Tag: investment

“Time for everyone to tighten their belts”: Finance Minister Jihad

Minister of Finance and Treasury Abdulla Jihad has said the state must brace to enact austerity measures in the long-term if authorities are to address the country’s fiscal deficit – with further budget cuts anticipated in all government departments over the next 12 months.

Jihad has told Minivan News that previous commitments by government institutions to cut their budgets by 15 percent would need to be followed by further reductions to state and civil service spending in next year’s budget, regardless of financial assistance secured from China and India.

The minister’s comments were made as Parliament’s Finance Committee – reconvening for the first time since July – agreed this week to provide an additional MVR 12 million (US$780,000) in budget to the Auditor General’s (AG’s) Office, according to local media.

Auditor General Niyaz Ibrahim said that under the existing state budget, an agreement was reached that an additional MVR 58.8 million (US$3.8 million) would be provided to the AG’s Office, though it was decided to request a smaller proportion of these funds, the Sun Online news service reported.

People’s Aliance (PA) party MP and Finance Committee Chair Ahmed Nazim was not responding to calls from Minivan News at the time of press.

However, Jihad claimed that the decision to provide the extended budget was a “concern” considering the state was not getting enough direct revenue at present to justify its spending.

“We need to be fair when it comes to the budget, everyone should have to follow the same rules,” he claimed. “Otherwise this would mean that I could only reduce the budget of the Finance Ministry in future. It is time that everyone should tighten their belts.”

According to Jihad, provisions for the extension of funds to the AG’s Office had been included in the state budget, but he claimed that the country needed to work together in reducing state spending where possible.

Regarding claims that further cuts to the state budget wuld be required during the next 12 months, Chairman of the Civil Service Commission (CSC) Mohamed Fahmy Hassan said that it had “managed” with the 15 percent cuts already made to its expenditure.

Fahmy added that as no request had so far been made by the government to reduce the size and budget of civil society organisations, it did not have concerns about potential job cuts.

“Our mandate is to provide human resources to the government. As long as there is no effect on the salaries or number of civil servants, we will not seek to intervene in the policy of government,” he said.

With state income lower and expenditure higher than predicted, this year’s budget deficit had been forecast to reach MVR9.1billion (US$590 million), equivalent to around 28 percent of nominal GDP.

Financial assistance

In the last few months, authorities in India and China had both pledged to provide financing to the Maldives. Finance Minister Jihad said that of these funds, US$25 million being provided by India would be put into “budget support” to try and address state spending. A large amount of the funding meanwhile from China, which would total US$500 million, was expected to be put towards development projects such as housing construction, the Finance Ministry added.

The Indian government had announced that it would be granting the Maldives an additional as part of the US$100 million standby credit facility agreed last year under the previous government.

China has also pledged funding to the government of President Dr Mohamed Waheed Hassan following an official state visit to the country.

The loans, equal to nearly one quarter of the Maldives’ GDP, are said to include $150 million (MVR2.3billion) for housing and infrastructure, with another $350million (MVR5.4billion) from the Export-Import Bank of China, reported Reuters.

Jihad has maintained that the state still needs to reassess where further spending cuts can be made going forward.

Just last month, the Finance Ministry forwarded proposals it claimed would cut MVR2.2billion (US$143million) form the national budget.

The austerity measures include raising Tourism Goods and Services Tax (TGST) to 15 percent,  terminating electricity subsidies in Male’, increasing import duties on alcohol and imposing a 3 percent  duty on oil, “reforming” the Aasandha health insurance scheme, and reducing the budget of every Ministry and independent institution by 15 percent – among other measures.

The original budget for 2012 envisioned that revenue would rise to MVR11.4billion (US$740million) with expenditure anticipated to be MVR14.5 billion (US$941million). This would have resulted in a budget deficit of around MVR3billion (US$194million), representing 10 percent of GDP.

However, several resort managers voiced concern at the time that the proposed revenue amendments would serve only to  affect the financial viability of the country’s tourism industry, while providing little improvement in service or support in return.

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“The good news is that the Maldives is not about to disappear”: President Waheed

“First of all, I want give you a bit of good news. The good news is that the Maldives is not about to disappear,” President Dr Mohamed Waheed Hassan has told a group of Sri Lankan businessmen in Colombo yesterday, according to media reports.

Speaking during his official state visit to the Maldives’ closest neighbour, Waheed told an assembled group of business heads at the Hilton Colombo hotel that the country could mitigate the effects of climate change and global warming.

