Tag: STELCO

Public finance committee to summon STELCO

Parliament’s public finance committee has on Thursday decided to summon State Electric Company Limited (STELCO) for questioning regarding its operations.

MPs decided to extend the duration of overdraft facility provided to STELCO by the Bank of Maldives in relation to a MVR 50 million loan and voiced concerns over the management of STELCO.

Maradhoo constituency MP Ibrahim Shareef said electricity is a basic necessity and expressed concern about how the company is run. Mandhoo constituency MP Ahmed ‘ADK’ Nashid alleged that STELCO is not run in a cost effective manner.

Eydhafushi Constituency MP Ahmed ‘Redwave’ Saleem echoed Shareef’s concern and suggested that STELCO be summoned for questioning.

Eight of the members in attendance voted in favour of summoning STELCO for questioning.

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Pioneering desalination project launched in the Maldives

The island of Gulhi, in Kaafu atoll, yesterday became the first place in the world to produce desalinated drinking water using waste heat from electricity generation.

The project – a joint venture between state electricity supplier STELCO and UK registered charity the Aquiva Foundation – will produce around 8000 litres of water for local consumption.

“We think this is a fantastic opportunity for the Maldives, but if it works in the Maldives the way we think it will, I think the world will look differently at desalinating water, because all of a sudden you can do it sustainably on a really large scale,” said Aquiva CEO Florian Bollen.

The lack of fresh drinking water in the country’s 190 inhabited islands – made worse with the contamination of groundwater following the 2004 tsunami – leaves most communities reliant on rainwater and vulnerable to shortages during the dry seasons.

However, the dispersed nature of the islands, and the lack of a national grid means that every inhabited island houses its own facilities for electricity generation.

Research carried out by Aquiva prior to the project suggeste that 95 percent of Gulhi’s inhabitants were unhappy with the water supply in the island, which leaves them reliant on impure rainwater for drinking and contaminated ground water for washing.

The UK charity has installed a membrane distillation unit behind the island’s generator which will use the excess heat produced by the cooling system to induce the distilling process.

Sustainable supply

Yesterday’s launch was attended by the Minister for Environment and Energy Dr Mariyam Shakeela, who noted that the improvement of water supply was one of the new government’s 100 day goals.

The ministry has recently inaugurated safe drinking water projects in both Haa Alif and Alif Dhaal as part of its drive to introduce integrated water resource management programmes across the country.

Minister of State for Environment and Energy Abdul Matheen Mohamed told Minivan News today that the government was emphasising integrated systems in order to make the best use of the resources currently available.

“Our policy is to use the available resources as much as possible,” said Matheen. “Just basically to reduce the water costs.”

“What we are doing in the existing islands is using reverse osmosis plants to desalinate the water, which is a very expensive method of getting fresh water. We have to find ways to reduce the water costs.”

In January, the Abu Dhabi Fund for Development chose the Maldives from amongst 80 applicants to receive concessionary loans worth US$6 million (MVR92 million) for a clean energy project which could produce up to 62 million litres of desalinated water per year.

The ministry’s programmes also aim to raise local awareness on the protection, conservation, and use of water resources such as groundwater, rainwater, and desalinated water, explained Matheen.

He also noted that an integrated water approach  included the use of renewable energy sources, predominantly solar power, which reduce the need to use expensive diesel. Ministry figures for 2012 show that 27 percent of imported fuel was used for electricity generation.

Reverse osmosis systems require fuel which powers a high pressure pump to produce the clean drinking water, a process which Aquiva CEO Bollen also noted was “very high maintenance”.

“You have to have 24 hour engineers on site. With our system, we don’t have any of those pressures. It’s based on very low pressure, it’s very easy to maintain. The staff which usually look after the generators can actually look after the desalination plant. That makes it really applicable to remote small island locations.”

The project will also lead to a reduction of waste – a perennial problem in the Maldives inhabited islands – as reusable containers will be used to collect the distilled water and distribute it to households, before being returned to the desalination plant.

