China refinances $74m from $373m loan for Maldives' airport

China's Exim Bank has refinanced a loan for the development of Velana International Airport (VIA).

In 2015, Exim Bank provided a loan of $373.8 million (MVR 5.7 billion) for the development of VIA.

The finance ministry informed the parliamentary finance committee on Thursday that it has signed an agreement to refinance $74.7 million (MVR 1.1 billion) from China's Exim Bank for the VIA project.

In a letter to parliament, the ministry stated that the agreement was signed on September 23 following discussions to refinance part of the loan originally taken in 2015 for the airport development.

The purpose of the refinancing is to improve the financial position by reducing the pressure on state reserves for servicing short- and medium-term debt, according to the ministry.

The refinanced amount will be repaid over six years, with a grace period of three years, as noted in the letter to the Finance Committee.

Details of the repayment schedule include:

The principal amount of the 2015 loan will begin to be repaid from July 21, 2027, from government cash flow, with final repayment in 2030.

Both the original loan and the refinanced loan will be repaid together, but the overall debt level will remain unchanged, the ministry said.