Discussions to refinance USD 1.5 billion debt underway: Minister Zameer

Discussions are underway to refinance the USD 1.5 billion debt owed by Maldives to other countries, said Finance Minister Moosa Zameer today.

This comes as concerns over sustainable repayment of debts were shared by central bank Maldives Monetary Authority (MMA) and the Auditor General's Office at the Parliament's Budget Committee today.

Speaking on the budget today, Minister Zameer said that Maldives' debt is different compared to other countries, highlighting that a large percentage of Maldives' debt has to be repaid to individual countries.

"We have bilateral debt. Theoretically we have not been given [...] based on the rating. Because of the bilateral relationships, if we request our bilateral partners, concessions will be made," Zameer said.

"But because these countries have given loans to other countries as well, they would not want to make public the concessions they allow for a country."

Without naming a specific country, the Minister said that the government is already in discussions to refinance a debt of USD 1.5 billion, and said that they are very hopeful of a positive outcome.

This revelation also comes after President Dr. Mohamed Muizzu announced in July that China, India and the UAE have also agreed to refinance various loans taken by Maldives for developmental projects.

Commenting further on the budget, Zameer noted that the free aid allocated for next year is more realistic compared to previous years.

This includes a guarantee to receive MVR 1.6 billion in aid following a discussion by President Dr. Mohamed Muizzu with a country's head of state, and written assurance for a further USD 50 million, he said.

MVR 2.5 billion has been allocated in next year's budget as free aid. This includes MVR 2.3 from friendly countries, out of which India is estimated to give MVR 1.6 billion while China will likely give MVR 502 million, and Japan may give an additional USD 47 million. Pakistan, Italy, Saudi Arabia and the Netherlands are also expected to lend some aid to the island nation.

The budget also includes MVR 336 million to be received from international financial institutions.

This sums up next year's annual budget to a record amount of MVR 56.6 billion. Including the amount supplemented to this year's budget, this is an increase of MVR 1.8 billion.

From the MVR 56.6 billion, MVR 49.2 is listed as expenditure, which includes MVR 35.9 billion as recurrent expenses and MVR 13.3 billion as capital expenses.