Former Finance Minister Ibrahim Ameer has urged the Ministry of Finance and the Maldives Monetary Authority (MMA) not to follow President Mohamed Muizzu’s directive to use state reserves for an advance payment on the Rasmalé dredging project, warning it could bankrupt the nation.
Speaking at a press conference on Monday on behalf of the opposition Maldivian Democratic Party’s (MDP) Economic Committee, Ameer, who chairs the committee, criticised the government’s plan to fund the stalled project through an advance from the country’s usable reserves.
Ameer questioned the legality and prudence of using the MMA’s reserves in this manner, noting that the funds are not being channelled to the government but instead to a private company.
He also raised doubts over how Greater Malé Financial District Limited — a newly formed and largely inactive state-owned enterprise — plans to obtain a US$300 million loan, given that the company has not carried out any actual work to date.
The project, part of the Rasmalé urban development initiative, was initially to be contractor-financed without public expenditure.
The Muizzu administration changed its financing strategy in July, instructing the Finance Ministry to raise loans through the three state-owned firms: US$300 million from Greater Malé Financial District Limited, US$200 million from Maldives Airports Company Limited, and US$100 million from State Trading Organisation.
A letter from the President’s Office, signed by Principal Secretary Mohamed Shahid and dated 1 July, also authorised the use of MMA’s usable reserves or the US$400 million currency swap facility with India to make the advance payment.
Ameer warned that the government is unlikely to secure the loans and, as a result, the advance taken from the reserves will not be repaid. He said this would lead to a direct loss of public funds, as both the MMA governor and technical staff are aware that the promised repayment will never materialise.
The former minister accused the MMA of enabling politically motivated decisions that could compromise the country’s economic stability. “The MMA is acting in a way that affects the financial and economic affairs of the Maldives,” he said, expressing confidence that professional staff at the central bank would not support the use of reserves for such purposes.
The government has yet to disclose where the US$600 million in loans will come from or reveal any interest rates or repayment terms. The lack of transparency has raised concerns amid the Maldives’ weakening credit status.
Moody’s rates the Maldives at ‘Caa2’ and Fitch at ‘CC’—both deep in junk territory—raising the likelihood that any large-scale borrowing would come with high costs and stringent conditions.
As of end-May, the country’s usable reserves stood at US$217.9 million, with updated June figures yet to be published. If tapped, this would mark the first known instance of the Indian currency swap facility—originally set up under the SAARC Currency Swap Framework for short-term liquidity support—being used for development financing. Analysts warn the move may require renegotiation with the Reserve Bank of India.
Launched in December 2023, the Rasmalé project is being carried out by Mid Free Zone Company, a joint venture of five state-owned firms. Progress has been sluggish, with only a small portion of the planned 1,100 hectares reclaimed.
Of the 12 reclamation sites, nine have been awarded to Mohan Mutha Exports (MME) and China Railway Construction Corporation (CRCC), while China Harbour Engineering Company (CHEC) is handling two. Site D, the largest at 264 hectares and assigned to MME, remains largely untouched.
The government has not confirmed the total loan amount, but Construction Minister Abdulla Muththalib previously estimated the cost of reclaiming 1,100 hectares of land to range between US$500 million and US$700 million.