Aug 26, 2011 (LBO) - Sri Lanka's HVA group, a branded tea exporter, is building a 200 million rupee 'forest garden' resort with eco-friendly chalets near a national park in the island's northwest, an official said.
The resort, with 15 eco-friendly chalets powered by solar panels will be built on 50 acres of privately owned land.
The organic farm is proposed to be sited on 225 acres of leased state land near the Southern border of Sri Lanka's Wilpattu national park in the north west of the island, which was closed to visitors until the end of a 30-year civil war two years ago.
"This will primarily be an organic farm cultivating fruits and vegetables according to the organic forest garden concept which does not destabilize the established forest," said Rohan Fernando, the chairman of the HVA Group.
"The resort will be built between a buffer zone of one mile from the park. The farm and the resort will complement each other."
Sri Lanka has seen a surge in tourism with arrivals growing 40 percent in 2010 and 36 percent up to July 2011. The state has announced that it would develop guidelines to build resorts inside buffer zones bordering protected areas.
The project is slated to start in October under HVA Farms, a group subsidiary. HVA has a listed unit, HVA Foods, which exports 'Heladiv' branded ready to drink tea.
The organic farm was started in 1998 as a 25-acre pilot project to grow fruits and vegetables but was halted by environmental activists triggering a 10-year legal battle that ended in the Supreme Court, which finally allowed the farm, Fernando said.
The firm is now finalizing the lease, he said.
Fernando said the first phase of the 'San Vincent Ranch' will cost 200 million rupees, but there are plans to expand beyond 15 chalets later.
The group is looking at equity financing with possible foreign collaboration.
"A foreign party has shown some interest so there will be private equity coming in," Fernando said.
"We will later go to the stock market to raise the additional money. Commercial bank borrowing is ruled out."
He said the firm is open to specialized financing options for agriculture.
source - www.lbo.lk
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