In order to sustain its projects, the Aquiva foundation will provide its services at cost price, with any profits made being reinvested into further projects.

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Parliament agrees extension of STELCO overdraft guarantee with BML

Parliament has today agreed to extend a government guarantee on a MVR 50 million (US$ 3.2 million) overdraft facility with Bank of Maldives (BML) for the State Electric Company (STELCO) until March 2014, according to local media.

The extension was passed with 31 votes in favour to 17 against, Sun Online has reported.
A total of 48 MPs took part in today’s vote.

The overdraft guarantee, which had originally been approved through parliament in September 2009, had been sent to expire this year.

Despite the extension agreement, STELCO last month revealed that the government owed MVR 543 million (US$35.2 million) in unpaid electricity bills as of May 2013.

According to the company, most of the money (MVR 281 million/US$18.2 million) is owed by assorted government offices. Indira Gandhi Memorial Hospital (IGMH) owes MVR 37 million (US$2.4 million) and the National Social Protection Agency (NSPA) owes MVR 224 (US$14.5 million).

STELCO, which is wholly owned by the government, is the country’s sole provider of electricity to major urban centres, such as Male’, and many inhabited islands.

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Maldives’ solar ambitions stall due to politics, financing, “restructuring”

Private companies and international actors are leading renewable energy implementation in the Maldives while the government “prepares” for various solar power projects.

Renewable Energy Maldives (REM) is working with approximately 25 islands, various resorts nationwide, and international actors to develop renewable energy systems and improve energy efficiency.

This private company connected solar photovoltaic (PV) panels generating 752 kilowatts (kW) to the power grid in 2012, Renewable Energy Maldives Managing Director Ibrahim Nasheed told Minivan News.

“Essentially, we are doing the [renewable energy development] work despite the government.

“President Waheed [Hassan Manik]’s government has not honored the Memorandums of Understanding signed under the previous government.

“Additionally, Fenaka – the re-centralised utilities company formed under Waheed’s government – has spent all of 2012 restructuring,” Nasheed stated.

“Since September 2011, REM and the Japanese Government are the only ones implementing renewable energy projects.

“The government has not implemented a single project this year,” Nasheed added.

Nasheed highlighted that despite the renewable energy, climate change mitigation and adaptation funds coming into the Maldives, securing financing has been very difficult.

“The major problem is the lack of funding. It is difficult to form good relationships with solar PV manufacturers so they will lower the costs because they need a bank guarantee,” he said.

To encourage Maldivian renewable energy businesses, Nasheed suggested banks provide financial backing, while money should be set aside from the climate change and renewable energy donor funds for these ‘guarantees’.

Nasheed further explained that the Scaling-up Renewable Energy Program (SREP) originally planned to be submitted to the World Bank in February 2012, but was not due to the political upheaval that resulted from former President Mohamed Nasheed’s controversial resignation February 7, 2012.

The World Bank’s Climate Investment Funds to support clean energy initiatives would have provided SREP financing. Now Waheed’s government is revising the proposal, renamed the Sustainable Renewable Energy Project (SREP) and will try to resubmit, according to Nasheed.

Abdul Matheen, the State Minister for Energy, told the publication oilprice.com in October 2012 that under the [new] SREP, the Maldivian government plans to begin a $138 million renewable energy project that will provide 26 mega watts of clean electricity within five years.

“[The government] is making preparations to commence the project during next month.

“Under the project, 10 islands would run solely on renewable energy. In addition, 30 percent of electricity in 30 islands will be converted to renewable energy,” Matheen told oilprice.com.

Meanwhile Nasheed emphasised there are currently “no regulations or standards” in the renewable energy sector.

“[Governmental] progress [developing renewable energy] has been slow, it’s not as fast as we thought or would like. REM is the ‘guinea pig’ since we are leading the renewable energy provider in the Maldives. It’s a lot of work, but we have the advantage of being very involved in the process,” Nasheed stated.

