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Line of credit

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    16th Aug, 2020
  • India announced a slew of new connectivity measures for the Maldives, including air, sea, intra-island and telecommunications in an effort to help the Indian Ocean Islands deal with the economic impact of the COVID-19 pandemic.
  • The Line of Credit is not a grant but a ‘soft loan’ provided on concessional interest rates to developing countries, which has to be repaid by the borrowing government.
  • The LOCs also helps to promote exports of Indian goods and services, as 75% of the value of the contract must be sourced from India.
  • India will support the implementation of the GMCP in Maldives, through a financial package consisting of a grant of USD 100 million and a new Line of Credit (LoC) of USD 400 million.
  • Initiatives announced:
    • Air connectivity “bubble” for travel.
    • A direct ferry service.
    • A submarine cable for telecom connectivity.
    • Assistance for the Greater Male Connectivity project (GMCP) to connect Male to three neighbouring islands- Villingili, Thilafushi and Gulhifahu islands.
  • The GMCP would be the “largest civilian infrastructure project in Maldives”

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