Maldives signs $50 million ADB loan to support fuel imports
Ministry said the increase in global fuel prices has been linked to ongoing conflicts in the Middle East, resulting in additional pressure on public finance.
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The Maldives Government and the Asian Development Bank (ADB) have signed a US$50 million loan agreement aimed at easing pressure on the state budget caused by rising global fuel prices.
The agreement was signed on Sunday by Minister of Finance Hassan Zareer on behalf of the government, State Trading Organisation (STO) Chief Executive Officer Shimad Ibrahim, and ADB Regional Head Dr Thiam Hee Ng.
According to the Ministry of Finance, the financing is intended to support the government's fuel import programme at a time when higher oil prices have increased expenditure on fuel purchases.
The ministry said the increase in global fuel prices has been linked to ongoing conflicts in the Middle East, resulting in additional pressure on public finances.
Funds secured under the agreement will be used to support fuel imports and ensure the continuation of essential public services, including electricity generation and water production.
The Ministry of Finance stated that the loan forms part of the government's efforts to secure concessional financing from multilateral development institutions.
The ministry said access to concessional financing would assist in managing government borrowing and maintaining debt sustainability.
ADB previously noted that higher oil prices, combined with a decline in tourist arrivals, had affected the country's capacity to finance fuel imports.
According to the bank, the funds will be used to import diesel required for electricity generation and water production. The financing will also support logistics related to the transport of food and medical supplies, inter-atoll transport and freight services, and waste management operations.
The latest financing follows a US$40 million loan allocated by the World Bank in May through its existing Maldives project portfolio to support fuel imports.
With the addition of the ADB facility, total support provided by the two development banks for fuel imports and related services now stands at US$90 million.
