The Maldives has been successful in getting energy to even the most remote atolls, resulting in 100% connection throughout the archipelago. Tragically, though, diesel fuel is still used almost exclusively to power the generators. The nation imported more than 700,000 metric tons of fuel in 2019, with diesel making up the majority of that amount at 80%. To produce power, the utilities consume a large percentage of this imported fuel.
Due to the nation’s reliance on pricey imported diesel for power generation, a lack of economies of scale, and poor infrastructure, the country has some of the highest power tariffs in the region, with domestic users paying up to MVR 4.5 and institutions paying up to MVR 7.5, making it difficult for business owners like Rasheeda to raise capital to grow their operations. The Maldives’ already constrained financial resources have come under further strain due to the high cost of petroleum.
The government provided a utility bill waiver to lessen the impact that COVID-19’s unprecedented shocks had on people’s ability to support themselves. This was in addition to the US$61 million subsidy granted for gasoline and electricity, or nearly 1% of the GDP suffered large losses as a result, in addition to decreased energy consumption, declining collection rates, and the inability to raise tariffs. Additionally, the COVID-19 epidemic has led to a fast increase in debt risks and increasing budget deficits. In preparation for COP24 in 2018, the World Bank established the Sustainable Renewables Risk Mitigation Initiative (SRMI) with assistance from the Agence Française de Développement (AFD), the International Solar Alliance (ISA), and the International Renewable Energy Agency (IRENA). The purpose of SRMI is to aid governments in developing and implementing sustainable renewable energy plans that will draw in private capital while reducing reliance on public resources.
