{"id":17808,"date":"2023-01-13T11:41:08","date_gmt":"2023-01-13T03:41:08","guid":{"rendered":"http:\/\/sar-climate.adpc.net\/?p=17808"},"modified":"2023-10-19T14:55:07","modified_gmt":"2023-10-19T06:55:07","slug":"maldives-solar-power-projects","status":"publish","type":"post","link":"https:\/\/sar-climate.adpc.net\/index.php\/2023\/01\/13\/maldives-solar-power-projects\/","title":{"rendered":"Why the Maldives 5 MW Solar Project is a Game Changer"},"content":{"rendered":"<div class='booster-block booster-read-block'>\n                <div class=\"twp-read-time\">\n                \t<i class=\"booster-icon twp-clock\"><\/i> <span>Read Time:<\/span>5 Minute, 42 Second                <\/div>\n\n            <\/div><p>[vc_row][vc_column][vc_column_text]<\/p>\n<h3><em>The blog post was first published on 12 January 2023 and retrieved from <\/em><a href=\"https:\/\/blogs.worldbank.org\/endpovertyinsouthasia\/why-maldives-5-mw-solar-project-game-changer\"><em>World Bank Blogs<\/em><\/a><\/h3>\n<p>[\/vc_column_text][vc_column_text]<\/p>\n<figure id=\"attachment_17811\" aria-describedby=\"caption-attachment-17811\" style=\"width: 1140px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-17811 size-full lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/sar-climate.adpc.net\/wp-content\/uploads\/2023\/02\/MaldivesSolar.jpg\" alt=\"\" width=\"1140\" height=\"500\" \/><figcaption id=\"caption-attachment-17811\" class=\"wp-caption-text\"><noscript><img decoding=\"async\" class=\"wp-image-17811 size-full lazyload\" src=\"https:\/\/sar-climate.adpc.net\/wp-content\/uploads\/2023\/02\/MaldivesSolar.jpg\" alt=\"\" width=\"1140\" height=\"500\" \/><\/noscript> The 5 MW solar project has been a game changer in the energy transition journey of the Maldives. Credit: Ministry of Environment, Climate Change and Technology (MECCT), Government of Maldives.<\/figcaption><\/figure>\n<p>[\/vc_column_text][vc_column_text]<a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">In 2022, the Maldives was crowned the \u2018World\u2019s Leading Destination\u2019, for the third consecutive year, at the World Travel Awards. With a population of around 550,000, the Maldives comprises 185 islands. Famous for its natural beauty, coral and fish life, the archipelago attracts almost 1.7 million tourists every year.<\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">However, the Maldives\u2019 dependence on tourism and fossil fuel imports makes its economy particularly vulnerable to external shocks. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">Already, in 2020, the country\u2019s real GDP contracted by at least 13 percent, 18.5 percentage points lower than the pre-COVID-19 baseline. High global crude oil prices caused by inflation and the Ukraine war pushed the country&#8217;s import bill to around $500 million in 2022, 80 percent of which is due to diesel imports. <\/a><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">This is equivalent to nearly one-fifth of all imports and 10 percent of GDP. <\/a><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">This high fuel bill has put extra pressure on the country\u2019s already strained fiscal space. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">Moving from a fossil-based to a renewable-based energy model is the best way to make electricity cheaper for everyone, reduce the fiscal risks, and protect this pristine island paradise.<\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">Projected to lose 80 percent of its land over the next few decades, the Maldives strengthened its commitment towards climate change and renewable energy targets when President Ibrahim Mohamed Solih announced the country&#8217;s ambition to become net-zero by 2030 at the UN Climate Ambition Summit in December 2020. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">Towards this, through two World Bank-funded sustainable energy projects\u2014Accelerating Sustainable Private Investment in Renewable Energy (ASPIRE), and Accelerating Renewable Energy Integration and Sustainable Energy (ARISE)\u2014the Maldives will install more than 50 megawatts (MW) of solar capacity and 40 megawatt hours (MWH) of battery storage, delivering diesel consumption savings amounting to approximately 30 million liters per annum. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">This will reduce the Maldives\u2019 import bill by approximately US$ 30 million annually, with a total project lifetime saving of US$ 750 million over 25 years. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">These projects are expected to significantly reduce the government\u2019s fuel subsidy expenditure, thereby decreasing the nation&#8217;s reliance on fossil fuels and the fiscal burden this creates. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">For the ARISE project alone, the US$ 12.4 million provided by the World Bank, which is a relatively small amount, has leveraged over US$ 140 million in financing, including guarantees from the Multilateral Investment Guarantee Agency (MIGA) and co-financing from Climate Investment Fund (CIF), the Asian Infrastructure Investment Bank (AIIB), Energy Sector Management Assistance Program (ESMAP), Sustainable Risk Mitigation Initiative (SRMI) and the private sector.<\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">The inauguration of the 5 MW solar project on December 7, 2022 under the ASPIRE project has been a game changer in the energy transition journey of the Maldives . <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">This journey, which started in 2014, is now seeing unprecedented interest from international investors and helping establish the Maldives as an investment destination for sustainable projects. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">In 2014, the first 1.5 MW solar project under ASPIRE only had four investors bids, and resulted in a high power purchase price (PPA) of 21 US cents per unit of electricity, indicating a lack of interest from investors in investing in sustainable projects in the Maldives. In 2020, the number of bids for the 5 MW project in Male increased to 25, and resulted in a PPA price of 10.2 US cents. