OPEC Fund lends US$50m for new airport terminal

The government signed Sunday a US$50 million loan agreement with the OPEC Fund for International Development to finance the expansion of the Ibrahim Nasir International Airport.

According to the finance ministry, the loan will fund the development of a new passenger terminal by the Saudi Binladin group. The project was awarded to the Saudi construction giant last May for an undisclosed amount.

OFID Director-General Suleiman Jasir Al-Herbish signed the loan agreement at a ceremony at the Hotel Jen this morning. Finance Minister Ahmed Munawar signed on behalf of the government.

Munawar said the loan is “semi-concessional” to be repaid in 14 years after a four-year grace period. He did not disclose the interest rate.

Munawar also told reporters after the ceremony that OFID has also agreed to grant a further US$50 million loan for the airport expansion project. The first loan was approved in September.

He noted that water and sanitation projects worth US$50 million are presently ongoing with OFID loan assistance. The OPEC Fund has also pledged funds for a project to convert the Equatorial Convention Centre in Addu City to a 100-bed hospital, he added.

The government previously secured a US$100 million concessional loan from the Saudi Fund for Development for the airport expansion. An agreement was signed with the Kuwait Fund in early August for a concessional loan worth US$50 million with a maturity of 20 years.

President Abdulla Yameen unveiled the ambitious plan to develop the airport with US$800 million worth of foreign loans last April. The airport will be able to cater to more than seven million passengers by 2018, the project’s estimated date of completion, he said.

The government also obtained a US$373 million concessionary loan from the Chinese EXIM Bank and enlisted China’s Beijing Urban Construction Group to build a new 3.2-kilometre runway, a fuel farm, and a cargo complex.

Since assuming office in November 2013, Yameen’s administration has sought development funding from China and Saudi Arabia amid persisting criticism of human rights abuses from Western powers.

In September last year, the Saudi Fund for Development also granted a US$80 million loan to finance infrastructure development projects in the reclaimed artificial island of Hulhumalé.