Regions and Countries

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p. 9 of 19 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Infrastructure B. Social Infrastructure C. Governance Dimensions of ADB Operations D. Gender Dimensions of ADB Operations E. Private Sector Operations IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Maldives : III. Sector Strategies

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A. Infrastructure

1. Energy

28. ADB has made significant contribution through its loan and TA program to help meet the electricity demands in Malé and to undertake institutional development of the power sector. The Third Power System Development Project¹⁴ has been geared to improving the reliability of the power supply in Malé. The Government’s Fifth National Development Plan and ADB’s poverty reduction strategy both call for the shifting of future development projects in the sector to the outer atolls, where the majority of the country’s poor reside and the economic and social development has been constrained by poor electricity supply. While significant progress has been made in atoll electrification, about 28 percent of the atoll population reportedly have electricity for 6 hours or less each day: the quality is poor and the costs are usually high. This restricts their income earning activities. Planned assistance by ADB during 2001-2003 includes a loan project for Outer Islands Electrification in 2001, to be prepared by a PPTA¹⁵ being implemented in 2000, aiming to provide environmentally sustainable sources of energy for the outer island population and to improve governance of the sector.

2. Transport

29. In the absence of comprehensive strategy and planning in the transport sector, the sector development has been undertaken in a relatively ad hoc manner, which has resulted in the inefficiency of investment projects and the lack of coordination in external assistance. The Government expressed its strong desire to formulate the first National Transport Master Plan, covering international sea transport and inter-islands shipping, air transportation networks and road transport. An ADTA for Transport Master Plan is included in 2001, to assist the Government to develop a master plan for the transport sector together with a strategic environmental impact study. To further support its regional development plan by providing basic infrastructure and social services to create economic opportunities for the island population, a PPTA for Islands Roads Development has been included in 2002, focusing on selected regional development centers for synergy effect on regional development impact.

3. Finance and Industry

30. One of the major deficiencies in the financial sector is non-availability of long-term finance. Lending capacity of domestic commercial banks is not adequate to meet the financial needs of the private sector, especially resort development projects in the tourism subsector. The importance of capital market developments as an alternative measure to mobilize medium and long-term financing of capital investment has been recognized. ADB is conducting a comprehensive review of the financial sector and has formulated a paper on Strategic Thrust on the Financial Sector for Maldives.¹⁶ ADB will continue to dialogue with the Government on possible assistance to further reforms in the financial sector in future.

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