Collaborative solar programs

A handful of solar PV programs have taken root on islands throughout the Maldives over the past year.

Recently, Renewable Energy Maldives and the University of Milano-Bicocca launched a renewable energy pilot project on Magoodhoo Island in Faafu Atoll to reduce carbon dioxide emissions by connecting 30 kW of solar PV panels to the island electric grid.

“Through this project, we will in particular have the possibility of reducing fuel consumption, thereby reducing the impact on our economy. Harnessing solar energy means less pollution and less dependence on external energy,” said Naseer Abdulla, Island Councilor of Maghodoo.

The “benefits from the use of renewable energies” project is focused on developing solar panels, low consumption light bulbs, and conducting courses on environmental sustainability. This project aims to reduce dependence on fossil fuels, abate environmental degradation and ensure greater energy self-sufficiency, especially on the more remote islands.

“This project represents a challenge for us to show how the problems of global climate change can be addressed by combining all available forces, the local community and beyond,” stated Paolo Galli, Coordinator of the project and Director of Marine Research and High Education Center (MARHE), and researcher from the Department of Biotechnology and Biosciences of the University of Milano-Bicocca.

“Only with the combined effort of everyone, in fact, can you get a real improvement of the environment and, consequently, the quality of life,” Galli added.

Solar PV systems are profitable and sustainable for local communities as well as Male’, according to REM and the University of Milano-Bicocca.

Diesel delivery and generator maintenance is expensive and problematic, REM’s Managing Director Nasheed explained.

However, every 3 kWh of electricity produced by solar panels saves a liter of diesel. Furthermore, 1,000 illumination points equipped with low power consumption LED light bulbs will lead to an additional savings of about 20 kWh, the University of Milano-Bicocca highlighted.

“People in Male’ use 2 to 3 kW per household daily. When they use solar power generated energy from their own systems, the excess power produced gets sold back to the power grid.

“They become very energy aware since there is a interest to reduce consumption,” stated Nasheed.

REM also explained there are numerous benefits from renewable energy, particularly solar panels, but the government has not focused on marketing these incentives.

“Villingili Island normally has to ‘shed load’ to do diesel generator repair work, but with the solar installations they didn’t have to do that.

“There was no income loss and no power loss during this maintenance period in 2012, which promotes a reliable image for the State Electric Company (STELCO),” Nasheed stated.

REM installed solar panels on six islands in Kaafu Atoll, at their own expense. Under power purchase agreements the 652 KW of power generated from the PV systems was then sold to STELCO for US.25 cents, which is a “considerably lower rate than diesel,” Nasheed explained.

The Japanese government has been involved in a number of renewable energy projects in Male’ and the Atolls as well.

In 2011, the “Project for Clean Energy Promotion in Male’” was launched. This one billion Yen grant is to install a solar rooftop grid-connected PV system on public buildings in Male’, to be completed in 2013.

Additionally, a project conducted by the Japanese government and Global Sustainable Electricity Partnership (GSEP) aimed to install a 40kW solar PV grid-connected system on Dhiffushi Island in Kaafu Atoll.

Government solar projects

Since early 2012, the Maldivian government has overseen the initial stages of a few new renewable energy projects.

The Ministry of Environment in conjunction with the Ministry of Finance has issued a prequalification application for the “Solar Maldives Programme.” This project aims to “design, build, finance, own, operate and transfer grid-tied solar photovoltaic systems for integration with diesel generators on 15 islands” in the south, north, and upper north provinces.

“As part of the National Development strategy, the Government of the Republic of Maldives has been planning to transform the electricity sector though private sector investments in renewable energy development on a large scale under its Sustainable Private Investments in Renewable Energy (SPIRE) Project,” reads the application.

