Description: 

$12.6 million in SREP grant funding to scale up private sector solar energy deployment in the Maldives; contributing to energy security, job creation, and local air quality improvement while working toward the nation’s climate objectives.

Background:

The Maldives has a population of over 326,000, and is a middle-income country with GDP per capita of $7,177. While poverty has declined sharply overall in recent years, vulnerability and inequality are a widespread concern among many Maldivians. The economic disparities among remote islands with small populations and the capital Male region remain substantial.

The nation’s economy is largely dependent on tourism and fisheries, both of which are vulnerable to external economic and environmental shocks. The country lacks land-based natural and mineral resources, and has no conventional resources of energy. As a result, virtually all economic production is highly dependent on imports, creating a heavy dependence on foreign exchange earnings. Providing electricity to the dispersed islands is overwhelmingly dependent on imported diesel fuel oil, creating a vulnerability to fuel price volatility.

This $12.6 million in SREP grant funding will scale up solar energy deployment, creating energy security and helping to alleviate poverty.

Objectives and Outputs:

The project development objective of the ASPIRE program is to increase photo voltaic (PV) generation in the Maldives through private sector investment. Component 1, technical assistance to the Government of the Maldives, will create an enabling environment for private investment in PV, build local institutional capacity for planning, implementing, operating, and monitoring power systems, and develop a pipeline of projects. Component 2 will structure and deliver capital subsidy for projects underway and subsequent projects. Component 3 mobilizes $3.9 million of SREP resources alongside $16 million of World Bank guarantee exposure. It will function as a combination of a funded escrow account and a World Bank guarantee to setup payment guarantees and mitigate risks for private sector developers.

The project is expected to avoid 25,883 tCo2e/yr per year and 517,667 tCo2e over a 20 year period. Annual savings from reduced imports of diesel are estimate to be equivalent to 11,413 kL upon completion of the program and between 19,974 kL and 28,534 kL if the program catalyzes a larger transformational shift. The program is anticipated to improve power reliability throughout the country, reduce electricity prices, improve operational performance of Maldivian utilities and electricity service providers, and enhance the institutional capacity of involved stakeholders. Additionally, the program will provide local employment as well as public health and environmental benefits.

The SREP Investment Plan objective of scaling-up renewable energy in the Maldives supports socioeconomic development by generating new economic opportunities and widening access to sustainable, clean and reliable energy. Thus, it effectively contributes to poverty reduction and sustainable development which benefits the Maldives’ economy and its people overall.

This project summary is drawn from draft project proposals [such as the PAD, PID, SAR, and country investment plan] and may not contain the most up-to-date information.

IBRD Project Portal

Project Details
Cover Note | Project Document | MDB Project Implementation Services (MPIS) | Proposed Decision
Approved on April 10, 2014 (Approved Decision)
Approved amount(s):
USD 11.68 million (grant funding)
USD 214,000 (MPIS Final tranche)

Comments and Responses:
Netherlands (March 20, 2014)  
Switzerland (April 1, 2014) 
United States (April 1, 2014) 
Netherlands (April 2, 2014)  
United Kingdom (April 2, 2014)  
Netherlands (April 4, 2014) 
United States (April 9, 2014)

IBRD Response to Netherlands (March 28, 2014)
IBRD Response to United States (April 1, 2014)
IBRD Response to Netherlands and Switzerland (April 4, 2014)