Maldives Successfully Settles USD 500 Million Sukuk, Strengthens Debt Outlook

The Government of Maldives has completed the repayment of the USD 500 million Sukuk issued in 2021, disbursing a total of USD 524.68 million inclusive of profit payments, in a move aimed at reinforcing fiscal stability and improving the country’s debt profile.

In an official statement, the government confirmed that the repayment was financed through the Sovereign Development Fund and national reserves. The total amount settled includes USD 500 million in principal along with USD 24.68 million in accumulated profit. The authorities noted that the repayment is expected to support a gradual reduction in the country’s debt-to-GDP ratio.

The Sukuk, issued in the international market in 2021, was used to refinance a USD 250 million bond. Officials stated that the issuance took place during a period of economic uncertainty, at elevated market rates and without a clearly defined repayment framework. Since late 2023, the current administration has focused on implementing policy measures to meet such obligations while preserving macroeconomic stability.

A key component of this strategy has been the strengthening of the Sovereign Development Fund, established to support debt servicing. The government introduced mandatory foreign currency allocations to the fund and revised the Airport Development Fee in 2024, directing additional proceeds to the fund while ensuring Maldivian travellers were not impacted.

These measures have contributed to a build-up in external buffers. The foreign currency balance of the Sovereign Development Fund has exceeded USD 350 million for the first time, while official reserves rose above USD 1.3 billion at the end of March, marking a record high.

Separately, the government has also finalised arrangements with the Abu Dhabi Fund to roll over a USD 100 million bond maturing this month, helping to ease immediate external financing pressures.

The authorities stated that maintaining the supply of fuel, essential goods and services remains a priority, alongside sustaining economic activity. Discussions with international financial institutions are ongoing to secure further financial support where required.

The government reiterated its commitment to fiscal consolidation, with a medium-term objective of placing public debt on a downward trajectory while safeguarding economic stability in the face of global uncertainties.