The government has also received bids to install a 300 kW grid connected solar PV system on Thinadhoo Island, the regional capital of Gaaf Dhaal (Huvadhoo) Atoll. This is part of the “Clean Energy for Climate Mitigation (CECM) Project” financed by the Climate Change Trust Fund (CCTF) – a collaboration between the Maldivian government, World Bank, European Union (EU) and the Australian Agency for International Development (AusAID).

“The system is expected to meet 30 percent of the peak day time demand of electricity and will offset approximately 300 tons of carbon dioxide annually,” states the Ministry of Environment.

The Ministry of Environment was unavailable for comment at the time of press.

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Finance minister claims “cash flow” issues behind delay in clearing Male’ City Council utility debts

Finance Minister Abdulla Jihad has claimed that a delay in clearing debts owed to various utility providers by Male’ City Council (MCC) is the result of a “cash flow” issue facing his department.

On Saturday (December 22), the MCC revealed that it owed an outstanding electricity bill of MVR 3.9 million (US$ 254,569) to the State Electricity Company Limited (STELCO).

A further MVR 400,000 (US$ 26,109) is also owed by the MCC to telecommunication service provider Dhiraagu, who earlier this week disconnected all telephone and internet services in the council’s offices.

Finance Minister Jihad yesterday (December 24) blamed “cash flow” issues for his ministry’s failure to clear the MMC’s debts.

“We are in the process of relieving the funds, however we have had some cash flow issues and that is why there has been a delay in the clearing the MCC’s debt.

“We are working to clear the debt in the next couple of days,” Jihad told Minivan News.

Asked yesterday whether the government lacked the money to repay the bills, Jihad replied: “The government has to manage the cash flow, they make the payments. There is a cash flow issue.”

MCC Mayor ‘Maizan’ Ali Manik Manik previously claimed that the outstanding payment owed to STELCO by the MCC threatens to leave all council owned properties and utilities – including street lights – without power.

Speaking to Minivan News today (December 25) Manik said that he had personally told members of the Finance Ministry to make a “settlement” with all the utility companies that are currently owed money.

“I told the ministry that if they don’t have the cash flow to pay these debts, then they should speak to Dhiraagu and STELCO and make a settlement,” he said.

“Even if it means saying that they will be paid in a month’s time, even a year’s time, anything is better than the current situation. I have a feeling we are going to be in darkness after December 27.”

Mayor Manik has previously told Minivan News on December 22 that MMC had filed all necessary documents and paper work with the finance ministry in order for the outstanding bills to be paid.

He claimed that having spoken to Jihad about the issue at the time, the finance minister had assured him that both the STELCO and Dhiraagu bills would be paid by his ministry on December 23.

However, STELCO Media Co-ordinator Abdulla Nazir revealed that as of December 23, no money had been deposited by the finance ministry.

Dhiraagu disconnection

On Thursday (December 20), local media reported that Dhiraagu had disconnected all phone and internet services it provided to the MCC due to unpaid bills.

MCC member Ibrahim Shajau claimed that over MVR 400,000 (US$ 26,109) is owed by the council to Dhiraagu, alleging that the Finance Ministry had failed to release the funds.

“We have sent all relevant documents to Finance Ministry. It’s up to [them] to pay the money. Dhiraagu said that Finance Ministry had not paid the money,” he told Sun Online.

Dhiraagu Marketing and PR Ibrahim Imjad Jaleel told local media that the services were disconnected after advising the council on numerous occasions to pay their bills.

“We disconnected the services today after giving them time even today to pay the bills after the offices opened. We had to cut off our services after their failure to pay any amount after several days of discussions. We are trying with our customer even now, to find a way to resume the services,” he said.

STELCO debt

Meanwhile, STELCO Media Coordinator Abdulla Nazir revealed that MCC had a “long history” of outstanding payments, adding that the stated figure of MVR 3.9 million was only part of the overall debt owed to the company.

“STELCO has received no money so far. There are many months of outstanding debt from MCC, more than the MVR 3.9 million we have asked for,” Nazir said. “While we have received no statement or payment from the Finance Ministry, we have received a letter from MCC dated December 19. They said their bills have been sent to the Finance Ministry, and they have asked the ministry to settle the outstanding payments.”

