Nakheel in talks with banks to help out The World developers

Nakheel is currently in talks with banks regarding the financial situation of several developers at The World, hoping to kick-start the development, according to The National. The construction of the 254 articial islands has cost Nakheel more than Dh11bn, and many of the developers are now experiencing difficulties funding their developments at The World.

“The problem with today’s climate is the non-availability of liquidity. Developers are not going to get construction finance. We need the banks to start financing our developers, so we are working closely with them to come up with packages for the developers who we feel are not a credit risk,”

said Hamza Mustafa, the managing director of The World.

This year, six developers are expected to begin work on their islands, meaning construction will start on a total of 25 islands. According to the contract with Nakheel, a developer who purchase an island at The World must begin construction work within five years from the time the island is handed over. Currently, 175 of the 254 islands has been sold, and about 79 developers are involved in the project.

“In the past they would have had to pay a 1 per cent penalty in interest a month [for missing an instalment], but now we’re being more accommodating. We understand everyone’s in a situation,” Mr. Mustafa said. “I’ve also had developers who have asked for consolidation, which means those who bought, let’s say, two islands now want to give one up.”

The National

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