The Maldivian government secured nine loans totalling USD 334 million (MVR 5.2 billion) in 2024, according to statistics released by the Ministry of Finance. The loans, predominantly aimed at financing the Velana International Airport project, have contributed to the country’s rising debt, now projected to reach MVR 150 billion by the end of 2024, equivalent to 124 percent of GDP.
Largest Loans Allocated to Airport Development
The most significant loan of USD 150 million (MVR 2.3 billion) was obtained from the Saudi Fund for Development for the Velana International Airport project. This is followed by a USD 75 million (MVR 1.2 billion) loan from the Export-Import Bank of China (China EXIM), earmarked for refinancing and upgrading the airport.
The third-largest sum, totalling USD 40 million (MVR 617 million), was borrowed from the Islamic Development Bank (IDB) through two separate loans to support small and medium enterprises.
Breakdown of Government Loans
The Ministry of Finance provided detailed information on the loans taken this year:
- Saudi Fund for Development: USD 50 million (MVR 771 million)
- Saudi Fund for Development: USD 100 million (MVR 1.5 billion)
- China EXIM Bank: USD 75 million (MVR 1.2 billion)
- Islamic Development Bank: USD 10 million (MVR 154 million)
- Islamic Development Bank: USD 30 million (MVR 463 million)
- Kuwait Fund for Arab Economic Development: USD 10 million (MVR 154 million)
- Asian Infrastructure Development Bank: USD 15 million (MVR 231 million)
- Asian Development Bank: USD 4 million (MVR 62 million)
- Abu Dhabi Fund for Development: USD 40 million (MVR 617 million)
Notably, 80 percent of the loans taken in 2024 were dedicated to the Velana International Airport project, which is estimated to be completed by mid-2025. The government initially targeted completion during the 2023 peak tourism season.
Rising Debt and Strain on Public Finances
The Maldives’ total State debt stood at MVR 139 billion at the end of 2023. The 2024 budget projects this figure to rise to MVR 150 billion, marking the highest debt-to-GDP ratio in the nation’s history. Debt repayments will place significant strain on public finances, with MVR 9.4 billion allocated for repayment this year and MVR 15 billion required in 2025.
The Ministry of Finance has acknowledged the need for further fiscal reforms and spending cuts to manage the rising debt burden. However, the budget estimates that State debt will remain above 95 percent of GDP until at least 2027.
The high levels of borrowing and repayment obligations highlight the challenges facing the Maldivian economy. As the government continues to rely on external loans to fund large-scale infrastructure projects, balancing debt sustainability and development remains a pressing concern. The Ministry of Finance has reiterated the importance of fiscal discipline and reform to ensure long-term financial stability.
