Government repays USD 525 million sukuk issued by previous administration, using SDF and state reserves

The government has repaid the USD 525 million sukuk issued in 2021 by the previous administration, the Ministry of Finance announced Thursday.

According to the ministry, a total of USD 524.68 million was settled, comprising the USD 500 million principal and USD 24.68 million in profit payments. The amount is equivalent to roughly MVR 8 billion.

The repayment was made using funds from the Sovereign Development Fund (SDF) and the state’s official reserves. The ministry said the settlement will help reduce public debt as a share of GDP and strengthen medium‑term fiscal stability.

The sukuk was issued during President Ibrahim Mohamed Solih’s administration to refinance the USD 250 million “Sunny Side” bond that matured in 2021. The Finance Ministry noted that the sukuk had been taken at a high cost “without an adequate policy to repay the debt” amid fragile global economic conditions.

Despite the large repayment, the ministry said the government will continue prioritising the uninterrupted supply of fuel, essential goods, and basic services to the public.

The ministry also highlighted ongoing work with international partners to maintain financial stability, including the successful negotiation to defer repayment of a USD 100 million loan from the Abu Dhabi Fund.