Completed Development AidData Chinese Aid

CDB suspends debt service payments for Seaplane Facilities at Velana International Airport Project between September 2020 and March 2021 (Linked to Record ID#54268)

Funder	China Development Bank (CDB)
Recipient Organization	Government of the Maldives\|Maldives Airports Company Limited (MACL)
Country	Maldives
Start Date	Jan 01, 2020
End Date	Jan 21, 2031
Duration	4,038 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`105517`

Grant Description

In response to the COVID-19 pandemic and the G20 Finance Ministers and Central Bank Governors meeting that took place on April 15, 2020 and on November 13, 2020, the Chinese Government agreed to work with other G20 members to implement the Debt Service Suspension Initiative (DSSI).

While China Eximbank signed debt suspension agreements during calendar years 2020-2021 and provided debt suspensions to certain loans, China Development Bank’s participation is voluntary and on a rare case-to-case basis.

In 2020, China Development Bank and Government of Maldives signed an agreement to suspend debt service payments under the loan that was issued for the Seaplane Facilities at Velana International Airport Project (see Record ID#54268) for the period between September 21, 2020 and March 21, 2021. As of December 2021, the loan's amount outstanding was $45,026,407, which included $660,000 of capitalized interest.

The repayment of deferred interest was scheduled commence on September 20, 2022.

📋 Staff Comments

AidData infers that this suspension is similar to the DSSI program based on other similar cases when China Development Bank had ad-hoc DSSI suspension agreements with other countries. CDB-led suspension agreements commonly do not have the same structure as China Eximbank and other lenders. This issue warrants further investigation.
DSSI agreements stipulate that ‘[t]he suspension interest on the amount outstanding under the Suspension Amount concerning each Loan Agreement shall be calculated on the basis of the actual number of days elapsed and a year of 360 days, from and including the Repayment Date/Repayment Date of Principal and Interest falling within the Suspension Period to the date of payment in full of the corresponding Suspension Amount, and shall be paid in arrears on each Interest Payment Date under the corresponding Loan Agreement.’ The borrower also agreed that (1) ‘it shall continue to perform all its obligations […] under the Loan Agreements as supplemented and amended by [the debt suspension agreement]’; (2) ‘it shall use the created fiscal space to increase social, health, or economic spending in response to the COVID-19 crisis […]’ and ‘work closely with the International Financial Institutions who are expected to put in place a monitoring system’; (3) ‘it shall disclose to the Lender all Public Sector Financial Commitments (as defined in the Government Finance Statistics Manual 2014 (GFSM2014)), respecting commercially sensitive information’; and (4) ‘it shall contract no new non-concessional debt during the Suspension Period, other than agreements under the DSSI’.

📚 Sources & References

Consolidated Financial Statements for the Financial Year 2021
State obtained loans deferred by China, discussions for easements still underway Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

All Grantees

Government of the Maldives|Maldives Airports Company Limited (MACL)

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