India's Exim Bank Borrowing Hits MVR 22 Billion

In the last five years, India's export and import bank (Exim Bank) borrowing swelled to $1.4 billion (MVR 22 billion).

As per the debt data released by the Finance Ministry, the Maldives has procured six loans from the Exim Bank of India within this five-year span. The most substantial sum was acquired for the Villimalé-Gulhifalhu link construction project, with a loan amount of USD 400 million (MVR 6.1 billion).

Exim Bank has sanctioned a loan of USD 41 million (MVR 632 million) for the construction of the police station and USD 40 million (MVR 616 million) for a sports project. The remaining amount is earmarked for various projects required by the central government under India’s Line of Credit.

As of the end of the previous year, the Maldivian government's outstanding debt to the Export-Import Bank of India amounted to MVR 6.2 billion. The disbursement of loans for various projects will occur incrementally as each project progresses. Given that many of these projects are ongoing, the future repayments to the Exim Bank of India are expected to rise.

Former President Ibrahim Mohamed Solih's government borrowed heavily from India, while the previous government before that relied on China to borrow. China's borrowings are also estimated at $1.4 billion (MVR 22 billion). This includes loans with sovereign guarantees.

While the largest portions of government loans of 2023 is owed to Exim Bank of India, the total amount of loans taken is around MVR 50 billion. This includes USD 500 million (MVR 7.7 billion) sold in September 2021. Combined with the sukuk bonds, the state is obligated to settle around MVR 15 billion in debt by the year 2026. This marks the first instance in a year that the state faces such a substantial debt repayment.