Maldives (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total Installed Electricity Capacity (2010): 109.3 MW 

Total Primary Energy Supply (2008): 348.6 ktoe
Diesel Fuel: 70%

Like most Small Island Developing States (SIDS), the republic of the Maldives has abundant renewable energy (RE) resources but its use is minimal beyond solar water heating in resort islands.  The country depends overwhelmingly on petroleum imports for its electricity production. Firewood (e.g., dried branches) is also a main cooking fuel in most of the outer islands. Most urban households use LPG and kerosene for cooking. In the outer islands, the main source of energy for domestic purposes has been biomass. Nowadays, more outer island households are using kerosene and LPG for cooking instead of biomass materials (shrubs and coconut husks) .

The bulk of the fuel imports to the country are diesel fuel oil, which is mainly used for power generation, both by the state power utility (STELCO), and by close to 1,000 other electricity generators in the outer islands . This trend reflects the increased electrification of the islands, as well as the growth in tourist resorts. Due to the increased use of electricity and transportation, national energy consumption increased in the Maldives, from 223,970 tons of oil equivalent (toe) in 2002, to 348,610 toe in 2008.  60% of all electricity produced in the country in produced and consumed in the resorts. Until recently, the State Electric Company (STELCO) supplied power to 32 main population centres of the Maldives. Power generation for Malé, the capital, accounts for approximately 72% of all generated power for inhabited islands. Power demand in Malé is expected to grow rapidly, at a rate of more than 11% per annum .  48.3% of the installed electricity generation capacity is in the resort islands.

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The Maldives is almost completely dependent on fossil fuel imports for power generation which presents a challenge to the goal of carbon neutrality by 2020. Fossil fuels, primarily petroleum, provide the majority of energy used in the Maldives for generation of electricity (diesel), road and marine transport (gasoline, diesel), aviation (jet kerosene), and cooking, hot water and other uses (Liquefied Petroleum Gas, kerosene) .

In 2011 Maldives spent $240M on oil based imports (excluding bunker fuels). In 2012 this is expected to reach $350M, approximately 20% of GDP. If the oil price rises to $150/bbl by 2020, and consumption grows by 4% per annum, oil imports are expected to reach around $750M or almost $2,000 per head of population. This is clearly unsustainable. Therefore the twin objective of the carbon neutral policy, other than being a flagship for climate change, is to make the economy largely independent of oil. Decarbonisation is at least as much a matter of national economic security and social welfare as it is a matter of environmental concern . 

Close Reliance

Extend network

The majority of the Maldivian population have access to electricity. Electrification was estimated at 93% in 1998. 200 inhabited islands have electricity supply but only about 23 have continuous supply.

The dispersed nature of the islands does not allow for the installation of a single national grid. Each island operates and maintains its own power generation and power distribution system. The initial investment costs and subsequent running costs of powerhouses on other, smaller islands are very high .

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Capacity concerns

The Maldives has among the highest power generation costs in South Asia currently averaging in excess of $0.30 per kilowatt-hour, several times higher than those of some other countries in the region. Petroleum-based fuels are a major import in the Maldives, with the country almost entirely dependent on these imports for power generation. Fuel imports comprise nearly 16% of the country’s gross domestic product and this has resulted in the Maldives facing the impact of significant fluctuations in international fuel prices .

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Renewable energy

Solar Energy
Although the Maldives' equatorial exposure to sunlight would seem to make the country especially conducive to solar power, this source has scarcely been tapped to date. Solar heating is used primarily in the resorts, where approximately half of all hot water is solar heated . With an average insolation across the islands of 5.0-5.5 kWh/m2/day, the Maldives is well-placed to utilise solar energy. Current development is slow, although some resorts have begun to generate power using solar PV, for example at Soneva Fushi, where 70 kW have been installed, with plans to quadruple the size of the system  by 2010.

Biomass Energy
In 2004, a survey for the Ministry of Communication, Science and Technology concluded that as much as 10-15% of the Maldives' energy requirement (excluding transport) could be met by exploitation of biomass. At present, only a quarter of this potential is being realised . The capture and utilisation of landfill gas has also been identified as a potential energy source, in addition to biogas digesters for household wastes, and the potential for combined heat and power systems, utilising biomass.

