The Government of Maldives has completed the repayment of a major sukuk issued in 2021, settling a total of USD 524.68 million (approximately MVR 8 billion), the Ministry of Finance and Planning has revealed.

The repayment includes the principal amount of USD 500 million, along with USD 24.68 million in interest – financed the settlement using the Sovereign Development Fund (SDF) and state reserves.

The Ministry noted that clearing this debt has reduced the country’s overall debt burden relative to economic output and is expected to strengthen the Maldives’ fiscal position in the medium term.

The sukuk was originally issued during the administration of former President Ibrahim Mohamed Solih to refinance a USD 250 million “Sunny Side” bond that matured in 2021. The Ministry also highlighted that the sukuk had been raised under challenging global economic conditions and at comparatively high interest rates.

Since assuming office in 2023, the current Administration has prioritised debt repayment in a manner that avoids adverse impacts on the national economy and public finances. A key measure included strengthening the Sovereign Development Fund by increasing foreign currency inflows.

In addition, revisions to airport development fees in 2024 have contributed to boosting inflows to the fund, without placing additional burden on Maldivian travellers. As a result, foreign currency holdings in the SDF have exceeded USD 350 million for the first time.

Official reserves have also risen significantly, surpassing USD 1.3 billion by the end of March this year – marking the highest level in the country’s history.

Despite the large repayment, the Government has assured that essential services, including fuel supply, basic services, and the provision of goods, will continue without disruption, while efforts to sustain economic activity remain ongoing.

The Ministry further stated that discussions with international financial institutions are underway to secure additional financial support. This includes successful negotiations to defer repayment of a USD 100 million bond owed to the Abu Dhabi Fund for Development.

The Government reaffirmed that its overarching objective is to maintain fiscal and economic stability while steering the country towards a more sustainable and manageable debt trajectory.