“My largest outlay is for power. My power bill is pretty expensive because all of the equipment needs electricity to operate. When I don’t make enough money, like in certain months, I have to use my own money to pay the bill “Aminath Rasheeda, a mother of two who is 42 and has a tailoring business in the northern city of Kulhudhuffushi, says.
Even the most remote atolls in the Maldives now have access to electricity, giving the archipelago total electricity connection. Tragically, however, diesel fuel is still used almost exclusively to power the generators. More than 700,000 metric tons of fuel were imported into the nation in 2019, with diesel making up 80% of the total. The utilities generate energy using a sizeable percentage of this imported fuel. With one of the highest power tariffs in the region – as high as MVR 4.5 for domestic users and MVR 7.5 for institutions – the nation’s reliance on pricey imported diesel for power generation, a lack of economies of scale, and poor infrastructure make it difficult for business owners like Rasheeda to free up cash to expand 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 gasoline subsidy of US$61 million, or around 1% of GDP. The Sustainable Renewables Risk Mitigation Initiative (SRMI) was developed by the World Bank in 2018 for COP24 with assistance from the Agence Française de Développement (AFD), the International Solar Alliance (ISA), and the International Renewable Energy Agency (IRENA). The mission of SRMI is to help countries develop and implement sustainable renewable energy plans that will draw in private capital and reduce reliance on public funding.
The Sustainable Renewable Energy Program (SRP) is implemented by SRMI, which combines climate finance and development to provide technical assistance in developing evidence-based VRE sources like wind and solar. SRP also establishes robust procurement procedures with transaction advisors to choose Independent Power Producers (IPPs). The Maldives will be able to reach its ambitious 2030 net-zero objective because of the proactiveness of the nation’s consecutive administrations and funding for development from institutions like the World Bank. Within a few years, the Maldives will transition from a popular tourist destination to a tiny island nation that sets the standard for sustainable, renewable energy. These energy technologies would enable Maldivian company owners like Rasheeda and others to pay less for electricity and free up money to grow their companies and enhance their standard of living.