Wind Energy
The performance of wind systems is critically dependent on the wind speed. A wind resource map was made by the US National Renewable Energy Laboratory (NREL) based on satellite data. The measurements done at Vilingili, Meedhoo and Eydhafushi generally show somewhat lower wind speeds than the NREL estimates, but analysis by the Energy Consulting Network shows that wind-diesel hybrid systems can be feasible in comparison with stand-alone diesel generator sets under the right conditions in islands in the windy belts (with wind velocities above 5 metres per second) and on islands with more than 40 households. Current developments include a 75 MW, 30-turbine installation to power the capital and the surrounding area entirely.

No assessment has currently been made as to the hydropower or geothermal potentials of the islands.

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Energy efficiency

In 2009, average electricity consumption in the inhabited islands was 400 kWh/inhabitant (excluding resorts). In the Male’ region, it was 1,678 kWh/inhabitant.  Per capita electricity consumption is relatively uniform except in a few islands due to high industrial activity, higher living standard and economic activity, and higher housing energy consuming in islands affected by the tsunami in 2004. These high energy consuming islands include Male’ Greater Area, Vaikaradhoo, Kudarikilu, Himmafushi, and Vilufushi.  Energy intensity is high on resort islands,  averaging 4,460 kg of diesel per bed with  energy used for air conditioning (~40 %),  freezing (~10 %), desalination (~10 %), lighting  (~10 %), and laundry (5-20 %) .

According to the first greenhouse gas inventory of the Maldives, total greenhouse gases emissions amount to 665,000 tons of carbon dioxide equivalent. Improvements in energy efficiency and the introduction of alternative sources of energy are therefore high priorities. The government has identified the necessity of energy efficiency measures, and is currently instituting new building regulations, and in particular, for the islands' largest industry, tourism. In addition, new standards and labelling conventions are being implemented for refrigeration and air conditioning equipment.


  • Opportunities for the use of high-efficiency industrial refrigeration units, proposed through UNEP GHG-emission reduction activities.


  • Introduction of waste-to-energy systems producing methane biogas in he electricity grid, to transition the electricity industry towards carbon neutrality.
  • Use of biomass. Agri-waste, solid waste or/and fuel wood.


  • Recommendations for rethinking areas of transport in the nation, including the development of electric public transport in the capital, and cycling promotion.


  • Assessment, development and establishment of an energy labelling program for appliances and equipment, as part of the HCFC Phase-out plan.
  • Newly-developed building code, with provisions for improvements in the energy performance of new buildings.


  • Advocacy and awareness-raising programs to foster an environment for energy saving projects at a national and local level.
  • Minimum air-conditioning temperatures in public buildings.
  • Energy auditing for selected offices.
Close Energy efficiency


The government owned State Electric Company (STELCO, is the largest provider of electricity. It operates 15 power systems on 18 islands all of which are fuelled by oil.  STELCO is responsible for generating power for 46% of the population, mainly in Malé and on 31 other islands. As of March 2009, STELCO had an installed capacity of 53 MW, and over 70% of the electricity it generated was consumed in Malé. The rest of the country receives its electricity from Island Development Committees (IDCs), private companies and non-governmental organisations (NGOs). Power supply on resort islands is provided by the resort operators, who account for 56% of the diesel that is consumed. STELCO accounts for 24% of the diesel that is consumed. Regular and continuous electric power supply is available in only 24 of the 200 inhabited islands . Each electric provider is not only responsible for generating power but also distributing it.

Most inhabited  islands have had their own IDCs or Independent Power Producers (IPPs) to provide electricity to the local community from fuel-driven  generators with installed capacity ranging from less than 100 kilowatt (kW) to 2-3MW. Recently, the government has established six regional utilities - in addition to STELCO - to provide electricity and other services including water and sewerage and has started a process of consolidating  the power sector .

Oil and gas
The Maldives National Oil Company Ltd. (MNOC) is a subsidiary of the State Trading Organisation (, and is responsible for all activities relating to the oil and natural gas sectors in the country, including exploration and production, as well as refining and distribution.

Close Ownership


Following the democratic elections of 2008 a decision was taken to decentralize the power sector. As a result seven distinct utility companies were set up –each administering a separate geographical area. Of these, the largest by far is STELCO, which supplies Maléa and the nearby islands. All utilities are owned at present by the Ministry of Finance though there is intent at some stage to move to introducing private capital .

