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India extends $250M loan to Maldives ‘without conditions’ to deal with COVID-19 economic impact

India has formally extended a $250 million loan to Maldives government to deal with the economic impact of COVID-19.

The loan 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. 

The Indian mission in the Maldives in a statement said, “The budgetary support of USD 250 million is extended without conditions.”

“Government of Maldives is at liberty to use the money in repairing the domestic economic situation in line with its own priorities,” it added.

The loan of $250 million has a tenor of 10 years 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 payment,” the statement added further.

The development stands in contrast to Chinese loans to the country in 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-19’s economic impact.

The loan has been extended in response to the request made by Maldives President Solih to PM Modi for financial assistance and was announced after the virtual meeting between External Affairs minister Dr S Jaishankar and Maldives FM earlier this year. 

Amidst the COVID-19 crisis, India has reached out to the Maldives in a number of ways including by sending a rapid response team of doctors and specialists, a consignment of 5.5 tons of essential medicines, followed by more consignments & 580 tons of food aid including foodgrains, onions, etc. in May. 

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