Subscription Form

The signing ceremony between Finance Ministry and ADB - Photo: Finance Ministry

MALÉ: The Maldivian government has signed an agreement with the Asian Development Bank (ADB) for a $50 million (MVR 772.5 million) loan to finance essential fuel imports.

The agreement was signed by Minister of Finance Hassan Zareer on behalf of the government, while Managing Director Shimad Ibrahim signed the project agreement for the State Trading Organization (STO). Dr. Thiam Hee Ng, Head of Regional Cooperation and Integration Unit, signed on behalf of the ADB.

Protecting Against Global Price Spikes

According to the Ministry of Finance, the loan aims to ease financial burdens caused by rising global oil prices linked to conflicts in the Middle East.

Titled the Energy Security Emergency Assistance Project, the agreement provides key support to keep daily operations running smoothly:

• Electricity and Water: Procurement of diesel required for electricity generation and water production.
• Essential Transport: Fuel supply for shipping food, medical equipment, and waste management.
• Inter-Atoll Transport: Fuel support for passenger and cargo transport between islands.

The ADB noted that diesel powers 94 percent of electricity generation in the Maldives.

Heavy Financial Burden

Global Middle East conflicts have caused fuel import costs to spike significantly. Statistics from the Ministry of Climate Change, Environment and Energy show that monthly spending on fuel imports jumped from $50 million to $116 million—an increase of nearly 110 percent.

The country requires roughly 8,000 barrels of diesel daily for power generation, totaling about 2.9 million barrels annually. Last year, the Maldives spent close to MVR 10 billion on fuel procurement alone.

This new funding complements a $40 million package provided by the World Bank in May, bringing total international assistance for Maldivian fuel imports to $90 million.