Maldives has accumulated borrowings amounting to USD 1.4 billion (MVR 22 billion) from the Export-Import Bank of India (Exim Bank) over the past five years. According to the latest data from the Finance Ministry, this period saw the Maldivian government procuring six loans from Exim Bank.
The largest of these loans, amounting to USD 400 million (MVR 6.1 billion), was designated for the construction of the Villimalé-Gulhifalhu link project, reflecting the Maldives’ commitment to major infrastructural development. Additionally, Exim Bank has extended a loan of USD 41 million (MVR 632 million) for constructing a police station and another USD 40 million (MVR 616 million) for a sports project. The rest of the funds are allocated to various central government projects under India’s Line of Credit.
By the end of the previous year, the Maldivian government’s debt to Exim Bank stood at MVR 6.2 billion. The disbursement of these loans is set to follow the progression of the respective projects, indicating a potential increase in future repayments to the Indian bank.
This borrowing trend represents a shift in the Maldives’ international financial relationships. The former government of President Ibrahim Mohamed Solih primarily sought financial assistance from India, in contrast to the preceding administration, which relied heavily on China. Chinese loans to the Maldives are also estimated at a similar figure of USD 1.4 billion (MVR 22 billion), inclusive of sovereign guarantees.
Despite the significant portion of its debt being owed to Exim Bank, the Maldivian government’s total borrowing stands at around MVR 50 billion. This figure includes a notable issuance of USD 500 million (MVR 7.7 billion) in September 2021. Alongside this, the state is also committed to settling approximately MVR 15 billion by 2026, including repayments for sukuk bonds. This marks a critical juncture for the Maldivian state, as it faces one of its most substantial debt repayments in a single year.
As the nation progresses with its various development projects, the impact of these financial decisions will be closely watched both domestically and internationally.
