The Indian government has approved a budget support of USD 250 million to the Maldivian government to address the economic drop in the Maldives amid the COVID-19 pandemic.

The Indian High Commission in the Maldives said that the Indian government approved the support funding yesterday.

At a special ceremony held in New Delhi yesterday, the Indian government signed a sovereign guarantee with the State Bank of India (SBI) as the loan aid to the Maldives is set to go through the SBI in the Maldives.

The loan was agreed to be repaid within ten years with an interest rate of 3.5 percent. Maldives is the only country the Indian government is providing financial aid amid the COVID-19 crisis.

After taking office, President Ibrahim Mohamed Solih made an official visit to India where he secured USD 800 million as a line of credit where India’s EXIM bank will release funding for the projects proposed by the Maldivian government.

These loans come with a grace period of five years and has to be repaid within 15 years after that. These loans also come with an interest rate of 1.75 percent.