Maldives: MLD: EQUITY INVESTMENT AND LOAN TO THE HOUSING DEVELOPMENT FINANCE CORPORATION

Nonsovereign Project | 41914-014

Summary

The project consists of a loan of up to $7.5 million to, and an equity investment of up to$4.5 million in the Housing Development Finance Corporation (HDFC) located in the Maldives. HDFC is a specialized finance institution that was established to mobilize long-term financing for the provision of mortgage financing for affordable homes.

Latest Project Documents

Title Document Date
Housing Development Finance Corporation Mar 2008

Consulting Notices

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Project Name MLD: EQUITY INVESTMENT AND LOAN TO THE HOUSING DEVELOPMENT FINANCE CORPORATION
Project Number 41914-014
Borrower/Company HOUSING DEVELOPMENT FINANCE CORPORATION PLC
Country Maldives
Location Maldives
Approval Number 7274, 7274/2418
Type or Modality of Assistance
7274 Equity USD 4.50 million Committed
7274/2418 Loan USD 7.50 million Committed
Strategic Agendas
Drivers of Change
Sector / Subsector Finance - Housing finance
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Private Sector Financial Institutions Division
Responsible ADB Officer Asif Cheema
Project Sponsor(s)
Description The project consists of a loan of up to $7.5 million to, and an equity investment of up to$4.5 million in the Housing Development Finance Corporation (HDFC) located in the Maldives. HDFC is a specialized finance institution that was established to mobilize long-term financing for the provision of mortgage financing for affordable homes.
Objectives and Scope The loan will enable HDFC to further expand its activities by providing access to long-term funding that is necessary for providing long-term mortgages. The equity investment will support the government's privatization plan for HDFC and will lead to a more efficient mortgage finance company.
Linkage to Country/Regional Strategy The Project addresses some of the key concerns highlighted by the CPS (2007-2011). First, it increases private sector participation in the economy through the privatization of HDFC. Second, it will help alleviate some of the Government's fiscal burden, as the Government can no longer provide funding for HDFC. Third, the financial sector will be strengthened through the expansion of HDFC operations. Fourth, the TA will strengthen HDFC's institutional capacity. Finally, and most importantly, the Project will address the chronic shortage of housing.
Safeguard Categories
Environment FI
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The loan is assigned a classification of FI for environment and category C for indigenous people and resettlement. As per ADB's Environment Policy (2002), HDFC will be required to establish an environmental management system and resettlement framework, within a time frame to be specified and setting out detailed screening and assessment mechanisms. ADB will review and approve the developed environmental management system. Further, HDFC will build capacity for implementing the system in accordance with its specific business needs and with ADB assistance, and will send at least one HDFC officer to ADB-sponsored environmental management training.

With respect to the poverty analysis impact of the project, the project has been assigned a classification of GI. The Project will indirectly contribute to poverty reduction by supporting private sector growth and promoting mortgage financing in the Maldives. The social impact of the Project is high. The provision of mortgage lendilig will enable a broad spectrum of Maldivian society access to housing. Moreover, mortgage lending enables a country to generate multiple sources of employment in the construction and real estate industries

Involuntary Resettlement The loan is assigned a classification of category C for resettlement.
Indigenous Peoples The loan is assigned a classification of category C for indigenous people.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 18 Apr 2007
Due Diligence 22 Apr 2007
Credit Committee Meeting 11 Mar 2008
Approval 09 Apr 2008
PDS Creation Date 25 Oct 2007
Last PDS Update 30 Sep 2014
Title Document Type Document Date
Housing Development Finance Corporation Reports and Recommendations of the President Mar 2008

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


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