The Maldives Government utilised USD 350 million from the Sovereign Development Fund (SDF) towards the settlement of its USD 500 million sovereign Sukuk, highlighting the administration’s preparations to meet major external debt obligations while maintaining fiscal discipline, Minister of Finance and Public Enterprises Hassan Zareer has said.
Speaking during the tenth episode of the public “Ahaa” forum, organised jointly by the President’s Office and Public Service Media, Minister Zareer said the Government entered the current fiscal period with a clear strategy to manage substantial debt repayments under the direction of President Dr Mohamed Muizzu. The administration has continued to focus on meeting its financial commitments within the approved State budget without resorting to a supplementary budget.
According to the Minister, USD 350 million required for the Sukuk settlement was drawn from the Sovereign Development Fund, while a further USD 175 million was sourced from official reserves. The combined allocation covered the Sukuk repayment and associated financial obligations. The USD 500 million sovereign Sukuk had originally been issued in 2021.
The Sovereign Development Fund has played an increasingly important role in the Government’s debt management framework. Foreign currency revenues, including designated tax and fee collections, have been directed towards strengthening the fund, allowing the Government to build resources specifically for major external financing requirements without depending entirely on the Maldives Monetary Authority’s official reserves.
Minister Zareer said preparations had resulted in a record level of funds being accumulated in the SDF by April, while Government policies also contributed to strengthening the country’s official reserve position. The approach has provided the administration with greater capacity to meet large foreign currency obligations while preserving financial stability.
The Government has now executed approximately USD 1.42 billion in debt repayments covering liabilities originating from different periods. Major commitments include the USD 500 million Sukuk and the USD 400 million currency swap arrangement undertaken during President Dr Mohamed Muizzu’s state visit to India in 2024.
The scale of repayments reflects one of the Government’s most significant periods of external debt servicing in recent years. Minister Zareer said successfully meeting these obligations is expected to reduce repayment pressure in the years ahead and strengthen confidence in the Maldives’ fiscal management.
He also highlighted improving international confidence in the country’s financial outlook, noting that stronger fiscal management and debt servicing performance have supported more favourable consideration from financial institutions when assessing financing opportunities for the Maldives.
Alongside debt management, the Government is pursuing broader reforms aimed at reducing unnecessary expenditure and improving the efficiency of State-owned enterprises. President Dr Mohamed Muizzu has announced the restructuring of several companies, including the dissolution of Fenaka Corporation Limited and the integration of its utility operations into the State Electric Company Limited (STELCO).
The Road Development Corporation is also being dissolved, with its operations being consolidated under the Maldives Transport and Contracting Company (MTCC). The restructuring is intended to reduce operational duplication, strengthen corporate efficiency and support more sustainable management of public resources while maintaining essential services.
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