Government Takes $80 Million in New Loans This Year Despite Pledge to Avoid Borrowing

Despite repeated promises to reduce the national debt and avoid taking on additional loans, the government has borrowed US$80 million from foreign financial institutions so far this year, according to financial records published by the Ministry of Finance.

The loans were obtained to finance fuel imports and the development of harbors across the Maldives.

According to the Ministry of Finance’s publicly available “Active External Loans” report, the government secured loans from the OPEC Fund for International Development and the World Bank’s International Development Association (IDA) during the year. Each institution provided US$40 million, bringing the total to US$80 million.

The US$40 million borrowed from the OPEC Fund was allocated to the Multi-Island Harbour Development Project. The US$40 million borrowed from the IDA was provided under the Maldives Emergency Support for Critical Services Project. The World Bank approved this financing to help the Maldives cope with disruptions in global fuel markets linked to the Iran conflict.

Earlier government projections estimated that total public debt would reach MVR 158.8 billion by the end of the year. However, with these newly acquired loans, there are growing concerns that the country’s debt burden will increase further. This comes at a time when the Maldives is already facing the highest debt repayment obligations in its history.

Although the government has maintained that the increase in external debt remains limited, domestic borrowing has risen significantly. The 2026 state budget projects that more than MVR 12 billion will be spent on debt repayments alone. The addition of new loans is expected to place even greater pressure on the country’s economy.