India extends USD 250m to Maldives as budgetary support

Neighboring India has extended a financing package worth USD 250 million – approximately MVR 3.9 billion – as budgetary suppport.

The announcement to provide the financial aid was made during a digital video conference held on Thursday, where Maldives Minister of Foreign Affairs of Maldives Abdulla Shahid and Minister of External Affairs of India Dr. Subrahmanyam Jaishankar were in attendance.

While Shahid updated his Indian counterpart on the economic crisis faced due to the Covid-19 crisis, India assured that the financial assistance of USD 250 million "will shore up liquidity, ease exchange rate fluctuations and provide much-needed budgetary support."

President Ibrahim Mohamed Solih described this as "a landmark moment" and thanked Prime Minister Narendra Modi and the Indian people for the "generosity and friendship."

During the meeting, Shahid and Jaishankar also touched down on the progress on the ongoing development projects between the two countries, especially the good progress observed in the projects being considered under the USD 800 million Line of Credit signed in 2019.

As such, a new Indian Line of Credit of USD 400 million along with a grant component of USD 100 million was announced to link Male with Villingili, Gulhifalhu and Thilafushi (Industrial Zone) by bridge and causeway spanning 6.7 kms was announced on Thursday.

The connectivity project will see the construction of bridges and causeways to link Malé, Villingili, Thilafushi and Gulhifalhu, measuring a total length of 6.695 kilometers.

This project will be the single largest infrastructure project in the Maldives, upon completion.

An USD 800 million credit line was extended during a state visit by President Solih's to India in December 2018. The agreement was signed between the Indian Export Import Bank and the Ministry of Finance in March 2019.

Currently, there are a number of key infrastructure projects being considered for financing under the Line of Credit.

Both ministers had during the video conference, agreed to work towards further enhancing the implementation on these key infrastructure projects.

Further, having agreed on the importance of smaller projects which are being carried out under the Indian High Impact Community Development Projects Scheme as well as the cash grant of MVR 106 million by the Government of India, both ministers held discussions regarding the smaller projects.

During the first round, 19 projects in 74 inhabited islands had been approved for financing and nine projects are being implemented under the High Impact Community Development Scheme.

During the meeting, FM Shahid noted that India has been among the first to respond during this pandemic, as it has with every crisis the Maldives has faced.

Since the global pandemic began sweeping across the globe infecting and killing thousands since December, the neighboring nation has extended assistance towards Maldives in a number of ways. This includes assistance in repatriating the nine Maldivians stranded in Wuhan City of China, where the virus surfaced as well as repatriating the over thousand Maldivians stranded in regions of India, due to the pandemic.

India has also been a key contributor in ensuring Maldives does not run out of essential supplies, having been providing essentials such as staple food items and medicines needed by the citizens.

The friendly neighbor had even dispatched a team of medical experts to the Maldives to support the country’s response efforts in the health sector.

In addition, despite the country having closed its borders for international travel, through a special request from the government of Maldives, India has been approving travel for critical Maldivian patients requiring advanced medical treatment unavailable in the Maldives.