$71M SOVERIGN GURANTEED LOAN FOR JULIUS MAAD BIO INTERNATIONAL CONVENTION CENTRE: WHO PAYS IF THINGS GO WRONG?

By Desmond Isaac Macauley
The Government of Sierra Leone has disclosed that the proposed Convention Centre project, which includes a convention centre, presidential villa, and hotel, will cost an estimated US$86 million, with US$71 million expected to be financed through a loan.
According to the Minister of Information and Civic Education, the project will be implemented under a Public Private Partnership (PPP) arrangement. He explained that, the private partner will contribute US$15 million in equity, while the remaining US$71 million will be borrowed from a bank. The Government will serve as the guarantor for the loan.
The Minister further stated that once construction is completed, a Special Purpose Vehicle (SPV) will be established to manage and operate the convention centre, hotel, and other facilities associated with the project.The Government maintains that, the development will significantly boost Sierra Leone’s tourism sector, conference industry, and overall economic growth.
However, the announcement has raised important public interest questions about the Government’s role as guarantor. Under such an arrangement, if the borrowing entity fails to meet its loan repayment obligations or breaches other agreed conditions, the Government could become responsible for repaying the outstanding debt, subject to the terms of the guarantee.
This has renewed public attention on the potential financial exposure of the State and highlights the need for greater transparency regarding the loan agreement, the specific conditions of the Government guarantee, and the safeguards in place to protect taxpayers should the project fail to generate the expected returns.
The key question many Sierra Leoneans are asking is, If the project is unable to repay the US$71 million loan, who will ultimately bear the cost the private investor or the people of Sierra Leone through the Government’s guarantee?