Sep 14, 2021
In January 2015, The Climate Investment Funds (CIF) in collaboration with the Maldives government and the Asian Development Bank (ADB) initiated the Outer Island Sustainable Electricity Development Project (POISED). It was created to bring clean, renewable, and cost-efficient energy solutions to the country.
The Maldives, located in the Indian Ocean, is comprised of 1,192 islands with citizens occupying 187 of them. Over 50% of Maldives residents live in the outer islands. While all inhabitants have universal access to electricity, available since 2008, the country has long dealt with an unsustainable energy sector. The Maldives is almost 100% reliant on imported fossil fuel making the country beholden to erratic fuel price changes. Additionally, the continuous transportation of oil to the scattered 150+ settled islands is expensive and inefficient. In 2014, the government reported that it spent almost one fifth of the GDP to import diesel fuel necessary to power their country’s needs.
In January of 2015, the POISED project was initiated to help Maldives move towards self-sufficient, cost-efficient, clean energy by transforming the existing mini grids, including physical investments in the form of solar-PV-battery diesel hybrid systems. The objective was to decrease their excessive dependence on fossil fuels for power generation, reduce high electricity prices, and improve livelihoods.
Supported by the Climate Investment Funds’ (CIF) Scaling Up Renewable Energy Program in Low Income Countries (SREP) and the Asian Development Bank (ADB) with an initial combined US $50M in funds, POISED has ultimately proved to be a success. On the way to achieving fuel savings of up to 28% compared to diesel-only generator sets, the program faced three main challenges:
- Reticence Towards Renewable Energy: Previous renewable energy projects had been proposed and fallen through, leaving policy makers nervous to engage again. Plus, utility companies were worried that new systems would compromise their existing systems.
- Constraints in Finance: Through a concessional combination of grants and loans, the Maldives was expected to receive close to US $130M for the POISED program. But ultimately, due to delays and re-allocation of funds, payments slowed down and goals were not achieved in a timely manner.
- Limited Knowledge and Capacity: Once the project started, the Project Management Unit (PMU) realized that foreign contractors hired by the project lacked local knowledge and that local sub-contractors did not have sufficient training and lacked capacity.
While all three challenges contributed to a project slow down, the PMU used innovative and thoughtful solutions to overcome these problems. To win over reluctant naysayers, POISED implemented pilot projects which proved that solar power was cost effective, technically functional, and economically beneficial for local communities. The trials helped raise awareness and instill confidence in solar power.
To solve the funding problem, the PMU organized a sectored island approach, which meant the program wouldn’t fail if funding ran out. The PMU also looked outside of its original funding sources and procured further grants and concessional financing from additional organizations.
And finally, the PMU realized it needed more hands-on training in order to improve the capacity of its contractors. All training was moved back to the Maldives, sessions were conducted in the local language, and all classes were attended by foreign contractors, local sub-contractors and the PMU for clear and coordinated communication. Most importantly, these sessions increased local contractors’ understanding of technical problems they would face in future.
In the end, the POISED program was successful because of its adaptability, innovation, collaboration, and astute use of concessional finance. Using a phased approach meant that the PMU could identify and learn from initial problems and adjust the planning for the next phases. Listening and collaborating with local contractors and policy makers built good will, created easy communication and ensured that solar-PV-battery maintenance would be maintained. And when the PMU had loan difficulties, they were quick to look for additional financing, while changing the project design, to ensure the program did not fail.
As of December 31, 2020, the project reported1 remarkable and noteworthy outcomes. In-between 2020 and 2021, it was detailed that POISED added 1,794 businesses with improved access to electricity, jumping from 355 to 2,104. Additionally, inhabitants with improved energy access also shot up from 39,939 in 2020 to 117,692 in 2021. Of equal importance, the annual electricity production surpassed its target of 9,723 megawatts per year by over 17,500MW and beat its annual GHG emissions reduced/avoided target of 5,834 tons of CO2 equivalent by 34,166 tons. In the short amount of time that POISED has been in existence its success shows how important clean, renewable, and cost-efficient energy solutions are for countries to shift to low carbon and climate resilient development, and to accelerate climate action.
For access to the complete case study and to learn more this project, please click on the links here.
