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USD800 million of India's financial assistance for govt projects: minister

Fathmath Shaahunaz
17 December 2018, MVT 17:39
Indian Prime Minister Narendra Modi (R) shakes hands with Maldives President Ibrahim Mohamed Solihas prior to a meeting in New Delhi on December 17, 2018. - Maldivian President is on three-day of state visit to India till December 18. (Photo by Prakash SINGH / AFP)
Fathmath Shaahunaz
17 December 2018, MVT 17:39

Minister of Finance Ibrahim Ameer on Monday disclosed that India's financial assistance of USD 1.4 billion for the Maldives allocates USD 200 million as budget support, USD 800 million for government-initiated projects, and USD 400 million as currency swap.

Local media Mihaaru cited the finance minister that the USD 200 million allocated as budget support comprises USD 50 million as free aid and USD 150 million as treasury bonds. According to Minister Ameer, the Maldivian government will receive the free aid next month, while the funds to be earned via T-bill sales in 2019 will be acquired in three parts.

He shared that the USD 800 million allocated for government projects is a Line of Credit arrangement, to be loaned by the Export-Import Bank of India at an interest rate of 1.5 percent. He added that Maldives Monetary Authority can use the remaining USD 400 million of India's financial assistance as a currency swap instrument.

The new government of recently elected President Ibrahim Mohamed Solih has commenced great efforts to strengthen the ties with India which had soured during the previous administration. The South Asian neighbour had notably granted free aid of USD 25 million (MVR 385.5 million) to Maldives last week.

Minister Ameer assured that the government will utilise the loans and credit facility granted by India such that it does not increase the national debt. He expressed his belief that the USD 150 million granted as treasury bond, which is to be repaid over the next two years, will also become free aid.

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