Waheed made the comments in an attempt to assure his audience in Colombo yesterday that steps were being taken to stabilise the political climate in the country, as well to retain investor confidence.

The President said that large sections of the state budget were currently being spent on combating coastal erosion, providing clean water for the islands and developing renewable energy to minimize overall expenditure.

Since assuming the presidency, Waheed has pledged to work towards the previous administration’s carbon neutrality strategy, while also announcing intentions to make the Maldives the world’s largest bio-reserve.

There has also been discussion of a green energy fund to raise US$100 million for renewable energy projects through voluntary tourist contributions.

The country’s energy sector had been headed for a dramatic overhaul this year before the political instability surrounding February’s transfer of presidential was claimed to have deterred potential investors in such a project.

The Scaling-Up Renewable Energy Programme (SREP) promised to attract up to $3billion in risk-mitigated renewable energy investment and reduce the Maldives’ dependency on imported oil.

The environmental obstacles besetting the low-lying archipelago had been championed by former President Mohamed Nasheed, who garnered international media attention with his underwater cabinet meetings and a promise to make the country carbon neutral by the year 2020.

Nasheed’s media campaign was covered in the documentary film, “The Island President”, which highlighted his negotiations at the 2009 Copenhagen Climate Summit.

Before assuming office, Nasheed told international media that he had discussed the idea of purchasing land in Sri Lanka, amongst other nations, “as an insurance policy for the worst possible outcome.”

Investor Confidence

Waheed assured his audience in Colombo yesterday that the government was also focused on bolstering investor confidence.

Threats to renationalise Ibrahim Nasir International Airport (INIA) – currently being developed by Indian company GMR – have recently brought calls from within the national-unity government for greater consideration of the longer-term impact on foreign investment.

President Waheed is also reported as having told Sri Lankan media that both the economy and the tourism industry, which indirectly contributes around 70percent of GDP, were growing.

A President’s Office statement, however, has reported that Waheed told the group gathered at the Hilton that there had been a decline in the tourism industry recently.

The Tourism Ministry’s most recent figures show that, compared with the same point in 2011, tourist arrivals were up by 2.8 percent, whilst occupancy rates had dropped 1.2 percent.

Figures published by the Maldives Monetary Authority (MMA) show that the economy was expected to grow by 5.5percent this year, a slight slow down on the previous year.

Tourism Minister Ahmed Adheeb, who is accompanying President Waheed to Sri Lanka, was unavailable for comment when contacted today.

At present, a key economic concern to the government is the current budget deficit, anticipated to reach MVR9.1billion (US$590million) – over 28 percent of nominal GDP.

Haveeru reported that Waheed has informed the Sri Lankan press of austerity measures which were delivered to the Majlis by the Finance Ministry earlier this month.

The Sri Lanka Daily News meanwhile reported that he was in the process of finalising agreements which would strengthen bilateral ties in trade and investment as well as the legal and the educational sectors.

Minister for Economic Development Ahmed Mohamed and President’s Office Spokesperson Abbas Adil Riza were not responding to calls at the time of press.

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Government has caused “irreparable damage” to investment climate: MDP

“The MDP is extremely worried about the deteriorating environment for investors and strongly condemns the continued threats posed by Dr Waheed’s administration to foreign investors,” read a press statement released by the party today.

The party’s spokesman, Hamid Abdul Ghafoor, stated that public-private partnerships (PPP) initiated under the MDP government have been suspended “in the interest of preserving the status and wealth of few local wealthy businessmen.”

The current government announced the suspension of any new PPP projects shortly after assuming power. The Minister of Economic Development, Ahmed Mohamed, whose department handles foreign investment in the Maldives, was not responding at the time of press. President’s Office Spokesperson Abbas Adil Riza was also not responding.

The MDP statement specifically mentions three projects which have encountered difficulties, claiming that they have been intentionally hindered by the current government, “causing irreparable damage to the foreign investment climate of Maldives.”

The World Bank’s ‘Ease of Doing Business Report’ shows that the Maldives has dropped one place in its overall list during the last twelve months, falling to 79th out of 183 countries ranked. In terms of protecting investors, the Maldives dropped five places in this year’s list.

Former Energy Advisor to President Nasheed Mike Mason told Minivan News in June that, before Nasheed’s controversial resignation, the World Bank had given verbal approval to a plan which would have brought an immediate US$200million of renewable energy investment to the country.

