The World Bank Group’s Board of Executive Directors on Friday approved a USD 107.4 million project to help Maldives transition to renewable energy and support sustainable recovery.
According to the Group, the new project titled 'Accelerating Renewable Energy Integration and Sustainable Energy (ARISE)' will build on the 'Accelerating Sustainable Private Investments in Renewable Energy (ASPIRE)', an existing initiative funded by the organisation to bring in private investors to increase the country's renewable energy capacity.
ARISE will expand solar power generation in and out of the Greater Male’ region, as well as strengthen the capacity of the power system for solar-generated electricity. Both ASPIRE and ARISE will help generate a cumulative of 42.5 megawatt capacity via solar installations, adding on to the 2020 target of 51 megawatts.
The Ministry of Environment is to implement ARISE in collaboration with the two state-run utilities firms, STELCO and FENAKA. The total project cost of USD 107.4 million includes a USD 12.4 million grant from the International Development Association (IDA), the World Bank’s concessional credit window for developing countries. Furthermore, the cost includes financing from non-World Bank Group entities such as USD 30 million from the Clean Technology Fund, USD 20 million from the Asian Infrastructure Investment Bank (AIIB) and USD 45 million as commercial financing.
World Bank stated that the two projects will help to address the challenges and vulnerabilities faced by Maldives as a result of climate change, while shifting the country away from from fossil fuels and reducing its carbon footprint.
“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. The ARISE project is aligned with the World Bank Group’s strategy to tackle the post-COVID-19 challenges", stated Faris. H. Hadad-Zervos, the World Bank Country Director for Maldives, Sri Lanka and Nepal.
“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".
World Bank noted that its Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC) will provide expertise and resources for the project, which will offer incentives to investors through a comprehensive risk mitigation package, including tariff buydown grants, a secured payment mechanism, and investment guarantees.
ARISE will also ensure the upgrades of electricity grids to accommodate more renewable energy, as well as distribute battery systems in Addu Atoll and other islands for cost-efficient integration of variable renewable energy and reliable supply.
Moreover, training will be provided for staff at relevant authorities and utility companies, in addition to targeted actions to increase women’s participation in the Maldivian energy sector by creating more and better jobs for women, organising outreach workshops for female students, and conducting skill development courses for women in the outer islands.
Furthermore, the project will 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, that could be implemented in Maldives.
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