Project Name Accelerating Sustainable System Development Using Renewable Energy Project
Project Number 55191-001
Country / Economy Maldives
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0900-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Asian Development Fund US$ 41.50 million
Grant 0901-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Climate Change Fund US$ 500,000.00
Grant 0902-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Japan Fund for the Joint Crediting Mechanism US$ 6.20 million
Grant 0903-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Asia Pacific Climate Finance Fund US$ 3.80 million
Grant 0904-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Clean Technology Fund US$ 5.00 million
Loan 4344-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Concessional ordinary capital resources lending US$ 8.50 million
Loan 8454-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Clean Technology Fund US$ 10.00 million
Loan: Accelerating Sustainable System Development Using Renewable Energy Project
Private Sector US$ 23.00 million
Operational Priorities OP2: Accelerating progress in gender equality
OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
OP5: Promoting rural development and food security
OP6: Strengthening governance and institutional capacity
Sector / Subsector

Agriculture, natural resources and rural development / Agricultural policy, institutional and capacity development - Agricultural production - Rural market infrastructure

Energy / Energy sector development and institutional reform - Energy utility services - Renewable energy generation - solar - Renewable energy generation - wind

Gender Effective gender mainstreaming

The Maldives has significant renewable energy resources, i.e., the potential to generate solar power, ocean energy and in some pockets, wind power. To improve energy security, the government has committed to increase the use of renewable energy and promote energy efficiency. In 2014, the government has initiated two major programs (i) Preparing Outer Islands for Sustainable Energy Development (POISED) supported by the Asian Development Bank (ADB) to introduce solar photovoltaic battery-based hybrid systems in outer islands; and (ii) Accelerating Sustainable Private Investments in Renewable Energy supported by World Bank to mobilize private sector investments in solar photovoltaic in greater Male region.

The POISED project was approved by ADB's Board of Directors on 29 September 2014 and is one of the largest renewable energy sector interventions in Maldives. The project finances the replacement of inefficient diesel-based power generation grids in 160 outer islands of Maldives and in Male with renewable-energy-ready grid systems, energy management systems, upgraded distribution grids including online monitoring and supervisory control systems. These interventions will contribute to reducing the cost of electricity, the subsidy burden on the government budget, and emissions, and will diversify the power generation mix. ADB also approved a second additional financing on 30 October 2020 to expand the POISED project.

The POISED project has played a vital role in escalating the penetration of renewable energy and the project has installed more than 10.5 MW of solar photovoltaic capacity, 5.6 megawatt-hours of battery storage, and 11.6 MW of energy-efficient diesel generators and associated investments covering 70 outer islands across eight atolls. The implementation is in various stages for remaining 90 islands. The project also supported the preparation of renewable energy road map for the energy sector; initiating regulatory and net metering reforms; and improving the capacity of the Ministry of Environment (MOE), FENAKA, and STELCO focusing on renewable energy. The project also supports several gender initiatives such as (i) awareness campaigns on renewable energy covering island communities, women development councils, students, and government organizations; (ii) providing training and creating internship and employment opportunities for women in utilities; and (ii) developing gender inclusive renewable energy-based income generation activities through fisheries and other pilot interventions.

Project Rationale and Linkage to Country/Regional Strategy Maldives, with its 1,192 islands spread across 800 kilometers in the central Indian ocean, is one of the world's most geographically dispersed countries. This dispersion and small size of most inhabited islands make it extremely challenging to generate electricity centrally and distribute it through a comprehensive grid network to realize economies of scale. The Maldives has about 290 megawatts (MW) diesel generators, and more than 22 MW in renewable energy installations in 186 inhabited islands, and about another 144 MW diesel generators in resort islands. The cost of generation is unaffordable at $0.30-$0.70 per kilowatt-hour (kWh) (depending on the island) and requires government subsidies in excess of $62 million or 1% of gross domestic product (GDP) in 2019. Fossil fuel imports account for about 10% of the country's GDP, about half of this is for electricity generation. The heavy diesel dependence of Maldives also makes its carbon emissions per unit of electricity among the highest in the region. The State Electric Company (STELCO) and FENAKA Corporation Limited (FENAKA) are the main electricity utilities responsible for supplying electricity to the communities of inhabited islands, except for a few where island councils are still responsible for electricity supply.

Energy security and sustainable transition of electricity sector in Maldives improved (Strategic Action Plan 2019-2023, Government of Maldives).

Project Outcome
Description of Outcome

Share of renewable energy sources in power generation mix increased.

Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Private sector investments in renewable energy enhanced.

Solar IPP projects de-risked.

Renewable energy penetration using new technologies and net metering increased

Capacity of MOECCT, STELCO, FENAKA, and regulator strengthened.

Disaster-resilient, innovative, and gender- and socially inclusive renewable energy-based farming technologies pilot tested and promoted.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Individual consultants are envisaged similar to the ongoing POISED project to support the project implementation.
Procurement Estimated about 6 procurement Packages. This includes 2 packages battery energy storage systems including grid upgrades and energy management system, one package for wind - solar hybrid system , one package for ocean energy system, one goods package for rooftop solar system and one works contract to support rooftop solar installations.
Responsible ADB Officer Kolantharaj, Jaimes
Responsible ADB Department Sectors Group
Responsible ADB Division Energy Sector Office (SG-ENE)
Executing Agencies
Ministry of Finance (formerly Ministry of Finance and Treasury)
Concept Clearance 27 Jul 2021
Fact Finding 29 Aug 2022 to 02 Sep 2022
MRM 12 Apr 2023
Approval 12 Sep 2023
Last Review Mission -
Last PDS Update 12 Sep 2023
This page was generated from /projects/55191-001/main on 12 December 2023

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