55156-001: BML Supporting Recovery Of The Small And Medium ...

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• BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project

Maldives : BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project

Nonsovereign Project | 55156-001

Status: Approved

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The transaction involves a senior secured loan of up to $13,000,000, administration of a $9,000,000 loan from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II), and administration of a $1,000,000 grant from the Private Sector Window (PSW)Asian Development Fund to the Bank of Maldives Plc (BML) for Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project in Maldives.

Latest Project Documents

Title	Date
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Report and Recommendation of the President	Apr 2022
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Gender Action Plan	Apr 2022
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Initial Poverty and Social Analysis	Feb 2022

Project Details

• Project Officer Bahl, Mohit Private Sector Operations Department Request for information
• Approval Date 28 April 2022
• Country/Economy Maldives
• Sector
  • Finance

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Project Name BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project Project Number 55156-001 Borrower / Company

• Bank of Maldives Plc

Country / Economy

• Maldives

Location Nation-wide Type or Modality of Assistance

Approval Number	Facility	Fund Source	Amount	Status
Loan	Japan	USD 20.00 million	Committed
0838	Grant	Asian Development Fund	USD 1.00 million	Committed
4181	Loan	Ordinary capital resources	USD 20.00 million	Approved
8417	Loan	Canadian Climate Fund for the Private Sector in Asia II	USD 9.00 million	Committed

Operational Priorities

• OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
• OP6: Strengthening governance and institutional capacity

Sector / Subsector

• Energy / Energy efficiency and conservation

• Finance / Finance sector development - Small and medium enterprise finance and leasing

Gender Effective gender mainstreaming Project Sponsor(s) Description The transaction involves a senior secured loan of up to $13,000,000, administration of a $9,000,000 loan from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II), and administration of a $1,000,000 grant from the Private Sector Window (PSW)Asian Development Fund to the Bank of Maldives Plc (BML) for Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project in Maldives. Objectives and Scope BML will use the proceeds of ADB's facility to support onlending to tourism corporates and SMEs that are majority owned by Maldivian residents; at least 60% of the proceeds will be onlent to SMEs and 5% to businesses owned by women. To help Maldives pursue sustainable, low-carbon development, the additional concessional loan from CFPS II and grant from the PSW will support onlending to tourism enterprises majority-owned by Maldivians for blue economy projects that promote climate change mitigation and adaptation uses. Linkage to Country/Regional Strategy The project will contribute to the following operational priorities of ADB's Strategy 2030: (i) accelerating progress in gender equality; and (ii) tackling climate change, building climate and disaster resilience, and increasing environment sustainability. The project will help achieve the long-term cofinancing target of 2.5:1, as set out in ADB's Strategy 2030, by mobilizing JICA and OeEB parallel loans. According to ADB's country partnership strategy, 2020-2024, ADB's nonsovereign operations will (i) strengthen competitiveness and diversify the economic base by supporting private sector development, strengthening human development in health and education, and improving the international trade environment; and (ii) improve the quality of life of island communities while ensuring environmental sustainability by investing in clean energy, preservation of the marine environment, climate adaptation, and disaster risk management. The project complements ADB's sovereign-guaranteed operations supporting coastal resilience and increased access to renewable energy and climate change initiatives. The project is aligned with ADB's Climate Change Operational Framework 2017-2030 and the OFI. Private Sector Window

The project aims to address the low uptake of small-scale climate and blue economy initiatives in the Maldives' tourism sector by increasing the affordability of financing for these activities (with a focus on locally owned business and women-owned enterprises). The project aims to increase the adoption of small scale solar and energy efficiency projects as well as encourage investments directed towards conserving, improving, and restoring marine and coastal ecosystems. ADB structured concessional financing to enable the Bank of Maldives to provide loans at a rate that will incentivize tourism business to embark on these projects. Given affordability constraints and lack of access to finance for local businesses in the Maldives, climate projects and blue economy projects undertaken by local businesses would unlikely be viable on a purely commercial basis.

ADB estimated the nominal grant element of PSW support to be 2% of the project cost of $60,000,000. Due to the nature of the grant financing for this project (used to buy down interest rates for end borrowers), ADB assumed the grant would not be recoverable.

ADB sized the PSW grant (blended finance solution) at a level that would incentivize small businesses to borrow from the Bank of Maldives.

Safeguard Categories

Environment FI Involuntary Resettlement FI Indigenous Peoples FI-C

Summary of Environmental and Social Aspects

Environmental Aspects BML's business activities are considered to have minimal site-specific environmental impacts. Involuntary Resettlement Involuntary resettlement screening will include a review of potential displacement impacts on islands designated by the government for tourist development; any such impacts will be managed by the subborrower. Indigenous Peoples Maldives does not have any groups that self-identify as indigenous peoples and, therefore, no impacts on indigenous peoples are anticipated. Stakeholder Communication, Participation, and Consultation The enhanced environmental and social management system (ESMS) will include a framework for BML to adapt the process to ensure wide participation and consultation of potential SME borrowers, particularly female-led SMEs.

Contact

Responsible ADB Officer Bahl, Mohit Responsible ADB Division Private Sector Financial Institutions Division Responsible ADB Department Private Sector Operations Department

Timetable for assistance design, processing, and implementation

Concept Clearance 23 Jul 2021 Credit Committee Meeting - Approval 28 Apr 2022 Last PDS Update 11 Mar 2024

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Title	Document Type	Document Date
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Report and Recommendation of the President	Reports and Recommendations of the President	Apr 2022
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Gender Action Plan	Gender Action Plans	Apr 2022
BML Supporting Recovery of the Small and Medium Enterprise and Blue Economy Tourism Sector Project: Initial Poverty and Social Analysis	Initial Poverty and Social Analysis	Feb 2022

Safeguard Documents See also: Safeguards Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

• 28 Mar 2023 | News Release

  ADB, BML Sign $41 Million Financing Package to Support SMEs and Blue Economy Tourism in Maldives

  ADB signed a $41 million finance package with the Bank of Maldives Plc (BML) to support locally owned SMEs and tourism companies in the Maldives.