The government has decided not to grant a sovereign guarantee for the USD 165 million resort development loan sought by Meedhoo MP Ahmed Siyam Mohamed.

The Ministry of Finance did not officially announce the government's decision.

However, reliable sources told Adhadhu today that Siyam had been informed last week that the sovereign guarantee he had requested could not be granted.

"It was decided in consultation with President [Dr. Mohamed] Muizzu," the source said.

The source added that the decision was taken because of the poor financial situation of the state.

Adhadhu obtained a letter sent from the tycoon in his capacity as owner of Emerald Resorts to President Dr. Mohamed Muizzu on April 7, 2024.

According to the letter, terms have been negotiated with China's Shanghai Construction Group to develop the Emerald Lagoon in the southern edge of Male' atoll. The loan was to be taken from a Chinese bank.

But the loan needed for the estimated USD 165 million project could only be obtained with a sovereign guarantee from the Maldives government, Siyam's letter stated. The lending bank required written confirmation of the sovereign guarantee from the government, it added.

The resort to be developed in Emerald Lagoon would have more than 1,500 rooms, according to Siyam's letter.

In January 2018, former President Abdulla Yameen's government issued a sovereign guarantee to a company owned by Siyam to obtain a loan for the project. However, a new document was needed to show that there was no objection from the current government.

Siyam decided to support President Muizzu for the second round of the presidential election after forming a coalition with the Maldivian Democratic Party (MDP) to back former President Ibrahim Mohamed Solih in the first round.