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Energy framework

The Government of Maldives (GOM) has pledged to be carbon neutral by 2020 while enhancing greater energy security and reaping economic, social and environmental benefits. Towards achieving  this goal, the Ministry of Housing and Environment (MHE) formulated the Maldives National Energy  Policy & Strategy in October 2010 to:

  • Provide all citizens with access to reliable and sustainable  energy services at lowest possible cost;
  • Achieve carbon neutrality in the energy sector by year 2020;
  • Promote energy conservation and energy efficiency and
  • Increase national energy security.  Energy security is a key concern as the country spent 15% of GDP on fossil fuel imports in 2009 .

The Government has formulated a National Energy Policy, with the following objectives :

  • Make energy supply secure and affordable,
  • Reverse the increasing dependency on diesel powered electricity generation and  limit climate change,
  • Become carbon neutral in the energy sector by 2020,
  • Provide for the reliable delivery of energy, and safeguard against energy emergencies,
  • Invest in advanced energy technologies that will enable carbon neutrality and improve energy efficiency,
  • Ensure 50% of the electricity is supplied from renewable sources by 2015,
  • Achieve a 50% reduction by 2015 in energy sector GHG emissions, compared to 2000 levels,
  • Acquire and demonstrate sound water technologies suitable for a small coral island environment,
  • Reach a saving of 7.5% on final energy consumption over 10 years until 2020, through efficiency.

Energy Action plan 2009-2013
The Energy Action plan 2009-2013 includes a series of actions, measures, programs and targets to be met over the next five years (to 2013) to achieve greater energy efficiency and conservation awareness, together with reductions in CO2 emissions to meet government targets. The Action Plan intends to persuade government, private organisations and individual citizens that energy conservation is the responsibility of all.

Renewable Energy Technology Development and Application Project (RETDAP)
RETDAP is designed to address barriers to the uptake of RETs, and to lower them in order to facilitate the widespread utilisation of RE resources in the country. The project is co-financed by the Global Environment Facility (GEF) with the United Nations Development Programme (UNDP) as the implementing agency, and the Ministry of Environment, Energy and Water (MEEW) as the national executing agency. The Project Document mentions as the development goal: “the growth rate of greenhouse gas emissions from fossil-fuel-using activities, such as power generation and process/water heating, is reduced through the removal of the major barriers to the development and application of renewable energy (RE)-based systems that can supplant part of the fossil fuel use in the Maldives”  .

Furthermore, under the RETDAP project, the Fund for Renewable Energy System Applications (FRESA) has been launched, funded by the UNDP, in order to provide a financial support mechanism for the development of RE resources in the country .

The Government is embarking on a bold and ambitious program to decarbonise its economy, and free it from dependence on fossil fuels by 2020. The program has two objectives :

  • To free the country from the uncertainties and costs of its oil dependency
  • To demonstrate global leadership in the fight against climate change.

The most likely long-term energy source is solar, and Cabinet has decreed that 60% or more of electricity should come from solar sources.  To meet current needs fully with solar PV would require perhaps 1GWp of installed capacity, with vast energy storage facilities.  The total cost could be of the order of $3-$5Bn.  Some of this will clearly be mitigated by the use of biomass and energy efficiency, but other costs will undoubtedly emerge .

There are fewer than 100 months left to meet the 2020 goal, and 300 islands.  This means that 3 islands a month need conversion to renewable energy.  To catalyse this process, Cabinet has approved the Renewable Energy Investment Framework (REIF) to set the direction of energy investment for the coming decades .

The first step towards implementing the REIF will be funded by donors through SREP (Scaling up Renewable Energy Program). The Government has been allocated $30M under this program, which aims to help transform the renewable energy sector from subsidy dependent sideline to viable dynamic mainstream.  In preparation for receiving these funds the Government is aiming to develop an Investment Plan (the SREP IP) by mid-January 2012 . 

Scaling Up Renewable Energy Program (SREP)
With the announcement of the carbon neutral goal and an expected transition towards clean sources of fuel, significant investments are envisaged in the electricity sector of the Maldives by 2020. The Maldives is also one of the two Asian countries selected for the Scaling Up Renewable Energy Program (SREP), A targeted program of the Strategic Climate Fund within the framework of the Climate Investment Funds (ADB and the World Bank Group will be supporting the program in Maldives).  It is expected that concessional climate funds routed through the multilateral development banks would increase private sector financing to support investments in the Maldives, particularly in renewable energy (mainly solar) and energy efficiency.

nbsp; this goal, the Ministry of Housing and Environment (MHE) formulated the Close Energy framework

Energy debates

In preparation for receiving funds from the Scaling up Renewable Energy Program (SREP), the Government is aiming to develop an Investment Plan (the SREP IP) by mid-January 2012 .

