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Agreement signed for US$800m line of credit from India

The agreement was signed during a visit by External Affairs Minister Sushma Swaraj.



An agreement was signed between the Maldives finance ministry and India’s Export-Import Bank on Monday for a US$800 million line of credit to finance the new administration’s infrastructure projects.

The concessional loans will be used to provide water and sewerage services on several islands, Finance Minister Ibrahim Ameer told the press after signing the agreement with EXIM Bank Chief General Manager Sudatta Mandal.

It will also finance other projects such as the relocation of the Malé commercial port to the nearby Thilafushi industrial island. Detailed proposals for water and sewerage projects on 30 islands have been shared with the EXIM Bank, he added.

Bid announcements were made on Monday for sewerage projects on eight islands and water projects on 11 islands.

The EXIM Bank loans come with a 1.75 percent interest rate and a 15-year repayment period after five years.

The credit line was part of US$1.4 billion worth of finance assistance secured during President Ibrahim Mohamed Solih’s state visit to India in December.

After Prime Minister Narendra Modi attended his inauguration in November, Solih’s visit was hailed as the beginning of a “new era” of relations after historically close ties were strained under the pro-China former administration.

Indian External Affairs Minister Sushma Swaraj attended Monday’s agreement signing ceremony before concluding her two-day visit.

During bilateral talks with his counterpart, Foreign Minister Abdulla Shahid reiterated the longstanding ‘India-First’ policy and assured that the Maldives would “remain sensitive towards India’s security and strategic concerns,” according to a joint statement.

Three deals were signed during Swaraj’s first visit since the new administration took office: an agreement on exempting diplomatic and official passport holders from visa requirements; a Memorandum of Understanding for collaboration on renewable energy; and an MoU on grant assistance for “high impact community development projects through local bodies.”

Swaraj also announced the Indian government’s decision to renew the quota for essential commodities, including river sand and stone aggregate, for three years with effect on April 1.

The Maldives is largely dependent on India for construction material. In 2013, several harbour projects were suspended after India revoked the special quota in the wake of the eviction of Indian infrastructure giant GMR. The restrictions were lifted after former president Abdulla Yameen assumed power in November 2013, ending a period of prolonged political turmoil.

Other issues discussed by the foreign ministers included a visa facilitation agreement that came into force last week, plans to hold a Maldives-India Business Forum this year, and providing a plot of land in Hulhumalé for the new Indian Embassy.

The Maldives also assured support for India’s candidature for a permanent membership of an expanded and reformed UN Security Council.

The Indian delegation agreed to “positively consider” a request for assistance in building a cricket stadium.

On Sunday, Swaraj visited the Indira Gandhi Memorial Hospital and dedicated its renovation to the Maldivian people. The hospital was completed in 1995 as a gift from the Indian government.

Prior to her departure, Swaraj also paid courtesy calls on President Solih and Speaker of Parliament Gasim Ibrahim.