Minister of Finance Ibrahim Ameer has stated that now is the time to obtain funds and develop the economy.
Speaking to PSM News, Minister Ameer said the loans taken with the USD100 million credit facility provided by the EXIM Bank of India have a small interest rate of 1.75%, with a five-year grace period. As such, the minister said that now is the time to accept funds at a cheap price to finance initiatives that expand the economy. He detailed the government has accepted loans to fund the relocation of the Male’ Commercial Harbour to Gulhifalhu, noting that the port is unable to cater to the expanding market. He also said that concessional loans are being taken to fund projects to develop roads and establish water supply and sewerage systems across the country.
Furthermore, Minister Ameer said there is no issue in repaying the loans and the financial policy of the World Bank recommends a grant element of 36%, which is considered concessional and sustainable financing. He highlighted the line of credit provided by the EXIM Bank of India has a grant element of 29-30%.
The Maldives signed a USD 800million credit facility with Exim Bank of India in 2019 and an additional USD100 million was facilitated during President Ibrahim Mohamed Solih’s trip to India earlier this month. The government stated that the credit facility is being used to fast-track ongoing projects, including the development of a specialty hospital for cancer and Hanimaadhoo Airport, as well as towards efforts to restore the economy to pre-pandemic levels this year.