Approves US $16 million IDA guarantee and US$ 11.7 million SREP grant
WASHINGTON, July, 2014— World Bank approved an IDA guarantee towards the Accelerating Sustainable Private Investment in Renewable Energy (ASPIRE) Project. This project is also funded by the Scaling up Renewable Energy Program (SREP) which is one of the programs of the Climate Investment Funds. The funding aims to develop new electricity generation capacity with renewable solar photovoltaic (PV) energy resources.
While access to electricity is universal in the Maldives, almost all of the country’s current power needs are met through diesel fired generation. Fuel imports and transportation to dispersed generating locations have resulted in difficulties in reliable power operations. Further, Maldives has the highest cost of power generation in South Asia with US$ 30-40 cents per kilo Watt-hour (kWh) or more in remote islands.
“Despite its geographic location around the equator with favorable solar radiation patterns, Maldives to date has not managed to tap significantly into this renewable energy generation resource beyond some few solar PV pilot projects” said Francoise Clottes, World Bank Country Director for Sri Lanka and the Maldives. “By helping to boost solar PV electricity generation capacity on a broader scale, ASPIRE will enhance development of this new energy generation resource and help the government reach its stated goal of becoming carbon neutral by 2020”.
Maldives is one of six pilot countries that participated in the SREP program. The Government of Maldives under the leadership of the Ministry of Environment and Energy developed an Investment Plan (IP) to support the scaling up of renewable energy (RE) development in the Maldives. The ASPIRE, with the World Bank as the lead agency, was born as a result of the SREP IP. It is a 5 year initiative to implement renewable energy projects in the Maldives through private sector engagement and capacity building. The Project is designed to promote a series of private sector investments totaling about $40-70 million, resulting in the commissioning of between 20-30 MW of PV generation.
“The project is planned to be deployed for at least 20 MW of grid connected PV capacities to be installed and operated by private investors. The first bid package will support about 4 MW in the Maldives capital area, Male and Hulhumalé”, said Sandeep Kohli and Robert Schlotterer, Co-Task Team Leaders for this Project. “Investors for this initial capacity will be selected competitively and the World Bank Guarantees offered under the ASPIRE would help investors leveraging the required commercial funding”.
Lessons learned from this initiative are expected to find resonance for other island states that have distributed electricity generation coming mainly from diesel fired power generations sets on multiple islands. The initiative is the result of close cooperation between World Bank, IFC, and MIGA, including the use of IFC Performance Standards for the private investments under the program.