Letters of finance approval have been handed over to the recipients of the 'Murabaha RSW Financing' facility, which is being carried out under the project to establish Refrigerated Sea Water (RSW) systems on fishing vessels.
At a ceremony held at the President's Office this afternoon, President Dr. Mohamed Muizzu handed over the letters to the 13 parties whose financing was approved under the Murabaha RSW Financing facility.
The 'Murabaha RSW Financing' facility is a financing arrangement established jointly by the Ministry of Fisheries and the SME Development Finance Corporation (SDFC) to install RSW systems on vessels under the Islamic Development Bank (IsDB)'s 'Support People's Livelihood in the Fisheries Sector in Maldives through Sustainable Energy' project. Under this project, RSW systems are scheduled to be installed on at least 100 vessels.
The opportunity to finance the installation of Refrigerated Sea Water (RSW) systems on fishing vessels under the Islamic Shariah-compliant Murabaha principle was opened by SDFC's Islamic Window from September 22 to November 30 last year. It is not yet clear how many parties applied for the facility during this period. The letters handed over today were to the parties whose applications have been processed to the point of disbursing finance from the facility so far.
Targeted at vessels currently engaged in fishing in the Maldives and vessels in a condition to be used for fishing, this facility will finance fishing vessels of 50 feet or larger. Additionally, the vessel must have the capacity to store at least 15 tonnes of fish. Under this facility, financing is provided for the establishment of RSW systems on fishing vessels, the purchase of generator sets, and the purchase of solar power panel systems.
Under the 'Murabaha RSW Financing', up to MVR 2,000,000 is disbursed, with the profit calculated at a rate of 6% per annum. The government pays 35 percent of the cost of the items acquired under this facility. While financing is provided under this facility to be repaid within a maximum of 10 years, a grace period of 6 months is granted. SDFC has also stated that no collateral is required to obtain financing from this facility, and if the amount to be spent under this project exceeds the facility amount, any additional expenses must be borne by the applicant.
