World Bank Approves $107 Million for Renewable Energy Transition in Maldives

The new project mainly aims to expand solar generation in and out of the Greater Male region

The World Bank approved a $107.4 million project to help the Maldives accelerate its transition to renewable energy.

The ‘Accelerating Renewable Energy Integration and Sustainable Energy’ (ARISE) project builds on the efforts of the existing World Bank-funded program ‘Accelerating Sustainable Private Investments in Renewable Energy’ (ASPIRE) initiative to bring in private investments for increasing renewable energy capacity in the Maldives.

Both projects are designed to address the climate-related challenges and vulnerabilities that the Maldives is exposed to as an island nation. While moving to renewable energy generation sources, the Maldives will also shift away from fossil fuels and significantly reduce their carbon footprint.

The Maldivian Ministry of Environment will implement ARISE in close coordination with STELCOand FENAKA– leading utility companies in the Maldives. The total project cost is $107.4 million, including a $12.4 million grant from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries.

Financing from non-World Bank Group entities includes $30 million from the Clean Technology Fund, $20 million from the Asian Infrastructure Investment Bank (AIIB), and $45 million for commercial financing.

According to Faris. H. Hadad-Zervos, the World Bank Country Director for Maldives, Sri Lanka, and Nepal, “The ARISE project is aligned with the World Bank Group’s strategy to tackle the post-COVID-19 challenges. While ASPIRE focused on bringing in private developers to invest in renewable energy, the ARISE project takes it further by focusing on combining the risk mitigation mechanisms with innovative solar technologies, storage solutions, and grid upgrades.”

The new project aims to expand solar power generation in and out of the Greater Male region and strengthen the power system’s capacity to integrate electricity generated from solar power. The solar installations under the ASPIRE and ARISE projects will help generate a cumulative 42.5 MW capacity, a significant addition to the 2020 target of 51 MW.

Investors will receive a comprehensive risk mitigation package, including tariff buydown grants, a secured payment mechanism, and investment guarantees, coupled with expertise and resources from the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC).

Additionally, existing electricity grids will be upgraded to accommodate an increasing volume of renewable energy. Simultaneously, battery systems will be deployed in the southernmost Addu City and other islands to ensure integration of variable renewable energy and reliable supply in a cost-efficient manner.

The project will support the training of staff at relevant authorities and utility companies. It will also explore the potential of other renewable energy sources like wind and hydrogen, and electronic vehicle charging stations, and vehicle-to-grid technologies.

As part of the project’s technical assistance package, targeted actions will be taken to increase women’s participation in the Maldivian energy sector, including creating more and better jobs for women in the energy sector, organizing outreach workshops dedicated to female students, and providing skill development courses for women in the outer islands.

In February this year, the Maldives issued a tender inviting interested bidders to participate in the pre-qualification process for installing 21 MW of grid-tied solar systems in six major islands.

These islands are Addu City, Fuvahmulah City, Kulhudhuffushi City, GDh Thinadhooo, B.Evdhafushi, and Lh.Hinnavaru. The subproject was rolled out with financial and technical support from World Bank’s ARISE project in the Maldives.

In November 2020, the Asian Development Bank (ADB) announced that it approved a concessional loan worth $7.74 million and a project grant worth $2.73 million to advance the existing ‘Preparing Outer Islands for Sustainable Energy Development (POISED)’ project in the Maldives.

In January 2020, the ADB and Maldives’ environment ministry started implementing the solar battery-diesel hybrid systems in 48 islands out of the atoll nation’s 160 inhabited islands.

Source : mercomindia.com

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