Maldives: Accelerating Sustainable System Development Using Renewable Energy Project

Sovereign (Public) 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 Maldives
Project Status Proposed
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant: Accelerating Sustainable System Development Using Renewable Energy Project
concessional ordinary capital resources lending / Asian Development Fund US$ 30.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
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 - Renewable energy generation - solar - Renewable energy generation - wind

Gender Equity and Mainstreaming 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).
Outcome Share of renewable energy sources in power generation mix increased.
Outputs

Private sector investments in renewable energy increased

Renewable energy penetration using innovative new technologies, net metering, and hybrid systems increased.

Productive use of disaster-resilient, innovative, and gender- and socially inclusive renewable energy-based farming technologies pilot-tested and promoted.

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 South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Ministry of Environment (formerly Ministry of Environment and Energy; Ministry of Housing and Environment)
Green Building, Handhuvaree Hingun,
Maafanu, Male', 20392, Republic of
Maldives
Timetable
Concept Clearance 27 Jul 2021
Fact Finding 27 Sep 2021 to 01 Oct 2021
MRM 30 Nov 2021
Approval -
Last Review Mission -
Last PDS Update 27 Jul 2021

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.


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.

None currently available.


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

No tenders for this project were found.


Contracts Awarded

No contracts awarded for this project were found


Procurement Plan

None currently available.