Govt to take out USD 300 million loan next year to pay 2026 debt

The government has announced plans to take out a USD 300 million loan next year in order to pay part of the upcoming 2026 debt repayment.

Speaking at the Public Accounts Committee of the parliament today, Finance Minister Dr. Mohamed Shafeeq answered a question about next year's fiscal strategy, and said that they are now developing a fund to seek additional investors to invest in the Sovereign Development Fund (SDF), in order to prepare for the USD 500 million debt repayment the government has to make as a single payment in the year 2026.

He said that the USD 300 million to be taken to refinance the debt would be paid over multiple years rather than one lump sum.

"We're not thinking to pay the USD 300 million as a one time payment. We want to structure it to be settled in the least burdensome way," he said.

While the government plans to take out this USD 300 million loan, SDF will spend USD 200 million as loan repayment in the year 2026. The state is working towards depositing USD 250 million by then, and has decided to increase the airport development fee in order to achieve this goal.

The state's debt which has to be repaid in the year 2026 exceeds USD 972 million, with over USD 648 million to be paid near year as well. While there are difficulties sourcing funds to make these payments, the government also faces challenges in financing the state's budget requirements. Due to this, Maldives is now exercising cost cutting measures on a government level.

Maldives' total debt is expected to reach USD 8.37 billion by the end of this year.