Maldives has arranged a portion of the loan taken out from China's EXIM Bank to be refinanced.
The government has taken an additional loan in order to repay the loan taken out from China's EXIM Bank back in 2015.
According to the document shared with the Ministry of Finance by the Public Accounts Committee of the Parliament, USD 75 million has be refinanced in order to pay back a portion of the USD 378 million loan taken out via China's EXIM Bank for the Velana International Airport (VIA) project.
- Total loan amount: USD 75 million
- Repayment period: 6 years
- Grace period: 3 years
- Interest rate: USD 3.3 million
- Total repayment amount: USD 78 million
- Loan repayment completion date: 2030
As per the document, the decision to refinance the loan was taken following discussions held during President Dr Mohamed Muizzu's visit to China back in January.
This decision was influenced by the country's deteriorating financial situation and diminishing foreign currency reserves, the Finance Ministry said.
While the initial loan's repayment started in 2022, no payments will need to be made on the loan for the next three years. However, when repayment does start in 2027, the principal amount for the loan taken out in 2015 will also need to be paid.
The Finance Ministry said this three year break will allow the country to stabilise its financial situation in a sustainable way.
Maldives' debt currently stands at USD 126 billion, with the amount expected to raise to USD 130 billion by the end of the year.
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