The Minister of Finance and sovereign planning, Moosa Zameer, has stated that strategic plans are in place to facilitate the repayment of the USD 500 million Sukuk, with a primary focus on the nation’s revenue streams. The Minister made these remarks during an appearance on PSM News’ “Raajje Miadhu” program.
In the Presidential Address, President Dr. Mohamed Muizzu highlighted that upon assuming office, the most significant financial strain inherited by the current administration was the obligation to settle a USD 500 million Sukuk. This Sukuk was issued by the previous administration in 2021 at a higher cost to refinance a USD 250 million bond originally taken from the international debt capital market in 2017. Furthermore, the President noted that a major challenge remains the IMF’s Article IV report, published on November 23, 2022, which categorized the Maldives as being at a “high risk of debt distress.”
Elaborating on this issue, Finance Minister Moosa Zameer explained that, unlike the previous administration’s approach, the government is planning to refinance the USD 500 million Sukuk due next April through low-interest options, structured around sustainable revenue projections. The Minister emphasized that due to the proactive measures taken by President Dr. Mohamed Muizzu since taking office, both the Sovereign Development Fund (SDF) and the usable reserves now possess the capacity to meet these debt obligations.
“The Sovereign Development Fund currently holds over USD 275 million designated for repayment. This means we already have the funds required to settle the original USD 250 million debt incurred in 2017, with an additional USD 25 million surplus,” the Minister stated.
The Minister further detailed that with over USD 275 million in the SDF, the usable reserves are now nearing USD 600 million, while gross reserves have exceeded USD 1.1 billion. Consequently, he assured that the government maintains the financial capability to settle the Sukuk, even if the repayment were required immediately.
Minister Zameer also noted that while the government intends to refinance approximately USD 150 million of the Sukuk to manage liquidity, the current administration’s fiscal management has positioned the Maldives to secure such funding at significantly lower interest rates.