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Male’ could face street light black out over unpaid electricity bill, city mayor claims

The city of Male’ could face its street lights being “switched off” should an outstanding MVR 3.9 million (US$ 254,569) electricity bill fail to be paid by December 27, Male’ City Council (MCC) Mayor ‘Maizan’ Ali Manik has said.

The outstanding payment owed to State Electricity Company Limited (STELCO) by the MCC threatens to leave all council owned properties and utilities –which includes street lights – without power, Manik today claimed (December 22).

Earlier this week, unpaid bills to telecommunication service provider Dhiraagu resulted in the MMC having its telephone and internet services disconnected by the company.

STELCO have since denied claims that they will cut the MCC’s power, but has stated that the company “cannot say what will happen if the bill remains unpaid”.

Speaking to Minivan News, Mayor Manik blamed the Finance Ministry for the lack of payment, claiming that the government body had failed to release the funds despite the MCC completing all relevant documents needed to do so.

“I sent a letter to the [Finance] Ministry last week following one the MCC received from STELCO saying they will cut our electricity if the bill is not paid.

“When I spoke with [Minister of Finance and Treasury] Abdulla Jihad yesterday, he gave me no reason as to why the payments had been delayed. He must have known about the bills because of all the letters we have sent him.

“He told me that both the STELCO and Dhiraagu bills will be paid tomorrow (December 23),” claimed Manik.

Finance Minister Abdulla Jihad and Economic Development Minister Ahmed Mohamed were not responding to calls from Minivan News at time of press.

MCC “long history” of debt

STELCO Media Co-ordinator Abdulla Nazir meanwhile said that MCC had a “long history” of outstanding payments, adding that the stated figure of MVR 3.9 million was only part of the overall debt owed to the company.

“STELCO has received no money so far. There are many months of outstanding debt from MCC, more than the MVR 3.9 million we have asked for.

“While we have received no statement or payment from the Finance Ministry, we have received a letter from MCC dated December 19. They said their bills have been sent to the Finance Ministry, and they have asked the ministry to settle the outstanding payments,” Nazir told Minivan News.

However, Nazir denied Manik’s claims that STELCO had warned the MCC it faced having electricity disconnected. However, in accordance to STELCO’s regulations, Nazir stated that any public or private organisation failing to pay its electricity bills was at risks of having its power cut off.

Dhiraagu debt

On Thursday (December 20), local media reported that Dhiraagu had disconnected all phone and internet services it provided to the MCC due to unpaid bills.

MCC member Ibrahim Shajau claimed that over MVR 400,000 (US$ 26,109) is owed by the council to Dhiraagu, alleging that the Finance Ministry had failed to release the funds.

“We have sent all relevant documents to Finance Ministry. It’s up to [them] to pay the money. Dhiraagu said that Finance Ministry had not paid the money,” he told Sun Online.

Dhiraagu Marketing and PR Ibrahim Imjad Jaleel told local media that the services were disconnected after advising the council on numerous occasions to pay their bills.

“We disconnected the services today after giving them time even today to pay the bills after the offices opened.  We had to cut off our services after their failure to pay any amount after several days of discussions. We are trying with our customer even now, to find a way to resume the services,” he said.

Earlier in October, STELCO disconnected the power supply to state broadcasters Television Maldives (TVM), Voice of Maldives (VOM) as well Male’ City Council over a failure to pay overdue bills.

MCC member Ibrahim Shujau told newspaper Haveeru back in October that the delay in settling the bill was again down to the Finance Minsitry.

STELCO permit dispute

STELCO and MCC clashed earlier this month when the electricity company filed a case with the Civil Court requesting it invalidate MCC’s decision to disallow issuing permits to the company.

