The government has decided to provide a sovereign guarantee for a USD 300 million sukuk that the Bank of Maldives (BML) is seeking to issue to foreign investors, according to the proposed 2027 national budget.
The Finance Ministry noted that the guarantee will increase the state's total guaranteed debt and has revised its target for guaranteed debt from 10 percent of GDP by the end of 2028 to below 15 percent. Without the sukuk, guaranteed debt was projected at 7.5 percent of GDP next year; with it, the ratio is expected to rise to 13.5 percent.
Officials have said the sukuk is not intended to support the state budget or government cash flow. Instead, it is a joint initiative to expand private-sector investment and stimulate tourism-led growth, particularly in the northern and southern regions of the Maldives by increasing bed capacity and economic activity outside the Greater Male' area.
Finance Minister Hassan Zareer and earlier statements from the ministry have emphasised that the proceeds will help broaden the revenue base in the medium term. BML has been holding investor meetings across Asia, the Middle East and Europe for what would be its first international capital markets issuance.
The move comes as the country continues to manage debt obligations and seeks to strengthen financing for the tourism sector amid ongoing economic challenges.
