The government has secured USD 80 million in loans from two international financial institutions this year to fund fuel imports and harbor development projects across the islands, according to the Finance Ministry’s latest debt schedule.
The ministry’s updated "Active External Loans" table reveals that the financing was obtained from the OPEC Fund for International Development and the World Bank’s International Development Association (IDA). Each institution provided a loan of USD 40 million.
The loan from the OPEC Fund was secured for the "Multi-Island Harbor Development Project," while the IDA financing was allocated to the "Maldives Emergency Support for Critical Services Project."
The USD 40 million IDA loan, facilitated through the World Bank, was provided to mitigate the impact of energy market volatility resulting from the conflict in Iran. The government had previously announced its efforts to secure this facility shortly after the onset of the war.
Prior to the start of the fiscal year, the Finance Ministry projected that total state debt would reach MVR 158.8 billion by year-end. However, due to the economic repercussions of the conflict, there is a possibility that debt levels may exceed these estimates.
As the national debt continues to rise annually, this year marks the highest debt servicing and repayment obligation in Maldivian history. A significant portion of this expenditure was attributed to a Sukuk repayment completed in April.
The approved budget for this year initially estimated that over MVR 12 billion would be required for debt servicing alone. However, this figure is expected to decrease by MVR 1.5 billion following the deferment of a bond repayment owed to the Abu Dhabi Fund.
While the rate of external debt accumulation under the current administration remains relatively low compared to previous governments, domestic borrowing has increased to concerning levels.
