Saturday
20th Apr 2024
Dhivehi Edition
Finance Minister Ibrahim Ameer. Photo: Majlis
Finance Minister Ibrahim Ameer's letter detailing the terms of the loan taken by the government from India’s Exim Bank to build hospitals in 4 islands has been leaked.
Numerous documents were shared with TMJ by a senior official at the finance ministry, detailing the loan breakdown as well as documents of communication between the ministry and the company tasked with constructing the hospitals.
According to a letter signed by Minister Ameer, addressed to Exim Bank, Maldives hopes to acquire financing of USD 48.65 million which will cover 85 percent of the total cost for the hospital project. This is MVR 750 million. The letter stated that the project is estimated to cost a total of USD 57 million.
Hospital Loan Breakdown Figures:
Loan Amount: USD 48.65 Million
Interest: LIBOR (6 months) and 325 bpa per annum
Commitment Fee: 0.5 percent
Management Fee: 0.5 percent
Grace Period: 3 years
Maturity Period: 15 Years
The state is set to commence repayment in 2026 for the loan acquired earlier this year and will have to pay it off by the year 2041.
Upon addition of LIBOR and 325 bpa, the total interest rate comes to 7 percent, which is generally considered to be a higher interest rate. The usual interest rates for concessional loans such as this ranges between 3 percent and 4 percent. Furthermore, even commercial loans taken during the former President Abdulla Yameen Abdul Qayyoom’s administration had interest rates lower than 7 percent.
Accounting the interest rates, at the time of full repayment, the state would have paid USD 30 million as interest which constitutes to 462 million in Maldivian Rufiyaa.
According to the agreed upon terms, India is to acquire 85 percent of the materials and labor required for the completion of the project.
The project calls for hospitals to be built in HA. Dhidhdhoo, R. Alifushi, Dh. Kudahuvadhoo and GA. VIlingili.
Breakdown of costs for each hospital:
Dhidhdhoo Hospital: USD 14.24 Million
Kudahuvadhoo Hospital: USD 14.24 Million
GA Atoll Hospital: USD 14.24 Million
Alifushi Hospital: US 12.11 Million
Telecommunications Consultants India Limited (TCIL), the company tasked with the completion of the hospitals project, had said that the hospitals were to be prefabricated, light and medium duty hospitals.
While President Ibrahim Mohamed Solih’s administration continues to accumulate debt from India, not many details pertaining to the loan have been released voluntarily. Most news outlets have reported on information obtained through unofficial sources.