The government has deployed USD 350 million from its Sovereign Development Fund towards the settlement of a USD 500 million sovereign Sukuk, Hassan Zareer, the Minister of Finance And Public Enterprises, announced, as part of an overarching fiscal strategy to manage state expenditures entirely within the existing state budget without introducing a supplementary budget.
The financial disclosures were outlined during the tenth episode of the public 'Ahaa' forum, a broadcast organised jointly by the President’s Office and Public Service Media. The administration entered the fiscal year with an explicit objective to fulfil record debt obligations under the strategic direction of President Dr Mohamed Muizzu, Minister Zareer noted.
To meet the USD 500 million Sukuk redemption, the government drew USD 350 million directly from the Sovereign Development Fund while sourcing an additional USD 175 million from official reserves. Targeted monetary measures had channelled foreign currency tax revenues straight into the fund, which operates independently from the central bank reserves held by the Maldives Monetary Authority to cushion economic shocks and repay major development loans.
"By April of this year, a record amount of funds had been deposited into this fund," Minister Zareer stated, describing the accumulation as part of preparations for debt settlement, alongside policies that lifted official reserves to record levels by March.
Total debt repayments executed by the administration have reached USD 1.42 billion, covering liabilities maturing this year that originated across different historical periods. Those commitments include the USD 500 million Sukuk issued under the previous government in 2021, as well as a USD 400 million currency swap facility executed during President Muizzu’s state visit to India in 2024. The two-year expenditure surpasses the approximately USD 415 million settled between 2013 and 2018 and the USD 948 million disbursed between 2018 and 2023.
"The state's credit rating improves," Minister Zareer observed of the ongoing fiscal adjustments, noting that financial institutions "are giving very favourable consideration to extending financial facilities to the state."
To enforce wider fiscal discipline and curb annual deficits without seeking supplementary allocations, executive authorities are executing structural reforms across state-owned enterprises. Under an executive decision by President Muizzu, Fenaka Corporation Limited is set to be dissolved with its utility operations transferred to the State Electric Company Limited (STELCO), while the Road Development Corporation (RDC) will be wound down and merged into the Maldives Transport and Contracting Company (MTCC).