Abu Dhabi Fund for Development (ADFD), the leading national entity for development aid, has extended a $50-million (Dh183.65 million) concessionary loan to the Maldivian government to develop the Velana International Airport in Male.

The development project includes the construction of a new 3,400-metre runway with a breakwater and rehabilitation of the old runway. In addition, the funding will help build a new west passenger terminal and a maintenance building, and complete phase-1 works of the south terminal, reported Wam, the Emirates official news agency.

The loan agreement was formalised in the presence of Vice President, Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, during the official visit of Abdulla Yameen Abdul Gayoom, President of the Maldives.

Mohammed Saif Al Suwaidi, director-general of ADFD, said, "This new collaboration further solidifies the strong and close bilateral ties shared between the UAE and the Maldives. Over the past four decades, ADFD has financed infrastructure, telecommunications, transport, housing and energy projects in the Maldives valued at more than AED109 million.

"Our loan aims to promote socio-economic development in the Maldives through upgrading the airport’s facilities and expanding its operating capacity to 26 aircraft in order to cope with the steady growth of the tourism sector. As an added benefit, this crucial project will go a long way in creating new jobs and reducing unemployment."

Mohamed Saeed, Maldivian Minister of Economic Development, praised the UAE’s sustained support for the national development goals of the Maldives. Furthermore, he commended ADFD for its strategic approach to development and for its efforts in tailoring funding mechanisms across key socio-economic sectors to drive lasting growth in developing countries.

Moreover, the loan covers expansion of phase-1 of the cargo loading and storage areas spanning approximately 6,000 sq m, relocation of existing infrastructure outside the project area, as well as the construction of private jet facilities, a civil defence station and a mosque.

In September 2017, ADFD extended an Abu Dhabi-government grant worth Dh18.4 million ($5 million) to the Maldivian government. The funds seek to support the balance of payments in the island country and improve its overall economic situation.

Since its inception in 1971, ADFD has financed development projects to the tune of Dh77 billion in more than 80 countries around the world through concessionary loans and Abu Dhabi-government grants.