In a statement released Wednesday (December 12), the state electricity provider stated that the lawsuit was filed because the MCC had blocked the company from providing some of its services, resulting in disruption for customers in the capital.

The disallowed permits are needed to provide electrical services to properties around the capital.

STELCO has argued that the MCC’s decision lacked any legal grounds and therefore requested the court to decide if the decision was valid or not. It also requested the court invalidate a letter sent to STELCO by the MCC informing it of the decision, so that it could resume its services.

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Finance Minister to be summoned to committee

Parliament’s Finance Committee decided on Wednesday to summon Finance Minister Abdulla Jihad to the committee before the annual state budget for 2013 is submitted to parliament.

Local daily Haveeru reported last week that members of the public accounts oversight committee decided that the minister should be questioned over MVR 31 million (US$2 million) withheld from the Male’ Health Corporation (MHC), which was reportedly allocated to pay electricity bills for the Indira Gandhi Memorial Hospital (IGMH).

The committee did not however set a date for summoning the minister.

At a meeting of the Government Oversight Committee on Tuesday night, state institutions with overdue electricity bills blamed the Finance Ministry for withholding funds.

The health corporation had the largest unpaid electricity bill with MVR 31 million (US$2 million) owed to the State Electricity Company (STELCO).

STELCO officials informed the Government Oversight Committee that various state institutions owed the government company a total of MVR 174 million (US$11.3 million) in unpaid electricity bills.

Auditor General Niyaz Ibrahim meanwhile told Sun Online last week that the annual budget was submitted to parliament with only three weeks to assess the planned expenditure, which was not enough time to seek expert advise for a comprehensive assessment.

“We believe that the budget should be presented to parliament latest during the first week of October,” Niyaz was quoted as saying.

Niyaz suggesting that passing the budget before the end of December resulted in problems with executing the budget items.

Niyaz also insisted that government projects should only be financed by government revenue.

“The law states that expenses can only be made if they are included in the budget. Anyone who releases funds otherwise, is committing a crime. Legal action should be taken against them. The government will not be responsible for that. It is the person’s fault,” he said.

Niyaz went on to say that he did not agree with the government obtaining loans to pay civil servants’ salaries.

“Loans should be obtained for capital expenses. These problems can only be solved by reducing recurring expenses,” the Auditor General was quoted as saying.

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State institutions blame Finance Ministry for unpaid electricity bills

Senior officials of state institutions summoned to parliament’s Government Oversight Committee on Tuesday night blamed the Finance Ministry for unpaid electricity bills to the State Electricity Company (STELCO).

STELCO Chief Technical Officer Dr Mohamed Zaid told the committee that local councils informed STELCO that funds allocated in their annual budgets were only enough to pay electricity bills for two or three months.

Zaid said discussions with the government have been ongoing since STELCO’s board made a decision to disconnect electricity from state institutions with large overdue bills.

The company was owed MVR 174 million (US$11.3 million) from various state institutions, he said.

While 78 percent of STELCO’s expenditure was on diesel, Dr Zaid revealed that the company owed MVR 132 million (US$8.6 million) for oil purchased on credit, including MVR 34 million (US$2.2 million) for oil bills currently overdue.

Among the institutions with the largest outstanding bills, the Male’ Health Corporation (MHC), which operates the Indira Gandhi Memorial Hospital (IGMH), owes STELCO MVR 31 million (US$2 million) for 20 months of unpaid bills while the Maldives Broadcasting Corporation (MBC) owes MVR 7.1 million (US$460,000) for the past five months.

Speaking at the committee, Male’ City Councillor Aimon Ismail said the Finance Ministry did not provide MVR 6.74 million (US$437,094) requested by the council for electricity costs in 2012. The Male’ City Council is responsible for paying electricity bills for mosques, public parks and street lights in the capital.

Meanwhile, newspaper Haveeru reported yesterday (Wednesday) that parliament’s Finance Committee decided to give the Finance Ministry a week to settle MBC’s outstanding bills in addition to asking the Auditor General’s Office to conduct a special performance audit of the state broadcaster.