The resulting political instability caused the plan, which had been intended to wean the country off its dependency on oil imports, suspended indefinitely as potential investors backed away.

Meanwhile, proposed austerity measures sent to Parliament by the Finance Ministry last week include a three percent increase in oil import duty.

One of the most high profile foreign investments in the Maldives is the GMR-MAHB project to develop Ibrahim Nasir International Airport (INIA). This US$400 million deal for the upgrade and management of the airport represents the country’s biggest ever private investment contract.

The deal has foundered on a dispute over the implementation of an Airport Development Charge (ADC) of $25 per passenger which was agreed as part of the initial contract. This charge was opposed by the Dhivehi Qaumee Party (DQP), now a member of the coalition government, whilst in opposition. The party last year successfully sued for the blocking of the ADC, claiming that it represented an unauthorised tax.

The case led to an arrangement with the Mohamed Nasheed administration whereby the ADC money would be deducted from the concession fee payable to the government. The subsequent shortfall in funding for the project has seen the government’s anticipated US$14.3million in fees replaced this quarter with a bill from GMR for US$1.5million.

A number of pro-government parties, including the DQP, have renewed calls for the re-nationalisation of the airport. The dispute has now been referred to a court of arbitration in Singapore.

All three projects mentioned in today’s press release involve partnerships with Indian firms, the other two being a social housing development project with the TATA group, and a solid waste management project in Thilafushi with environmental engineering company UPL.

During President Dr Mohamed Waheed Hassan’s official state visit to India in May, he confirmed that all contracts with Indian investors would be honoured and was keen to discuss further Indian investment projects in the Maldives.

The MDP statement noted that its PPP projects would have generated revenue over MVR23.1billion (US$1.5billion) for the country.

The Finance Ministry’s austerity measures are an attempt to reduce this year’s budget deficit, which is forecast to reach MVR9.1billion (US$590million).

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GMR presents government with US$1.5 million bill for Q2, as ADC dispute sent for arbitration

An ongoing dispute between Ibrahim Nasir International Airport (INIA) developer GMR and the incumbent Maldivian government concerning a US$25 Airport Development Charge (ADC) has been referred to a court of arbitration in Singapore.

The government-owned Maldives Airports Company Limited (MACL) faces a US$1.5 million shortfall in concession fees owed to the airport developer for the second quarter of 2012; the legacy of an opposition-sponsored Civil Court case in late 2011 that scuttled the airport’s ability to charge the ADC as stipulated in its concession agreement.

GMR signed a 25 year concession agreement with former President Mohamed Nasheed’s government to upgrade and manage Ibrahim Nasir International Airport (INIA). Under the concession agreement, a US$25 Airport Development Charge (ADC) was to be levied on all outgoing passengers to part-fund the US$400 million development – the country’s single largest private investment.

However, while in opposition, the Dhivehi Qaumee Party (DQP), led by Dr Hassan Saeed, now President Dr Mohamed Waheed’s special advisor, and Dr Mohamed Jameel, now Home Minister, filed a successful case in the Civil Court in December 2011 blocking payment of the ADC on the grounds that it was effectively a tax not approved by parliament.

Nasheed’s government as a stopgap measure agreed to deduct the ADC from the concession fees payable by GMR, while it sought to appeal to verdict.

As a result, Dr Waheed’s government received only US$525,355 from the airport for the first quarter of 2012, compared to the US$8.7 million it was expecting, at time the country is facing a crippling budget deficit, a foreign currency shortage, plummeting investor confidence, spiraling expenditure, and a drop off in foreign aid.

According to financial statements sent to MACL and released to local media, in the second quarter of 2012, GMR deducted the ADC revenue of US$7.1 million from total revenues of US$5.6 million, leaving the government with a bill for US$1.5 million.

Managing Director of MACL Mohamed Ibrahim told local newspaper Haveeru that the government would not pay the amount, alleging that GMR’s deduction of the ADC from the revenue was illegal.

In its defence, MACL has said that its board of directors had been reformed with the arrival of the new government, and a decision made to annul the old board’s agreement to deduct the ADC revenue.

The government meanwhile sought to invalidate the GMR contract – and the clause invoking arbitration – by challenging the handling of the bidding process by the International Finance Corporation (IFC), a member of the World Bank group and the largest global institution focused on private development sector in developing countries.

