The governments of Maldives and neighboring India have officially signed the credit facility agreement under which India will be loaning $800million to the Maldives to enhance development projects.
The governments of the two countries came to a agreement on the facility during President Ibrahim Mohamed Solih's maiden visit to India after he took office. During the trip, India agreed to loan $800 million through India's Exim Bank.
At a ceremony held at the Finance Ministry on Monday, Chief General Manager of Exim Bank, Sudhatta Mandal signed the agreement, while Finance Minister Ibrahim Ameer signed the papers on behalf of the Maldivian government.
Under the agreement, the Exim bank will provide loans to the Maldivian government up to USD800 million when details of the development projects that requires funding are submitted to the bank. With grace period of five years, the interest rate on the loan is 1.75%. According to the loan terms, the loan has to be repaid within 15 years.
Following the ceremony, Minister Ameer said the funds will be used for water and sewerage projects and to relocate the commercial harbor to Thilafushi island from capital Male'. Details of water and sewerage projects of 30 islands have already been submitted at the bank, revealed the Minister. The financial facility being provided by the Exim bank would greatly expedite the project completion, said the Minister.
During President Ibrahim Mohamed Solih's official visit to India, India agreed to grant a credit facility of USD 1.4 billion to the Maldives, out of which USD 50 million counts for free aid. This is the first time in recent history that India is financially assisting the Maldives with such an exorbitant amount.
