Maldives begins talks to refinance over $1 billion in debt
Zameer also confirmed that final steps are underway for securing $100 million in budgetary support from a partner.
Finance Minister Moosa Zameer announced on Thursday that the Maldives has commenced discussions to refinance more than $1 billion in debt.
Speaking to a parliamentary committee reviewing the upcoming year’s budget, Zameer explained that the Maldives’ borrowing has largely been facilitated through bilateral relationships rather than credit ratings. He emphasised that these relationships make it easier to negotiate repayment terms.
“Discussions are ongoing for a $1.5 billion debt refinancing initiative aimed at creating fiscal space for the president’s commitments,” Zameer said.
He stated that external consultants were not necessary for the debt refinancing process, as the Maldives could resolve matters through direct negotiations.
Zameer highlighted specific agreements under consideration, including:
-
A refinancing agreement for $500 million in private debt expected to be finalised in 2026.
-
A partnership formed during a recent COP meeting to address climate change, which involves refinancing Sukuk debt in exchange for environmental protections and legislative improvements.
“It is anticipated that reaching such an agreement will take around six months,” he added.
Regarding the Maldives' credit rating downgrade by agencies like Moody’s and Fitch, Zameer noted that the decisions were influenced by external factors and rumours rather than immediate financial challenges.
Referring to President Mohamed Muizzu's fiscal policy, Zameer assured that proposed changes in subsidies would not impact low-income households. The revised subsidy system is expected to be finalised within six weeks and launched next year.
Zameer also discussed cost-cutting measures, such as transferring police and military insurance to an external provider to reduce expenses. He emphasised that this would not compromise the medical benefits provided to service members, as arrangements would ensure no out-of-pocket costs even if coverage limits are reached.
Zameer said efforts are underway to strengthen the state tax authority and increase tax revenue through necessary legal reforms.
He explained that this year’s budget excludes detailed project allocations for individual islands to prevent pressure on the overall budget and ensure the ministry's financial targets are met.
