Asian Development Bank (ADB) signed a USD 41 million finance package with Bank of Maldives (BML) to support locally owned small and medium businesses and tourism companies in the Maldives.
The entire financing package arranged, structured and syndicated by ADB, as the sole mandated lead arranger and book runner, comprises a loan up to USD 13 million from ADB’s ordinary capital resources, a parallel loan of up to USD 13 million from Japan International Cooperation Agency (JICA) and a parallel loan of up to USD 5 million from the Development Bank of Austria.
Additionally, ADB blended the project’s debt financing with a concessional loan up to USD 9 million from the Canadian Climate Fund for the Private Sector Asia II (CFPS II) and a grant up to USD 2 million from ADB’s Asian Development Fund (ADF) – Private Sector Window (ADB-PSW).
Commenting on the financing package agreement – ADB’s Director General for Private Sector Operations Suzanne Gaboury said the blue economy is crucial to future prosperity in Maldives, as its people and economy are intrinsically linked to the health and wealth of the ocean, coral reefs, beaches, and marine life while investments in the blue economy including by SMEs and through climate adaptation projects have been lacking.
“This partnership with BML will deliver much-needed financing to the tourism sector and support climate projects locally owned SMEs, including those owned and run by women,” she added.
According to ADB, at least 60 percent of the loan package will be earmarked for lending to SMEs and 5% allocated to women-owned or led firms. The CFPS II loan and PSW grant will support BML’s capacity to support and promote climate change mitigation and adaptation projects focused on the blue economy.
BML’s CEO, Managing Director Karl Stumke assured the bank will continue to enhance its focus on supporting sustainable tourism and economic recovery in the country while helping to mitigate the impacts of climate change.
Maldives is highly vulnerable to natural hazards and extreme climate events due to its fragile ecological profile and low elevation. Moreover, Maldives lacks domestic conventional energy resources and is dependent on imported fossil fuels. Financing from ADB-administered funds will help improve the resilience and sustainability of the economy, especially the tourism sector.