USD 75M out of loan taken from China’s Exim Bank refinanced

The Government of Maldives has refinanced USD 75 million out of a USD 378 million loan withdrawn from China’s Export-Import (EXIM) Bank in 2015 to upgrade Velana International Airport (VIA).

Refinancing a loan is the withdrawal of an additional loan to repay a debt and shifting the terms of the initial loan to the new one. 

The agreement pertaining to the refinancing was executed on September 23^rd.

A letter sent by the Finance Ministry regarding the matter was disclosed at a meeting of the Parliament’s Public Accounts Committee held on Monday.

As per the letter, a refinancing agreement of USD 75,767,599.98 has been executed.

The first interest payment of the loan is to be repaid on January 21, 2025. This will be followed by bi-annual interest payments on every January 21^st and July 21^st. The interest rate is two percent accounting for USD 3.3 million.

The refinanced amount is to be paid over the course of six years. This is inclusive of the three-year grace period.

Henceforth, the loan repayment needs to be settled in 2030.

The loan was withdrawn on non-conditional terms.

Finance Ministry cited the main purpose of refinancing the loan as to ease the pressure on the government to service short and mid-term debts.