The World Bank’s Board of Executive Directors has approved a USD 107.4 million project to help the Maldives accelerate its transition to renewable energy and support sustainable recovery.
The Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) project builds on the efforts of the existing World Bank-funded Accelerating Sustainable Private Investments in Renewable Energy (ASPIRE) initiative to bring in private investments for increasing renewable energy capacity in the Maldives. Both the projects are designed to help address the climate challenges and vulnerabilities that the Maldives is exposed to as an island nation.
World Bank Country Director for Maldives, Sri Lanka and Nepal, Faris. H. Hadad-Zervos said the World Bank has been adjusting its program to respond quickly to the threats posed by the COVID-19 pandemic while focusing to bolster economic recovery and resilience. He noted the ARISE project is aligned with the World Bank Group’s strategy to tackle the post-COVID-19 challenges. He said 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 locations in and out of the Greater Male’ Region and strengthen the capacity of the power system for integration of electricity generated from solar power. The solar installations under the ASPIRE and ARISE projects will help generate a cumulative of 42.5 MW capacity, which would be a significant addition to the 2020 target of 51 MW.
With expertise and resources from the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC), incentives will be offered to investors through a comprehensive risk mitigation package, which includes tariff buydown grants and a secured payment mechanism, and investment guarantees. Additionally, existing electricity grids will be upgraded to accommodate an increasing volume of renewable energy, while 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 training of staff at the relevant authorities and utility companies. It will also explore the potential of other renewable energy sources like wind and hydrogen, as well as new technologies such as EV charging stations and vehicle-to-grid technologies.
The ARISE Project will be implemented by the Ministry of Environment with close coordination with State Electric Company Limited (STELCO) and Fenaka Corporation Limited, the main utility companies in the Maldives. The total project cost is USD 107.4 million, including a USD 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 include USD 30 million from the Clean Technology Fund, USD 20 million from the Asian Infrastructure Investment Bank (AIIB) and USD 45 million commercial financing.