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Rising oil price forces STELCO to call in US$10 million in unpaid government bills

Chief Technical Officer of the State Electricity Company (STELCO) Dr Zaid Mohamed has said that the problem of state run companies not paying their electricity bills is a long term one, made more urgent by recent rises in the price of oil.

“This problem has gone for a long time – a couple of years but lately the bills have been getting higher,” said Zaid.

Zaid said that the recent rise in fuel prices was beginning to threaten the company’s ability to operate and so the board made the decision to disconnect certain companies.

The most recent figures from the Maldives Monetary Authority (MMA) show the price of crude oil to have risen 9 percent in the last month and 6 percent between August 2011 and August 2012.

STELCO has since started discussions with the government to resolve the issue.

“We have payments to make to our suppliers,” said Zaid, who was reluctant to discuss individual clients while the company was holding discussions with the government.

However, local media reported earlier this week that STELCO had sent staff to both the Maldives Broadcasting Corporation (MBC) and the headquarters of Malé City Council (MCC) to disconnect their electricity.

MCC councillor Kareem told Minivan News that the money had now been sent to the finance ministry.

MBC have released a statement blaming the government for a lack of financial assistance resulting in the possible suspension of its services – Television Maldives (TVM) and Voice of Maldives (VOM), reported Haveeru.

The statement added that it had received warnings for non-payment of bills from several other service providers.

“The average monthly revenue of this corporation during the year has been MVR1.6 million. Due to the highlighted financial difficulties most services and other items had been sought on credit,” the statement was reported to have read.

Minivan News was unable to obtain comment from the Finance Ministry regarding this matter at the time of press.

Haveeru reported that STELCO was owed MVR7.1 million (US$460,000) and MVR6.8 million (US$440,000) by MBC and the MCC, respectively.

The paper discovered that STELCO is owed MVR150 million (US$10 million) from various state institutions, including the Malé Health Service Corporation (MHSC), the police and the Maldives National Defence Force (MNDF).

Oil dependency

The Maldives dependency on oil was discussed yesterday by President Dr Mohamed Waheed Hassan at the World Energy Forum in Dubai.

“A development path primarily based on expensive diesel generated electricity is unsustainable in any country, let alone a small country like Maldives,” said Waheed at the forum’s opening ceremony.

“Today, we spend the equivalent of 20 percent of our GDP on diesel for electricity and transportation. We have already reached the point where the current expenditure on oil has become an obstacle to economic growth and development,” he continued.

President Waheed explained that the current price of 35-70 US cents per KW hour meant that the government was being forced to provide “heavy subsidies” to consumers, giving little option but to move towards a low carbon alternative.

The Maldives Energy Authority recently announced that its US$138 million project would convert ten islands within the country entirely to renewable energy with 30 percent of the total energy demands of a further 30 islands provided from renewable sources.

“Under this strategy, through installation of up to 27 megawatts of renewable electricity, we will be saving on the use of 22 million liters of diesel per year and reduce up to 65,000 tons of carbon dioxide emissions each year,” Waheed explained in Dubai.

“In addition we will be making significant savings from the heavy fuel and other electricity usage subsidies that are currently in place,” he added.

“We are mindful that these programmes cannot be implemented without the engagement of the private sector. In order to make the investment environment more favorable for the private investors, a number of attractive financial guarantee instruments and measures will be adopted.”

Some of the key behind the Scaling-Up Renewable Energy Program (SREP) for the former government said earlier this year that the project had fallen through after political instability following February’s controversial transfer of power had deterred potential investors in the scheme.

The SREP plan revealed the scale of the problem: “If the oil price rises to $150/bbl by 2020, and consumption grows by four percent per annum, oil imports are expected to reach around US$700 million.”

This figure equates to around US$700 million or almost US$2,000 per head of population, whose per capita income – based on the most recent government figures – is just under US$4000.

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