Friday
22nd Nov 2024
Dhivehi Edition
Minister Ameer with officials of Mashreq bank.
Minister of Finance Ibrahim Ameer has met foreign financial institutions to acquire loans for the state as the state has not received its projected funds in revenue and loans.
The Finance Minister and his team are currently in the United Arab Emirates. According to the ministry, Minister Ameer on Monday has met with officials from the Mashreq Bank to discuss the financial situation in Maldives. The minister also discussed Maldives’ situation and ongoing projects funded by the Abu Dhabi Fund with the Director-General of the Abu Dhabi Fund Mohammed Saif Al Suwaidi.
Sources claim that the ministry is attempting to mortgage land in Male’ to issue a Sukuk, including Velaanaage, Olympus, and some Male’ schools. The government has previously acquired USD 300 million using Dharumavantha Hospital. The government is aiming to obtain a total of USD 1 billion through Sukuk issuance.
What is Sukuk?
Sukuk is a type of bond or financial instrument in compliance with Islamic Sharia. Bond sales require the seller to pay the buyer interest payments. Sukuk involves selling a financial certificate. The issuer must use the funds from the sale to invest in an asset that the Sukuk holder has a direct partial ownership interest in. Upon the duration’s expiration, the issuer must sell the asset and buy back the Sukuk from the Sukuk holder at an equal rate.
How will state land be used for Sukuk?
The government must transfer an asset valued over 51 percent of the Sukuk to a Special Purpose Vehicle (SPV). The SPV, in this instance, is a subsidiary company formed specifically for Sukuk. The government has previously obtained USD 300 million by transferring Dharumavantha Hospital under an SPV.