India handed over financial assistance of USD 250 million to the government of Maldives on Sunday as budgetary support to mitigate the economic impact of the COVID-19 pandemic. India’s high commissioner to Male, Sunjay Sudhir and CEO, State Bank of India, Male, handed over the funds to Maldivian foreign minister Abdulla Shahid and finance minister Ibrahim Ameer, in Male.
The assistance was announced during a virtual meeting the external affairs minister, S. Jaishankar, had with the Maldivian leaders last month. The amount of this loan, however, was not announced then. President Ibrahim Solih had earlier requested Prime Minister Narendra Modi for financial help to overcome the difficult economic situation in country. The assistance is being given through a treasury bond sale to SBI, Male, which has a tenure of 10 years for repayment.
According to a release from the Indian high commission in Male, the loan was routed via SBI so that it does not reflect in the external borrowings of the island nation. Also, since the principal is due only after 10 years, there is no immediate debt liability apart from biannual interest payment.
Maldives is the only country to which India has lent a pandemic-specific financial assistance. The country is free to use the loan for whatever development purpose it wants, there are no conditions attached to the loan.
India’s ties with the Maldives have been on an upward swing since Solih came to power last year, overthrowing the China-leaning Abdulla Yameen.
During the pandemic, India has been the first respondent for help, sending medicines, medical teams and food assistance. So far, India has donated nearly 12 tonnes of medicine and 580 tonnes of food aid. Five hundred Maldivians have arrived in India for medical treatment in various batches in the last few weeks. India will soon also send doctors and nurses, recruited in short term contracts, for providing medical to help strengthen the country’s health system as it battles the pandemic.
During Jaishankar’s virtual meet, India also announced that it would build Male’s largest infrastructure project, a series of bridges connecting nearby islands with the capital.
