State obtained loans deferred by China, discussions for easements still underway

Sinamale' bridge.

Finance Ministry has stated that only loans obtained by the government of the Maldives from China were deferred as part of easements provided by China to the Maldives due to COVID-19 and its economic impact.

Information provided by the Ministry in response to questions by Sun read that China had deferred payments of some loans under the G-20 debt service suspension initiative. The loans were deferred from May to December. The Ministry also stated that only loans directly obtained by the state were deferred by China under the initiative. 

The Ministry said that discussions were also underway for easements to be brought about to loans obtained for which the state remained as the guarantor. This includes loans obtained by the Housing Development Corporation, Maldives Airports Company Limited as well as state enterprises. President Solih has also previously expressed concern over the loans. 

The President has stated that the Maldives owed China USD 75 million in loan repayments in 2020 alone. However, the Finance Ministry did not disclose details of the state debt owed by the nation when questioned by Sun. 

The total amount of loan repayments by the nation to China as well as the interest rates and amount of these loans and information pertaining to this was also not disclosed by the Ministry despite being questioned by Sun. 

Speaker of the Parliament Mohamed Nasheed has previously said that the government owed China USD 3.4 billion in loan repayments, only to be refuted by the Chinese Ambassador to the Maldives Zhang Lizhong, who said that the actual amount was USD 1.52 billion.

China had financed a number of infrastructure projects in the Maldives including the China-Maldives Friendship bridge also known as Sinamale’ bridge locally. Finance Minister Ibrahim Ameer has previously said that the interest rate of the loans obtained from China was two percent and that the Maldives had a grace period of five years with a repayment period of 20 years.