Maldives Set to Develop Solar Battery-Diesel Hybrid Systems

The POISED project is being co-financed by ADB and EIB

January 29, 2020


The Asian Development Bank (ADB) and the environment ministry of Maldives have started to implement solar battery-diesel hybrid systems in 48 islands out of the 160 inhabited islands of the atoll nation.

This latest move comes as a part of the Preparing Outer Islands for Sustainable Energy Development (POISED) project, which aims to help the country cut down its reliance on diesel and concentrate on tapping solar power.

The main aim of the POISED project is to transform the existing diesel-based mini-grids into hybrid renewable energy systems on the 160 inhabited islands out of which projects on 48 islands have already been commissioned. The POISED project has been achieving its aim by investing in solar PV power projects, battery storage systems, energy management systems, efficient diesel generators, and distribution grid upgrades aimed at fostering the growth of renewable energy in the island nation.

The POISED project was approved in 2014 and has been co-financed by $55 million in grants from ADB and $50 million loan from the European Investment Bank (EIB).

The $55 million grant from the ADB includes $38 million from the Asian Development Fund, $12 million from the Strategic Climate Fund (SCF), and $5 million from the Japan Fund for the Joint Crediting Mechanism (JFJCM).

Speaking on the POISED project, director of ADB’s energy division for south Asia, Priyantha Wijayatunga, said, “The POISED project—one of the largest energy sector interventions in the Maldives—will introduce sustainable energy in the outer islands as well as help reduce the cost of energy, minimize CO2 emissions, achieve considerable fuel savings, and reduce the burden on the government budget.”

It is important to note that the Maldives is the first country in South Asia to achieve 100% access to electricity. All the inhabited islands have been generating electricity from diesel-based grid systems which are old, expensive, and sometimes unreliable. This made the nation heavily reliant on oil imports and also made its carbon emissions per unit of electricity one of the highest in the region. Generating electricity from diesel is a costly affair, and it requires subsidies from the government of over $40 million a year. In this light, the installations of the solar battery-diesel hybrids acquire more importance as it would reduce the cost of power generation a great deal as compared to the existing options.

Currently, 7.5 MW of solar projects, 5.6 MWh of battery storage systems, and 11.6 MW of energy-efficient diesel systems have already been installed in the island nation as a part of the project. The up-gradation of the grid systems is also a part of the project.

The project is aiming to achieve the target of 21 MW of solar PV installations, and this would cater to an annual demand of 27,600 MWh and would also lead to a reduction of CO2 emissions by 19,623 tons annually.

Currently, all the projects under the ADB for SCF have been installed, whereas projects under JFJCM are still under progress. The disbursements of funds under the EIB funding have commenced, and it will be used for the remaining smaller islands.

In December last year, ADB announced that it was planning to roll out nearly $1 billion of energy investments across the region during the 2019-2021 period. As the energy demand in the Asia and Pacific region grows, ADB is trying to improve the regional energy systems in the Pacific. The bank is seeking to promote energy efficiency and renewable energy; maximize access to electricity for all, and promote energy sector reform, capacity building, and effective governance.

Earlier, ADB had approved a $6 million grant for the Government of Tuvalu (located in the south Pacific) to help it shift away from fossil fuels and to bolster their existing energy sector while making power more affordable.

Previously, Mercom reported that India had announced the provision of financial assistance up to $ 1.4 billion in the form of budgetary support, currency swap, and concessional lines of credit to fulfill the socio-economic development programs in the Maldives. India and Maldives have said they will cooperate closely for the growth of the renewable energy sector.