“The advisory work was supported by AusAid (Australia), the Ministry of Foreign Affairs of the Netherlands, and DevCo. DevCo is a multi-donor program affiliated with the Private Infrastructure Development Group and funded by the UK’s Department for International Development, the Ministry of Foreign Affairs of the Netherlands, the Swedish International Development Agency, and the Austrian Development Agency,” the IFC explained, following a visit by the delegation in June to address the government’s concerns.

Following the first quarter deduction, GMR announced an employee benefits scheme converting 50 percent of employee salaries to US dollars from July onwards, and a one-percent profit-share.

Around the same time, the company sought to compromise with government by offering to exempt Maldivian citizens from paying the ADC. However, the Transport Ministry continued to demand that the infrastructure giant repay the US$8.2 million deducted.

Several pro-government parties – including the Dhivehi Rayithunge Party (DRP), Dhivehi Qaumee Party (DQP), People’s Alliance (PA) and Jumhoree Party (JP) – meanwhile advised President Waheed that they continued to endorse an agreement signed in June 2010 calling for the airport to be taken back from GMR and nationalised.

The relationship between the airport developer and the government soured further last week after the government temporarily called for a halt to work on the new airport terminal, alleging it had “violated rules and regulations” by not acquiring certain permissions from the Civil Aviation Authority.

“When the government decides that a project be stopped, we will make sure this happens,” President’s Office Spokesperson Abbas Adil Riza previously told Minivan News. “GMR have not discussed the construction with relevant authorities.”

Following the second quarter deduction, the airport developer declined to comment, as the matter “has been referred for arbitration by the parties.”

“GMR Male’ International Airport Pvt Ltd has made the said adjustment as per the concession agreement,” a spokesperson said.

The concession agreement includes an option for the government to buy out the contract from the developer, however the cost is likely to reach upwards of several hundred million dollars.

President’s Office Spokespersons Abbas Adil Riza and Masood Imad had not responded at time of press.

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Six Senses bought by Pegasus Capital Advisors

Luxury resort company Six Senses has been acquired by US-based private equity fund manager, Pegasus Capital Advisors, for an undisclosed sum.

Six Senses manages 10 resorts and 28 spas in 20 countries around the world, including Oman, Vietnam and Thailand, with another 15 under construction or development. Its brands include Soneva, Six Senses and Evason.

In the Maldives the group has operated the upmarket Soneva Fushi and Soneva Gili properties, and a new resort in Laamu that opened last year. Under the terms of the deal the Soneva-branded properties will be carved from the Six Senses portfolio and will continue to be held by Six Senses founder Sonu Shivdasani, who will remain as CEO, chairman and principle shareholder of the Soneva Group.

Pegasus Capital specialises on investing in middle-market companies facing financial distress, and has tended to focus on consumer products, technology, business services, energy, financial services, industrial manufacturing and the communications sectors.

“Going forward, the new Six Senses will be a debt-free company with committed capital for expansion into new and within existing international markets,” said Craig Cogut of Pegasus Capital Advisors, in a statement. “We are confident that our president Bernhard Bohnenberger and our strong management team will continue to build on its legacy as a recognised leader in luxury hospitality.”

Shivdasani said: “For myself and Eva, my wife, this means we can devote all our energies to our first love – the development of the Sonevas. Soneva will continue to operate its philanthropic arm, The Slow Life Trust, and remain dedicated to achieving environmental goals and a corporate commitment to sustainability.”

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ADC issue will bankrupt Maldives Airports Company: Finance Minister Jihad

Finance Minister Abdulla Jihad has declared that the Maldives Airport Company Limited (MACL) is unable to pay the disputed airport development tax (ADC) without risking bankruptcy.

The ADC was intended to be a US$25 fee charged to outgoing passengers from January this year, as stipulated in the contract signed with Indian infrastructure giant GMR in 2010. The anticipated US$25 million the charge would raise was to go towards the cost of renovating INIA’s infrastructure.

The ADC was to be charged after midnight on January 1, 2012, however the Civil Court blocked the fee on the grounds that it was essentially the same as a pre-existing Airport Services Charge (ASC). Following the court ruling the Nasheed government agreed that the ADC be deducted from its concession fee paid to the government-owned company in charge of the airport, Maldives Airport Company Limited (MACL).

On Monday however, new Finance Minister Abdulla Jihad told local newspaper Haveeru that MACL should not and could not cover the development costs.

“The Civil Court ruled against that charge. Hence that amount must not be deducted from the payment to the government which would reduce its income,” Jihad argued. “The Airports Company might face losses if that happens,” he said.

