MANILA, PHILIPPINES (13 September 2023) — The Asian Development Bank (ADB) has approved a financing package of $50.5 million to expand renewable energy development in Maldives.
The package consists of $41.5 million from the Asian Development Fund (ADF), an $8.5 million concessional loan from ordinary capital resources, and a $500,000 grant from the Climate Change Fund. The ADF provides grants to ADB’s most vulnerable developing member countries.
“ADB has been assisting the Government of Maldives in its efforts toward energy transition and achieving its vision for the energy sector, anchored on three pillars: renewable energy, technology innovation, and energy efficiency,” said ADB Senior Energy Specialist Jaimes Kolantharaj. “This project directly supports energy transition by facilitating the shift away from diesel-based generation and supports the three pillars to help the country move toward a climate- and disaster-resilient clean energy source while ensuring its energy security.”
ADB will support the installation of grid-scale energy storage, energy management systems, and distribution grid upgrades in 20 outer islands. This will help attract private sector investments to establish rooftop, land, and floating solar photovoltaic facilities in these areas. ADB will also provide transaction advisory support to develop public–private partnerships for solar independent power producer (IPP) projects.
In addition, the project will introduce financial instruments to mitigate delayed payment risk and a performance-based incentive scheme for solar IPPs that will incentivize timely project delivery, reduce tariffs, and provide political risk insurance for private sector investments.
The project will install emerging technologies such as ocean-based floating solar panels, ocean energy devices, small wind turbines, and flow batteries, which have the potential for replication. Further, the project will support cross-sectoral interventions that will promote gender inclusivity by supporting renewable energy-based livelihood activities for women and disadvantaged households.
The project will strengthen the capacity of the Ministry of Environment, Climate Change and Technology, Fenaka Corporation Limited, and the regulator on financial management and sustainability of investments, design and implementation of emerging renewable energy systems and technologies, and project management. A women’s leadership program in these institutions and an internship program for women graduates will also be established.
The financing package will be supplemented with a $48 million cofinancing from the Asia-Pacific Climate Finance Fund, Clean Technology Fund, Japan Fund for the Joint Crediting Mechanism, and investments from the private sector. The government will provide a counterpart of $1.97 million.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.