Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 22 Aug 2014

Project Name Preparing Outer Islands for Sustainable Energy Development Project
Country Maldives
Project/Program Number 46122-003
Status Proposed
Geographical Location
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Energy
Subsector Conventional energy generation
Energy efficiency and conservation
Renewable energy generation - solar
Strategic Agendas Environmentally sustainable growth (ESG)
Inclusive economic growth (IEG)
Drivers of Change Gender equity and mainstreaming (GEM)
Governance and capacity development (GCD)
Knowledge solutions (KNS)
Partnerships (PAR)
Private sector development (PSD)
Gender Equity and Mainstreaming Categories Category 2: Effective gender mainstreaming (EGM)

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Grant-Asian Development Fund38,000
Counterpart 14,000
TOTAL US$ 52,000

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment B
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Issues

Environmental Aspects
The project is classified environment category B and the initial environment examinations for the sample projects were prepared following ADB?s Safeguard Policy Statement (2009), the government?s environmental impact assessment guidelines, and related national policies and legislation. Public consultation and information disclosure requirements have been met.
Involuntary Resettlement
The project is classified as category B for both involuntary resettlement and C for indigenous peoples. Due diligence conducted on sample subprojects brought out no resettlement impacts and no adverse impacts on indigenous groups. A resettlement framework has been prepared for the project. .
Indigenous Peoples
For all the subsequent subprojects that have resettlement impacts, resettlement plans will be prepared in accordance with the safeguard provisions in the resettlement framework. If any changes or additional land requirements or involuntary resettlement impacts are identified during implementation, a resettlement plan will be prepared or modified according to the applicable laws referred to in the resettlement framework. ADB?s prior approval will be obtained before further implementation of the relevant subproject

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

Description

Project Rationale and Linkage to Country/Regional Strategy

The Maldives, located 750 km south west of Sri Lanka, consists of 26 atolls with a total land area of about 300 sq. km. Nearly half the country's population live on the outer islands. The Maldives has about 100 MW of installed diesel generation capacity on the inhabited islands and another 100 MW on the tourism islands. Each outer island is electrified with its own diesel powered mini grid system and while there is 100% access to electricity, supply is not reliable and expensive. The cost of diesel power is unaffordable at 30-70 cents/kWh and requires government subsidies of about $25 million annually. In 2011, Maldives spent $261 million to import 316 thousand tons of oil equivalent (toe) of diesel or nearly 7% of GDP on fuel imports for electricity generation. Electricity sector subsidies are one of four identified areas for government expenditure management. The 100% diesel dependence of Maldives also makes its carbon emissions per unit of electricity among the highest in the region. The solution to the above problem is to develop renewable energy based generation, the cost of which is expected to be significantly lower than existing diesel based power generation. The transition to renewable energy based systems has sound economic rationale. The Government's effort to increase electricity production from indigenous sources, including solar and wind power, to enhance energy security will reduce the pressure on the balance of payments and improve the fiscal position. The development of renewable energy projects is in line with the Government's goal of going carbon neutral by 2020. To support the Government's goal, the SREP Investment Plan over 2013-2017 was endorsed by the SREP sub-committee on 31 October 2012 to initiate the transformation of the energy sector. Based on the priority requirements identified during the SREP investment planning process, the government developed an investment plan to initiate the transformation from 100% diesel based power systems to renewable energy systems by focusing on about 40 outer islands between 2013-2017 through a public-private partnership approach. SREP funds would be channeled through multi-lateral development banks and would be leveraged with financing from other sources including the private sector. Private sector development in the renewable energy in the Maldives is constrained by investment perception, nascent regulatory structure and inadequate public sector infrastructure to suitably integrate private sector renewable energy. The electricity sector is regulated by the Maldives Energy Authority that has received support on the energy sector regulatory framework from World Bank and capacity building on technical codes and tariff mechanisms under ADB CDTA. Future areas of support include coordination on model power purchase agreements, identification of sites for private investment, structuring of business models including bundling of outer islands for scale benefits and coordinating on the private sector risk guarantees. The Project is aligned to ADB's Strategy 2020 of supporting sustainable energy growth, Energy Policy 2009 and is included in the Maldives COBP for 2013-2015. Based on the government's investment plan for the outer islands and the characteristics of the electricity systems, a sector lending approach is proposed to be adopted. Review of policies, institutions, and coordination with other donors would be undertaken during the preparation phase including appraisal for representative sub-projects.

Development Impact

Enhanced renewable based sustainable energy sector in the Maldives.

Project Outcome

Description of Outcome
Reduction of diesel usage for electricity generation in outer islands of the Maldives.
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
Physical 1. Renewable energy ready mini grid systems developed for Outer Islands. Non-Physical 2. Enhanced capacity of PMU and Feneka to implement RE mini grid.
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing
Consulting Services
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/46122-003/business-opportunities

Timetable

Concept Clearance 10 Dec 2012
Fact-finding 03 Apr 2014 to 11 Apr 2014
Management Review Meeting 19 May 2014
Approval
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Grant -

Contacts and Update Details

Responsible ADB Officer Priyantha D.C. Wijayatunga (pwijayatunga@adb.org)
Responsible ADB Department South Asia Department
Responsible ADB Divisions Energy Division, SARD
Executing Agencies

Links

Project Website http://www.adb.org/projects/46122-003/main
List of Project Documents http://www.adb.org/projects/46122-003/documents