Japan, Maldives sign USD 47.5 million emergency support loan

The Japanese government, on Sunday, extended the 'COVID-19 Crisis Response Emergency Support Loan' worth USD 47.5 million (JPY 5 billion) to Maldives, marking Japan's largest concessional loan extended to the island nation in history.

During a ceremony held at the Ministry of Foreign Affairs, Ambassador of Japan to Maldives Keiko Yanai and Foreign Minister Abdulla Shahid signed the Exchange of Notes for the loan.

According to the foreign ministry and Japanese embassy, the concessional loan comes with a fixed annual interest of 0.01 percent for 15 years.

Speaking at the ceremony, Shahid thanked the government of Japan for their continued support for Maldives' efforts towards economic recovery and stabilisation.

He hailed Japan as "a very special friend and steadfast ally" to the island nation, highlighting the decades-long bilateral ties between the two countries.

Ambassador Yanai noted that the loan was extended as Japan wanted to contribute towards alleviating the high fiscal stress caused by the social and economic impact on Maldives due to the prolonged pandemic.

“This is virtually a zero-interest rate loan, because it is an emergency support loan to the government of Maldives for the people of Maldives”, she said.

Japan expressed hopes that this financial assistance will enable the government to scale up its on-going efforts to strengthen the capacity to respond to COVID-19 pandemic and revitalize its socio-economic activities.

Considered one of the three Asian giants, Japan had extended support to the island nation’s COVID-19 response in various forms prior to the aforementioned loan as well.

The country previously extended grants totaling up to USD 7.5 million for the Maldivian government to equip and improve health services at atolls and regional hospitals, support small and medium enterprises in agri-businesses affected by COVID-19 and to complement the state’s efforts to respond to COVID-19.