The project, which is expected to be completed in the first quarter of 2008, is a joint-venture between the Shangri-La Asia Limited (Shangri-La) and the Government of the Maldives. Shangri-La, which is based in Hong Kong, is a leading owner and operator of deluxe hotels and resorts mainly in South East Asia. Shangri-La is publicly-listed on the Hong Kong Stock Exchange and is approximately 43% owned by Kerry Group Limited, a conglomerate based in Hong Kong that is controlled by the family of Mr. Robert Kuok, a prominent entrepreneur. About half of Shangri-La’s revenues are from mainland China and Hong Kong and these are its two main areas of focus. However, in order to diversify its portfolio and increase the awareness of its brand, Shangri-La is steadily expanding outside of South East Asia.

The estimated Project cost is $120 million. IFC is considering providing financing for its own account of up to $50 million. In addition, IFC is considering mobilizing a B loan of up to $22 million from commercial banks.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

The project is located on Villingili island, a greenfield uninhabited site in the Addu atoll. Villingili Island is adjacent to the island with the Gan airport (an old RAF airbase that has recently been upgraded) and about a one-hour flight from the main international airport in the capital city of Male.

The project will be the first major development in the Addu atoll, which is a remote and underdeveloped region of the Maldives. Historically, there have been limited economic opportunities in this atoll and tourism development is essential for creating jobs in the region. The Shangri-la resort is expected to generate direct and indirect employment. In addition, the project has the potential to provide a demonstration effect and kick off the development of a broader resort industry in the Addu atoll.

- Promoting ‘South-South’ investment as the Project is Shangri-La’s first investment in the Maldives;
- Supporting a resort development in a remote and underdeveloped region, and thereby assisting in creating a new destination within the Maldives;
- Providing flexible long-term financing for IFC’s own account;
- Mobilizing long-term financing from overseas commercial banks.

Key environmental, social, health and safety issues:

- social, environmental, and health and safety management systems;
- site concession process;
- government clearance and permitting process;
- community consultation and safety and security issues;
- management of construction impacts;
- fair, healthy and safe working conditions during construction and operation;
- source and volumes of water and power during construction and operation, including resource efficiency programs;
- hazardous materials management;
- air and noise emissions and ambient air quality;
- minimization, treatment and disposal of liquid, solid and hazardous wastes; occupational health, safety, hygiene, and emergency response planning;
- community health, safety, security and engagement;
- impacts of construction and operation activities on sensitive natural resources, including conservation and sustainable management of house and other coral reefs; and
- corporate social responsibility and community development programs.

As required by the Government of the Maldives, the sponsor commissioned detailed, independent Environmental Impact Assessments (EIAs) of the proposed development, which were submitted in May 2006. The EIAs concluded that mitigation measures can readily be designed to address the impacts identified, that adverse impacts are not expected to be diverse or irreversible and will be limited to project site, and that no physical or economic displacement of communities will occur. Details on IFC’s assessment of the environmental and social issues associated with this project can be found in the Environmental and Social Review Summary (ESRS).