Asian Infrastructure Investment Bank (AIIB), on Wednesday, announced the bank’s Board of Directors, has approved a loan of USD 7.3 million to Maldives, to support the country’s health response to the coronavirus pandemic.

It marks the first loan to be issued to Maldives by AIIB, a multilateral development bank launched at the initiative of China.

According to AIIB, the project is co-financed with the World Bank, and will immediately enable the Maldivian government to scale up its efforts to provide protection to medical professionals through the provision of personal protective equipment and strengthen health systems through boosting testing capabilities.

AIIB expects the project will improve health protection to at-risk groups, particularly the elderly and people with underlying medical conditions, as well as public health agencies engaged in the national coronavirus response efforts.

The bank noted Maldives’ high dependence on the international tourism market, making the extent of the socioeconomic impact of the coronavirus pandemic on the country uncertain at this point.

Tourism is Maldives main economic driver, and most tax and non-tax revenues originate directly or indirectly from tourism.

“Our first project financing in the Maldives comes at a critical time as the country navigates the impact of the global health crisis,” said AIIB’s Vice President, Investment Operations, D.J. Pandian. “AIIB is strongly committed to ensuring that the government has the necessary resources and capacity to protect the most vulnerable in the country.”

The project was approved under a new Special Fund Window (SFW) as part of AIIB’s COVID-19 Crisis Recovery Facility (CRF). AIIB expects the additional financing will allow the Maldives to buy down the interest rate to reduce the financial burden of the loan.

AIIB’s SFW is only available to International Development Association members to help them raise affordable funds to fight the coronavirus pandemic.

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