India extends USD 250 million loan 'without conditions' to Maldives to overcome COVID-19 economic impact

NEW DELHI: India has formally extended the USD 250 million loan to the Maldives to help it mitigate the economic impact of the coronavirus COVID-19 pandemic. The Indian mission in the Maldives said in a statement, "The budgetary support of USD 250 million is extended without conditions."

The grant, provided under the most favourable terms possible, was handed over at a ceremony in Maldivian capital Male in the presence of Maldives Foreign Minister Abdulla Shahid, Finance Minister Ibrahim Ameer, Indian High Commissioner Sunjay Sudhir and CEO of SBI in Male, Bharat Mishra. 

It was in response to the request made by President Ibrahim Mohamed Solih to Prime Minister Narendra Modi to overcome the difficult economic situation in the Maldives.

Explaining, "The Maldives government is at liberty to use the money in repairing the domestic economic situation in line with its own priorities". The financial assistance was first announced during a virtual meeting with External Affairs Minister S Jaishankar and provided through a Treasury Bond sale to the State Bank of India (SBI), Male which has a tenure of 10 years for repayment, the embassy said.

The USD 250 million budgetary support has a tenure of 10 years for repayment and since the "principal payment is due only at the end of 10 years, it will not put any immediate debt servicing liability other than bi-annual very low-interest payments," the statement read.

The development stands in contrast to Chinese loans to the country in the previous Yameen administration, which has been a concern in terms of the debt crisis it has precipitated. Maldives is the only country to which India has provided such assistance to deal with covid's economic impact.

India had provided substantial and continued assistance to the Maldives during the COVID-19 pandemic. A team of doctors and specialists visited the Maldives in March to assist in COVID-preparedness. A consignment of 5.5 tonnes of essential medicines was donated in April, another consignment of 6.2 tonnes of medicines was airlifted from 4 Indian cities to Male by the Indian Air Force, and 580 tonnes of food aid was provided in May.

Also, approximately 500 Maldivians in 8 batches of Maldivian patients have travelled to India in the past few weeks.