India, Maldives sign $400 mn Line of Credit agreement for connectivity project

India and Maldives concluded a $400 million Line of Credit (LoC) agreement for the implementation of the Greater Male Connectivity Project (GMCP). The Dollar Credit Line Agreement was signed between Maldives Finance Minister and EXIM Bank General Manager Nirmit Ved. The Indian High Commission in the Maldives tweeted that the project would be a national economic engine connecting Hulhumalé, Hulhule and Malé with the proposed Gulhifalhu Port and Thilafushi.

In August, External Affairs Minister S Jaishankar had announced that it will fund the implementation of GMCP through a new Line of Credit of $400 million and $100 million grant. The single-largest connectivity and infrastructure project in the island nation will connect Malé with three neighbouring islands through a bridge-and-causeway link spanning 6.7 kilometres. 

The announcement of funding came after Jaishankar’s meeting with Foreign Minister of Maldives Abdulla Shahid through video conference. The Union minister had also announced the start of regular cargo ferry service between the two countries to boost trade and commerce. After the agreement was finalised, Shahid thanked Indians for partnering in delivering the project and said that it will lead to greater possibilities. 

“It is the gateway to a more developed & economically resilient nation,” tweeted Shahid.

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Financial assistance

On September 20, the Indian government handed over $250 million to the Maldives as financial assistance to support the economic challenges arising from the outbreak of the COVID-19 pandemic. The financial aid was provided in response to an urgent request made by the President of Maldives, Ibrahim Mohamed Solih, to Prime Minister Narendra Modi for reducing the economic and financial impact due to the outbreak of the COVID-19 pandemic.

Maldives Foreign Minister had then highlighted that India has always been a steadfast friend in times of need and the first to respond to any crisis in the island nation. He further noted that the financial assistance would help to finance a part of the revenue gap caused due to the halt in the tourism sector and help to meet the immediate financial requirements faced by the government.

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(Image: Twitter / @HCIMaldives)