A loan agreement to finance the expansion of the Maldives’ main airport was signed with the Abu Dhabi Fund for Development during President Abdulla Yameen’s official visit to the United Arab Emirates.
Economic Development Minister Mohamed Saeed signed the agreement on behalf of the Maldives at a ceremony Tuesday at the Ruler’s Court in Dubai.
Details of the loan have not been disclosed. According to the finance ministry, the Abu Dhabi Fund pledged a US$40 million loan in March last year.
In addition to a MoU on exempting diplomats from entry visas, bilateral agreements on the ‘Promotion and Reciprocal Protection of Investments’ and ‘Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital’ were also signed Tuesday.
The UAE is the top importer to the Maldives, representing 23 percent of imported items during September.
During the three-day visit, which concludes Wednesday, Yameen met with Sheikh Mohammad Bin Rashid Al Maktoum, the ruler of Dubai, Sheikh Abdullah Bin Zayed Al Nahyan, the minister of foreign affairs and international cooperation, and Suhail Mohamed Al Mazroue, the minister of energy.
The president also met with the CEO of DP World to discuss “the investment potential in establishing state of the art port facilities within the Maldives.” A MoU was signed with the global marine terminal operator in March 2015, but the government was previously unable to reach a deal to develop a port near Malé.
After accompanying the president on a tour of Burj Khalifa, the tallest building in the world, First Lady Fathmath Ibrahim meanwhile met with Princess Haya Bint Al Hussein, spouse of the ruler of Dubai, and visited the Rashid Centre for the Disabled.
On Tuesday night, the first couple met with the Maldivian community in UAE.
The Abu Dhabi Fund loan signed yesterday adds to nearly US$600 million borrowed during the past two years to finance the expansion of the Velana International Airport.
Loan agreements worth US$200 million were signed last year with the Saudi Fund for Development, the Kuwait Fund and the OPEC Fund. The Saudi Binladin Group was enlisted in May 2015 to build a new passenger terminal for an undisclosed amount.
The government also secured a US$373 million concessionary loan from the Chinese EXIM Bank and hired China’s Beijing Urban Construction Group to build a new 3.2-kilometre runway, a fuel farm, and a cargo complex.
Reclamation work to expand the Hulhulé airport island by some 62 hectares was subcontracted to the Dubai-based Gulf Cobla.
Both the opposition and international financial institutions have warned that the Maldives is facing a high risk of debt distress due to the unprecedented infrastructure scale-up, which includes the US$200 million China-Maldives Friendship Bridge.
The International Monetary Fund predicts that public debt will reach 121 percent of GDP by 2020 but the government says its flagship projects are necessary to address bottlenecks in the economy and would deliver longer-term payoffs.