“I don’t believe that GMR can deduct that amount from the payment owed to the government. The estimated US$30 million for this year must be paid. If the payment is not received it would be difficult to run the Airports Company,” he continued.

Speaking to Minivan News, Jihad said the next step was to ask GMR to resolve the issue after the board of MACL was reappointed.

“The new board will write to GMR… It is not for the Finance Ministry to interfere with the running of the [airport] company,” said Jihad.

He also claimed that he did not feel there were any specific provisions in the original deal detailing the collection of the ADC.

In a statement following the court decision, GMR stated that it “has been permitted to collect ADC and Insurance charge under the Concession Agreement signed between GMR-MAHB, Maldives Airport Company Limited (MACL) and The Republic of Maldives (acting by and through its Ministry of Finance and Treasury), and as such has set up processes for ADC collection from 1st January 2012 supported by an information campaign to ensure adequate awareness.”

CEO of INIA Andrew Harrison said that the company was unwilling to comment on the “sensitive” issue at this point.

Meanwhile, Foreign Minister Dr Abdul Samad Abdulla in assured his Indian counterpart that all existing investment agreements would be honoured.

According to the Indian newspaper, the Hindu, Samad assured Indian External Affairs Minister S.M. Krishna that the government’s policy was unchanged, after his counterpart expressed the desire that the Maldives remained friendly to outside investors.

Longstanding opposition

The contentious Civil Court case was filed by the then-opposition Dhivehi Qaumee Party (DQP), now part of the ruling coalition, in a longstanding campaign against Nasheed’s government awarding the airport redevelopment to GMR. DQP leader Dr Hassan Saeed is now President Mohamed Waheed Hassan’s special advisor, while DQP Vice-President Dr Mohamed Jameel is the new Home Minister.

The decision to finalise a deal to develop Ibrahim Nasir International Airport (INIA) was agreed under the administration of former President Mohamed Nasheed in 2010. GMR emerged victorious in the bidding process, amid political opposition on largely nationalistic grounds.

Umar Naseer, now the deputy leader of the ruling coalition party the Progressive Party of Maldives (PPM), previously announced his intention to re-nationalise the airport should his party come to power. Naseer also contended that the airport deal would allow “Israeli flights to come and stop over [in the Maldives] after bombing Arab countries”.

The DQP campaigned vigorously against the deal, producing a pamphlet last December titled “Handing the airport to GMR: The beginning of slavery”, in which it criticised the arrangement with GMR.

In the document, the party argued that deal would allow the Indian company to “colonise” the local economy to the detriment of Maldivians. The DQP also questioned the legality of the deal, taking the issue of the ADC to the civil courts.

The document further alleged that the deal did not make adequate provision for replacing the runway, the condition of which has come under increasing criticism.

Head of the DQP Dr Hassan Saeed today said he was unable to comment on recent developments regarding GMR and the ADC.

The ADC was ruled by the court to be a new tax and was subsequently required to go through the People’s Majlis.

In light of this decision, GMR agreed with the Nasheed government in January that it would deduct the $25 per passenger fee from the concessionary charge paid each quarter to MACL. At the time the government acknowledged the compromise to be a temporary whilt maintaining its commitment to ADC in some form.

Confidence in GMR’s $511 million dollar INIA project appeared to take a hit after the the resignation of President Nasheed in February was accompanied by a five percent drop in GMR’s share prices before bouncing back shortly after.

Dr Waheed has reassured foreign investors that no businesses would be targetted for political reasons, although he did not rule out re-examining “certain deals”.

Attorney General Azima Shukoor announced that she had forwarded some of the previous government’s deals to the Auditor General but said no decision had yet been made on GMR. The government announced the suspension of any new Public Private Partnership schemes last month.

Spokesman for the Maldivian Democratic Party (MDP) Hamid Abdul Ghafoor argued that the new figures in the government were not doing enough to protect foreign investment.

“If they were going to protect the economy, they would be more proactive, rather than simply saying we can’t do it,” said Hamed. “This will seriously impact the the development of the airport. In the meantime, investors lose confidence.”

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Public Private Partnership schemes halted

The Economic Ministry has today announced it will halt any new projects to be carried out under the Public Private Partnerships (PPP) scheme.

An official representing the ministry told Haveeru that all projects for which agreements have been signed would continue, while those still in the bidding process have been put on hold.

The PPP scheme, initiated under former President Mohamed Nasheed was intended to remove financial strain on the budget whilst bringing in managerial expertise from the private sector.

