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Maldives: World Bank Supports Tsunami Recovery Efforts

News Release No:2005/368/SAR

In New Delhi: Geetanjali Chopra (91-11) 51479286

In Washington, D.C.: Benjamin Crow (202) 473-5105


MANILA, March 17, 2005—The World Bank today announced the approval of a total of US$14 million to the Maldives to assist the country rebuild in the aftermath of the tragic tsunami that devastated the nation on December 26, 2004. The Maldives Post-Tsunami Emergency Relief and Reconstruction Project will assist the government in its efforts to provide social services, restore lost livelihoods, and continue to build capacity to implement the reconstruction and rehabilitation program.


Total financing needs for the Maldives’s recovery and reconstruction are estimated to be approximately US$304 million, according to the preliminary tsunami disaster needs assessment released last month by the World Bank in partnership with the Asian Development Bank and the United Nations. A financing plan is currently under preparation by the Ministry of Finance and Treasury, which will identify the sectors and activities in which reconstruction financing is needed and funding sources available.


Alastair McKechnie, World Bank’s Country Director for the Maldives, said this project will help people get back on their feet as quickly as possible. “The tsunami was a nationwide disaster of unprecedented proportion. The physical damage has led to severe human suffering inasmuch as large segments of the population have lost their dwellings, lifetime savings, and sources of livelihood. The negative impact on the economy, which is largely based on tourism, fisheries, and agriculture, is substantial. This assistance will help jump-start economic activity and employment at the local level.”


The tsunami impact on the Maldives was widespread. Tidal waves, ranging from 4 to 14 feet, were reported in all parts of the country. There have been 83 confirmed deaths with another 25 people missing and feared dead. Over 1,300 people suffered injuries. Thirty-nine islands were significantly damaged and nearly one third of the Maldives’s 300,000 people was severely affected. Nearly 12,000 people have been displaced from their islands, and another 8,500 had to be temporarily relocated, displacing approximately 7 percent of the population. The force of the waves caused widespread devastation of shelter and infrastructure in the atolls. The subsequent flooding wiped out electricity on many islands, destroying communication links with most atolls, and destroyed about 15 percent of the islands’ water supply.


The project, approved by the World Bank, has three components:

Restoration of Livelihoods: This component will consist of one-time cash grants from the government to families seriously affected by the tsunami to help them cover immediate expenses of food and household essentials. Also included is a program to restore income-generating assets for micro- and small-scale enterprises in the affected islands, assisting individuals restart their businesses and thereby restore economic activity.

Increased School Capacity: The population displaced from islands made uninhabitable by the tsunami will receive assistance for additional schools and facilities to accommodate the increasing student population.

Technical Skills for Implementing Agencies: All levels of government will see increases to their workloads as a result of post-tsunami reconstruction plans. This component will temporarily increase the capacity of implementing ministries to manage the additional workload by financing project management specialists.


The Government of Maldives has set up a Tsunami Relief and Rehabilitation Fund (TRRF) to be implemented by the Ministry of Finance and Treasury. The TRRF will receive resources from local and international sources—including the World Bank grant and credit approved—and channel these resources to expenditures for relief, reconstruction, and management activities.


“By providing resources in a timely and transparent manner through the government’s Tsunami Relief and Rehabilitation Fund,the World Bank has demonstrated a positive example of harmonizing donor procedures and avoiding overburdening the limited managerial resources of the government,” said Qaiser M. Khan, World Bank team leader for this operation.


Of the US$14 million approved, US$5.6 million is in the form of a grant from the International Development Association (IDA), the World Bank’s concessionary lending arm, and the remaining US$8.4 million is a credit also from IDA, and carries a 0.75 service fee and is payable in 40 years, including a 10-year grace period.


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