Maldives : Accelerating Sustainable System Development Using Renewable Energy Project

Sovereign Project | 55191-001

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.

Project Details

Project Name
Accelerating Sustainable System Development Using Renewable Energy Project
Project Number
55191-001
Country / Economy
  • Maldives
Project Status
Active
Project Type / Modality of Assistance
  • Grant
  • Loan
Source of Funding / Amount
Grant 0900-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Asian Development Fund US$ 41.50 million
Grant 0901-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Climate Change Fund US$ 500,000.00
Grant 0902-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Japan Fund for the Joint Crediting Mechanism US$ 6.20 million
Grant 0903-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Asia Pacific Climate Finance Fund US$ 3.80 million
Grant 0904-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Clean Technology Fund US$ 5.00 million
Loan 4344-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Concessional ordinary capital resources lending US$ 8.50 million
Loan 8454-MLD: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
Clean Technology Fund US$ 10.00 million
Loan: Accelerating Sustainable System Development Using Renewable Energy Project
Source Amount
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
Description

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.
Impact

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.

Contact

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)

Timetable

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

Funding

Grant 0900-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 43.47
ADB 41.50
Counterpart 1.97
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Grant 0901-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 0.50
ADB 0.50
Counterpart 0.00
Cofinancing 0.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Grant 0902-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 6.20
ADB 0.00
Counterpart 0.00
Cofinancing 6.20
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Grant 0903-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 3.80
ADB 0.00
Counterpart 0.00
Cofinancing 3.80
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Grant 0904-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 5.00
ADB 0.00
Counterpart 0.00
Cofinancing 5.00
Grant Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Loan 4344-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 8.50
ADB 8.50
Counterpart 0.00
Cofinancing 0.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

Loan 8454-MLD

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Sep 2023 12 Dec 2023 16 Feb 2024 30 Sep 2028 - -
Financing Plan
  Total (Amount in US$ million)
Project Cost 10.00
ADB 0.00
Counterpart 0.00
Cofinancing 10.00
Loan Utilization
  Date ADB Others Net Percentage
Cumulative Contract Awards 06 Jun 2024 0.00 0.00 0%
Cumulative Disbursements 06 Jun 2024 0.00 0.00 0%

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

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.

Title Document Type Document Date
Grant Agreement (Special Operations) for Grant 0900-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Grant Agreement Dec 2023
Loan Agreement (ADB Clean Technology Fund) for Loan 8454-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Loan Agreement (Ordinary Resources) Dec 2023
Grant Agreement (Externally Financed - Asia-Pacific Climate Finance Fund) for Grant 0903-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Grant Agreement Dec 2023
Grant Agreement (Externally Financed - Japan Fund for the Joint Crediting Mechanism) for Grant 0902-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Grant Agreement Dec 2023
Loan Agreement (Ordinary Operations [Concessional]) for Loan 4344-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Loan Agreement (Ordinary Resources) Dec 2023
Grant Agreement (Climate Change Fund) for Grant 0901-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Grant Agreement Dec 2023
Grant Agreement (Externally Financed - Clean Technology Fund) for Grant 0904-MLD: Accelerating Sustainable System Development Using Renewable Energy Project Grant Agreement Dec 2023
Accelerating Sustainable System Development Using Renewable Energy Project: Report and Recommendation of the President Reports and Recommendations of the President Aug 2023
Accelerating Sustainable System Development Using Renewable Energy Project: Project Administration Manual Project/Program Administration Manual Aug 2023
Accelerating Sustainable System Development Using Renewable Energy Project: Gender Equality and Social Inclusion Action Plan Gender Action Plans Aug 2023
Accelerating Sustainable System Development Using Renewable Energy Project: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Jul 2021

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.


Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders


Contracts Awarded

No contracts awarded for this project were found

Procurement Plan

None currently available.