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">In 2022, 63 investor expressed interest in the third 11 MW solar project in the remote islands of Maldives, and a record low price of 9.8 US cents was received. This is one of the lowest tariffs for any small island developing state (SIDS). This interest from investors is the result of a robust risk mitigation package, which includes a three-tier risk mitigation structure comprised of World Bank Group guarantees, a payment security mechanism, and a currency convertibility clause. <\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">The three-tier structure provides investors with confidence in the case of non-performance by a power utility, and can be used by the investor to ensure that they do not incur a loss on their investment.<\/a>[\/vc_column_text][vc_column_text]<\/p>\n<p style=\"font-size: 34px; text-align: center; line-height: 72px; font-color: #0b6603;\"><span style=\"color: #c6a024;\"><b><i class=\"fa fa-quote-left\" aria-hidden=\"true\">\u00a0<\/i><\/b><\/span><\/p>\n<p>[\/vc_column_text][vc_column_text]<\/p>\n<p style=\"font-size: 34px; line-height: 48px; text-align: center;\"><span style=\"color: #c6a024;\"><b><i>Moving from a fossil-based to a renewable-based energy model is the best way to make electricity cheaper for everyone, reduce the fiscal risks, and protect this pristine island paradise.<\/i><\/b><\/span><\/p>\n<p>[\/vc_column_text][vc_column_text]<a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">With this structure, the Maldives has successfully established itself as an investment destination for sustainable energy projects, in addition to tourism and hospitality. The country is on track to transform itself into a small island nation leading the way in sustainable, renewable energy within the next few years. Now, one of the first sights for any of the 1.7 million tourists visiting the Maldives will be that of the 5 MW solar installation on the highway linking the airport island to Male and its satellite town of Hulhumale.<\/a><\/p>\n<p><a style=\"text-align: left; font-size: 20px; color: #000000; line-height: 28px; text-decoration: none;\">The foresight and climate-proactivity of successive Maldivian governments, coupled with development financing from partners like the World Bank, will help the country achieve its ambitious energy transformation targets, showcasing best practices for other island states. Due to the success of this journey, the World Bank is replicating the Maldives&#8217; experience across other SIDS, including the Seychelles, and Mauritius, under the Solar Lighthouse Initiative.<\/a>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_column_text][\/vc_column_text][vc_single_image image=&#8221;17812&#8243; alignment=&#8221;center&#8221; style=&#8221;vc_box_circle_2&#8243;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<\/p>\n<p style=\"font-size: 16px; text-align: left;\"><strong>Guangzhe Chen<\/strong><\/p>\n<p style=\"font-size: 16px; text-align: left;\"><em>The writer is Vice President for Infrastructure, The World Bank<\/em><\/p>\n<p>[\/vc_column_text][vc_btn title=&#8221;Original Link &#8211; World Bank Blogs&#8221; color=&#8221;primary&#8221; size=&#8221;sm&#8221; link=&#8221;url:https%3A%2F%2Fblogs.worldbank.org%2Fendpovertyinsouthasia%2Fwhy-maldives-5-mw-solar-project-game-changer&#8221;][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_column_text][\/vc_column_text][vc_single_image image=&#8221;17815&#8243; alignment=&#8221;center&#8221; style=&#8221;vc_box_circle_2&#8243;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<\/p>\n<p style=\"font-size: 16px; text-align: left;\"><strong>Amit Jain<\/strong><\/p>\n<p style=\"font-size: 16px; text-align: left;\"><em>The writer is Senior Energy Specialist at The World Bank<\/em><\/p>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=&#8221;1\/2&#8243;][vc_column_text][\/vc_column_text][vc_single_image image=&#8221;17817&#8243; alignment=&#8221;center&#8221; style=&#8221;vc_box_circle_2&#8243;][\/vc_column][vc_column width=&#8221;1\/2&#8243;][vc_column_text]<\/p>\n<p style=\"font-size: 16px; text-align: left;\"><strong>Simon Stolp<\/strong><\/p>\n<p style=\"font-size: 16px; text-align: left;\"><em>The writer is Practice Manager at The World Bank<\/em><\/p>\n<p>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n        <div class=\"booster-block booster-reactions-block\">\n            <div class=\"twp-reactions-icons\">\n                \n                <div class=\"twp-reacts-wrap\">\n                    <a react-data=\"be-react-1\" post-id=\"17808\" class=\"be-face-icons un-reacted\" href=\"javascript:void(0)\">\n                        <img decoding=\"async\" class=\"lazyload\" src=\"data:image\/gif;base64,R0lGODlhAQABAIAAAAAAAP\/\/\/yH5BAEAAAAALAAAAAABAAEAAAIBRAA7\" data-src=\"https:\/\/sar-climate.adpc.net\/wp-content\/plugins\/booster-extension\/\/assets\/icon\/happy.svg\" alt=\"Happy\"><noscript><img decoding=\"async\" class=\"lazyload\" src=\"https:\/\/sar-climate.adpc.net\/wp-content\/plugins\/booster-extension\/\/assets\/icon\/happy.svg\" alt=\"Happy\"><\/noscript>\n                    <\/a>\n       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With a population of around 550,000, the Maldives comprises 185 islands. Famous for its natural beauty, coral [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":17821,"comment_status":"closed","ping_status":"open","sticky":false,"template":"post-template-fullwidth-1.php","format":"standard","meta":{"footnotes":""},"categories":[370],"tags":[247],"class_list":["post-17808","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-maldives","tag-blog","eq-blocks"],"gutentor_comment":0,"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Maldives Solar Power Projects amidst Climate Change - SAR-CLIMATE<\/title>\n<meta name=\"description\" content=\"Understand how Maldives solar power projects are making a significant difference in this climate-vulnerable country\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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