On June 16th, a facility agreement for the second phase of the “Gulhifalhu Reclamation Project” was signed between ABN AMRO Bank N.V., AKA European Export Trade Bank and ING Bank N.V and the Government of the Republic of Maldives to finance an amount of EUR 101, 787, 500 (MVR 1.6 Billion).
The first phase of the project was initiated in 2020 and the work was contracted to the Dutch dredging company, Boskalias Westminster Contracting Ltd, for USD 53 million (MVR 817 million) to dredge and place 6.5 million cubic meters of sand.
Accordion to the Ministry of Finance, the second phase of the project will facilitate the relocation of the existing international port in Male’ to Gulhifalhu.
Gulhifalhu is located just 6 kilometres from Male’ and is currently being reclaimed to allow for port facilities, modern storage, and warehouses to aid Maldivian economic growth. This reclamation project is a part of the strategic action plan of the Government of the Maldives which started in 2019 and is expected to carry into 2023.
This new borrowing has been sealed at a time when international institutions have been warning on the increased accumulation of government debt. As per latest information released by the Ministry of Finance, the total active loans from external donors have reached USD 3.3 billion, as at end March 2022. Total debt to GDP has reached an alarming 113 percent of GDP.
Please read recent analysis by MFR, Maldives unsustainable debt situation