OPEC approves USD 20 mln loan for Maldives

The Organization of Petroleum Exporting Countries (OPEC) pledged to grant Maldives USD 20 million as a Public Sector Investment Program (PSIP) Emergency Loan.

According to a press release by OPEC, this loan aims to support the Economic Recovery Plan by the Maldivian government. This plan includes a package of economic relief measures targeted at mitigating the socioeconomic impact of the COVID-19 pandemic.

Along with Maldives, OPEC Fund for International Development’s Governing Board has approved more than USD 390 million of new funding to support operations in developing countries across the world.

During a virtual 171st Governing Board session, a number of key decisions were also endorsed with regard to the implementation of the organization’s Strategic Framework. These decisions would enable the fund to maximise its developmental impact.

“We recognize that many of our partners are refocusing efforts and resources to contain and mitigate the impact of COVID-19. We are committed to supporting them to do precisely this", said OPEC Fund Director-General Dr Abdulhamid Alkhalifa.

Furthermore, the board endorsed a comprehensive action plan that ensures that the OPEC funding remains a reliable and responsive development partner amidst the COVID-19 pandemic.

The press release noted that the loan is particularly important to Maldives in light of the anticipated downturn in tourism.

With over 70 percent of the country’s GDP attributed to revenue generated by the tourism industry, Maldives’ economy continues to face severe repercussions due to travel restrictions imposed over the COVID-19 outbreak. It is estimated that the country will face a shortfall of approximately USD 450 million (MVR 6.9 billion) in foreign currency.

In a bid to counteract the financial impact of the COVID-19 pandemic on the local economy, Maldivian government introduced an economic relief fund with MVR 2.5 billion intended to prevent the closing down of local businesses and the loss of jobs. The administration has asserted that it will prioritize companies that do not terminate staff members in providing the recovery loans allocated for struggling businesses.