The Ministry of Economic Development handles all such investment in the Maldives, while private involvement in the tourism industry falls under the remit of the Ministry of Tourism, Arts and Culture.

The specific reasons for the cessation of these programmes has not been made clear. Last week, Attorney General Azima Shukoor cast doubt on the legality of island privatisations under the previous president, announcing her intention to investigate these transfers.

During the same interview with DhiTV, Shukoor is reported as having said that the  appropriate legal processes had not been followed during the privatisation of state property.

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CMDA to license companies for Sharia-compliant securities

Capital Market Development Authority (CMDA) has opened applications to companies wishing to provide Sharia-compliant securities.

According to local media, CMDA will screen companies to ensure that their operations and transactions are made in alignment with Islamic Shariah.

Licenses will be awarded following consultation with the Capital Market Sharia Advisory Committee.

Sharia-compliant security services are most notable for their exclusion of interest. Currently, Amana Takaful is the only insurance company licensed to provide Shariah-compliant services to the Maldivian public.

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Nasheed installs solar panels on President’s Office

The government has begun installing solar panels on the rooftops of public buildings in Male’, under the Japanese government-sponsored ‘Project for Clean Energy Promotion in Male’.

This morning President Mohamed Nasheed clambered onto the roof of the President’s office to bolt down and wire up a panel, 20 kilowatts worth of which have already been installed all over the building.

The project’s 395 kilowatts of panels will ultimately cut down the fossil fuel usage of installed buildings and ultimately energy bills by 30 percent, under the State Electric Company (STELCO)’s new feed-in tariff.

Speaking during the ceremony to launch the project, Nasheed said a transition away from fossil fuels would increase the energy efficiency of the Maldives by 20-30 percent by the end of 2013.

Nasheed has previously installed 48 solar panels on the roof of his residence, Muleeage, provided gratis by LG Electronics Califorian company Sungevity. Those panels generate 11.5 kilowatts of peak output, enough to power almost 200 standard 60 watt light bulbs, and will save the country US$300,000 over the life of the system.

Minivan News understands that the government is currently revising the draft feed-in tariff – which is currently operative – to make it attractive to companies willing to invest the upfront costs of powering remote islands with solar electricity.

The government has endorsed solar as the best renewable option for reaching its goal of becoming carbon neutral by 2020, a goal that has broadened from one of environmental concern to an economic imperative.

Last year the Maldives spent 16 percent of its GDP on fossil fuels, making the country extremely vulnerable to even the tiniest oil price fluctuations and adding an economic imperative to renewable energy adoption.

Data collected by the President’s Energy Advisor, former mining engineer Mike Mason, shows that it presently costs between 28-29 cents to produce a kilowatt hour in the Maldives at best, and 77 cents per kilowatt hour at worst.

“Anything beyond 28-29 cents for a big island and 32-33 cents for a small island is just money being burned,” Mason said during the recent Slow Life Symposium held at the upmarket Soneva Fushi resort.

The cost of providing solar electricity straight from the panel was far below the cost of using diesel on any island, including Male’, Mason explained.

Mason collected data on energy usage from the island of Maalhos in Baa Atoll, and found that by pointing the solar panel in the same direction all day, “you can meet midday demand easily. But between 6-11 am in the morning, and after 2pm in the afternoon, you still need to meet the cooling load of fridges and air-conditioners.”

Mason had two suggestions – the first was to use (more expensive) tracking solar panels that would follow the sun and extend the daytime period in which demand could be met using solar. This would also generate the maximum yield from each panel, mitigating another problem – space.

“The challenge will be getting tracking to work in a hot, humid, salty environment,” he acknowledged, particularly if the panels were mounted in shallow lagoons.

The cost of providing electricity from solar in conjunction with current commercially available battery technology was not much different from existing diesel arrangements on many islands, Mason observed. “You lose 20 percent of the electricity putting it in and taking it back out, and it is expensive to fix. It’s not good enough.”

However on Maalhos, Mason noted, 28 percent of the electricity demand was for cooling.

“I had a think about storage. We could use really cold water refrigerated during the day, and use that to drive air-conditioning and fridges at night. This applies as much to resorts as it does home islands.”

This innovation would drop the cost to the level of the country’s most efficient diesel generators, Mason explained. For those powerplants currently running at 77 cents a kilowatt, “this is an opportunity to print money – and there aren’t many of those available to the government.”

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