Urbanco, the state-owned housing development entity, is facing scrutiny for the withdrawal of two loans totalling MVR 200 million from the Maldives Islamic Bank (MIB) under a sovereign guarantee during the September presidential election.

This revelation came to light during a meeting of the Parliament Public Accounts Committee on Tuesday. According to the disclosed information, the purpose of these loans was to finance Urbanco’s expenses during a crucial period.

The timing of these loans has raised questions regarding the alleged use of state resources for campaign purposes by the then incumbent government. The blurred distinction between state-owned entities (SOEs) utilising state resources during the campaign period was a subject of concern not only for the opposition at the time but also for international election observers.

The loan facility comprises MVR 100 million and US$6.6 million (equivalent to MVR 99.8 million). The administration of former President Ibrahim Mohamed Solih provided a sovereign guarantee for this loan on 20 September, a date situated between the two rounds of the presidential election.

Under the terms of the agreement, the loan must be repaid within two years and six months, with an interest rate of seven percent applied to the MVR 100 million portion. Additionally, there is a processing fee of MVR 1 million, and when factoring in projected expenses related to servicing the loan, the total repayment amount is expected to reach MVR 111 million.

The anticipated timeline for full loan repayment extends to 2025. In the case of the US$6.6 million portion, it carries an interest rate of 7.68 percent. However, the Public Accounts Committee has raised concerns about potential inaccuracies in the loan-related information. Consequently, they have decided to inform the Finance Ministry’s secretariat to validate the provided data.