on January 29, 2018. The new seaplane terminal was opened on November 17, 2019. A seaplane terminal handover ceremony took place on August 4, 2021.

Additional details

1. MACL is the state-owned company that operates Velanaa International Airport (VIA) in Malé. Zhang Fenglin served as BUCG’s Project Director. 2. The Chinese project title is 水上飞机航站楼工程 or 马尔代夫维拉纳国际机场水上飞机航站楼项目. 3. AidData has estimated the all-in interest rate by adding 2.9% to the average 6-month LIBOR rate in July 2018 (2.489%). 4. In its audited financial statement for the year ended 31 December 2020, MACL identifies the weighted average interest rate of the CDB loan as 4.8%. 5. 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 6. Prior to 2022, Maldives previously charged a per-passenger airport service charge (ASC) of $12 for Maldivians and $25 for foreigners departing the country and an airport development fee (ADF) of the same magnitude. Starting on January 1, 2022, the ASC was repealed and replaced with a new departure tax ranging from $12-$120 for Maldivians and $30-$120 for foreigners, depending on the class of travel. The ADF was also increased to the same amounts. 7. The proceeds from the Airport Development Fee and dividends from the state-owned airport operator, MACL, are transferred into the Sovereign Development Fund (SDF) and earmarked for loan repayment. As of end-2022, the SDF Fund amounted to US$415 million

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