July 28, 2010 / 6:25 PM / 9 years ago

China to finance $2.6 billion Bahamian resort

* Baha Mar project expected to add 11,000 jobs

* Project was in doubt after Harrah’s pulled out in 2008

* Tourism is a key component of the Bahamas’ economy

By Neil Hartnell

NASSAU, July 28 (Reuters) - China has agreed to let two state-owned agencies finance a stalled $2.6 billion Bahamian resort project that the developer said would provide the biggest job stimulus the Bahamas have ever seen.

Bahamian Prime Minister Hubert Ingraham said in a statement on Tuesday that Beijing had given approval for the agencies to enter into a joint venture with privately held Baha Mar Resorts Ltd for redevelopment of the Cable Beach resort in Nassau.

Chinese Ambassador Dingxian Hu is to meet with Ingraham on Aug. 18 to formalize the agreement.

Tourism and financial services drive the economy in the Bahamas, an Atlantic island chain that stretches from just off eastern Florida to near southeast Cuba and has a population of 310,000 people.

The future of the Baha Mar project was called into question after casino operator Harrah’s Entertainment Inc [HAMLEH.UL] pulled out of the deal in March 2008.

The China Export-Import Bank will provide $2.5 billion in financing, and the other agency, China State Construction, will take a small equity stake in the development and act as main contractor for the 1,000-acre project.

Baha Mar’s chairman and chief executive, Sarkis Izmirlian, said China’s approval was critical for the resort project that is expected to create 11,000 jobs and add $1 billion in new spending to the Bahamian economy in the first year after completion.

As soon as the Bahamian government gives its formal approval, Baha Mar will award almost $60 million in construction contracts for infrastructure work to prepare the resort site, he said.

“We strongly believe that the creation of this world class resort will significantly benefit the Bahamas and all Bahamians,” Izmirlian said in a statement. “Ultimately, our project will result in the creation of 11,000 Bahamian jobs, including 6,000 to 7,000 new permanent positions. This will be the most substantial single job stimulus opportunity the Bahamas has ever experienced.”

The construction phase is expected to last about four years and employ 4,000 Bahamians. The company said that once the resort is fully operating, approximately 98 percent of the staff will be Bahamians.

The company expects millions of vacationers and business travelers a year will visit the resort, which is to include six hotels with 3,500 rooms and condos, the largest casino in the Caribbean, the largest convention center in the Bahamas and an 18-hole golf course and retail village. (Editing by Jane Sutton, editing by Gerald E. McCormick)

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