Grenada’s Four Seasons resort future funding questioned

The future of another Four Seasons development in the Caribbean could be in question as an international financial institution warns the Grenada government about its involvement.

This was disclosed by the head of the IMF’s Western Hemispheric Department, Nita Thacker,  who said if Grenada has to go into further debt, it must be in line with its debt-to-GDP ratio, currently the highest in the Organisation of Eastern Caribbean States (OECS) at 120 per cent.

Cinnamon 88 plans to build the biggest Four Seasons resort in the world on 400 acres in the south of the island. The developed property would include 55 private residences, 115 beach front marina and golf course villas, an 18-hole golf course, spa, tennis academy and a 124-room hotel.

However, the developers have been unable to raise the estimated EC$268 million (US$100 million) required and the government said it has been exploring ways of securing the funding for the project.

This new development comes along with local controversey about the site of the Four Seasons resort which is on Hog Island, a national park which is the used for recreation by locals.

It has been reported by the regional media that the government has said it is considering securing a loan at concessionary rates to build the hotel that will be managed by Four Seasons, if ongoing efforts by British developers fail due to a tight capital market.

The IMF western department chief said, “Where private sector could come in, we believe the public sector should not…but that said, if the project is viable…our recommendation is that if the government has to go to Plan B…it’s not something we would jump to.”

“But if it has to do so it has to be in line with the debt to GDP ratio…It has to be at concessional terms. It has to be vetted out to make sure that the economic benefits far exceed the debt service burden that this would imply,” the IMF official added.

Meanwhile the Finance Minister Nazim Burke said government is hoping the Four Seasons hotel project would begin later this year.

Burke said that if efforts to secure private sector funding fail, then a decision will be taken on a State loan at two and a half per cent interest to be repaid over 25 years with the first five years involving a moratorium.

“Ideally we would like to see that project get off the ground as early as 2010. The best way for it to happen is for the private sector to build this hotel. The government should not get involved if the private sector could finance it,” he said.

“We have an arrangement with a private developer who seems unable in the present circumstances to come up with the funding that’s required to pursue the project. We have been going out and actively looking for private sector partners to marry with the developers. It may or may not work because the capital markets are difficult to access still in this present situation,” the Finance Minister added.