ADB approves $50 million emergency loan to Maldives

The Asian Development Bank has approved a $50 million loan as emergency assistance to the Maldives to strengthen its energy security in view of fuel shortage amid West Asia conflicts, media reports said.

The Maldives Government has been facing challenges in managing fuel and tourism-related expenditure because of the global hike in fuel prices and lowered number of tourist arrivals due to the conflicts in West Asia, according to news portal The Edition.

Around 94 per cent of electricity generation in the Maldives relies on imported fuel, while desalination plants also depend on fuel to operate. Therefore, the country has limited alternatives if access to fuel becomes difficult, the state-run Public Service Media (PSM News) said on Thursday. The Asian Development Bank (ADB) said the loan will support the ‘Energy Security Emergency Assistance Project,’ which aims to strengthen the Maldives’ energy security.

The loan will help facilitate the import of fuel and ensure reliable electricity and water services in the country, it added.

ADB President Masato Kanda said the impact of a war should not be allowed to reach the daily lives of families or disrupt a country’s borders.

Kanda further said that although ongoing conflicts around the world have driven up the prices of goods, ADB is working to aid in reliable electricity and water services for the people of the Maldives, the PSM News said.

The assistance provided through the ADB loan will facilitate the import of diesel needed to ensure uninterrupted electricity and water services, transport food and medical supplies, move people and goods between islands, and provide waste management services, the report said.

The bank has been constantly assisting the Maldives through loans for various development projects, The Edition said, adding, recently, it also provided a $4 million loan for the Enhancing Climate Resilience and Food Security Project in 2024.

Earlier, the ADB also issued a USD 18 million loan in 2023 and a USD 45 million loan in 2020 for other energy-related projects.

As of mid-August, the Maldives has secured a USD 40 million loan from the OPEC Fund for International Development (OFID) and a USD 40 million loan from the International Development Association, The Edition added.

The World Bank has also provided USD 40 million in support for the same purpose, PSM News added.