Close Energy debates

Energy studies

The Maldives is part of the South Asian Regional Initiative for Energy under USAID (SARI/E), a program that promotes energy security in South Asia through three focus areas :

(1) cross border energy trade,
(2) energy market formation, and
(3) regional clean energy development.

Through these activities SARI/E facilitates more efficient regional energy resource utilisation, works toward transparent and profitable energy practices, mitigates the environmental impacts of energy production, and increases regional access to energy. SARI/E countries also include: Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, and Sri Lanka.

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Role of government

The Ministry of Planning and National Development
It is responsible for overall planning, including the energy sector.

Ministry of Energy, Environment and Water
In 2005, the Ministry of Communication, Science and Technology (MCST) was restructured into the Ministry of Energy, Environment and Water (MEEW), gaining a better focus on the energy sector, and also on the inter-linkages between energy, the environment and water. The MEEW promotes energy conservation and efficiency in production and usage and also strives to reduce the dependence on imported fossil fuels. 

Ministry of Trade and Industries
The State Electric Company, the Maldives Electric Bureau, and the State Trade Organisation are affiliated to this ministry.  (

Ministry of Home Affairs, Housing, and Environment
This ministry is mandated to regulate activities affecting the (conservation of the) environment. (

Close Role of government

Government agencies

The Ministry of Energy, Environment and Water have the specific role in energy supply and environmental protection. The STELCO are also responsible, as a government department, for conducting their affairs in the power sector according to government policy, primarily through energy-saving campaigns and awareness-raising measures.

The Renewable Energy Investment Office (REIO) 
The REIO has been established by Cabinet in 2011 to align the policies and actions of the three ministries most relevant to energy and carbon neutrality -the Ministry of Finance, the Ministry and Housing and Environment, and the Ministry of Economic Development. The REIO will be governed by a committee of these three ministers, and chaired by the Minister for Economic Development. Funding will be made available from the 2012 budget to staff REIO With a mixture of Maldivians and international staff. The REIO will set policy, allocate budget funding, and ensure coordination across ministries for all renewable energy and energy efficiency activity.

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Energy procedure

A Finnish company, WinWind, has proposed building a 25 MW wind farm on the Maldives’ Gaaf Alif atoll, while Indian wind turbine maker Suzlon is investigating the feasibility of constructing a 15 MW wind farm on the Addu atoll. Japan has provided financial assistance for a project to install 1 MW of rooftop solar arrays on schools and government buildings in Malé, the country’s capital .

International donors, meanwhile, have promised US$30 million for renewable projects. Scotland and the Maldives have signed an agreement to investigate the potential for developing wave and tidal power in the archipelago, according to the president’s office.

To provide electricity when there’s no wind speed or solar radiation, the Maldives is considering biomass power plants that would run on coconut husks. Outlying islands, however, would probably have to continue the combustion of oil until the price of batteries used to store renewably-generated energy became affordable.

The Ministry of Environment, Energy and Water is executing the Outer Island Electrification Project, with loans financed by the Asian Development Bank.

A recently signed contract should connect the main islands in the Malé area with a 132kV link, coupled to a 20MW wind farm and a gas back-up power station. This project will provide the opportunity for biomass and
other sources of power to feed the Malé area demand from adjacent islands. These include a 3.7MW waste to energy project has been contracted for Thilafushi, and a possible very substantial solar roof programme on the new warehouses proposed for Thilafushi .

There are a number of other RE projects in preparation or proposed, but most of these are held up as a result of poor contracts, lack of guarantees by central government, or poor understanding by utilities of how to enter and manage such contracts. A World Bank funded project to introduce a low level of solar PV 200kW (about 30% of peak load) on Thinadhoo Island is currently in progress. Information from this project will be used to inform the development of the projects under SREP. The project will also conduct energy audits and surveys, demonstrate high efficiency appliances, and prepare an energy efficiency action plan for Thinadhoo .

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Energy regulator

The Maldives Energy Authority (MEA) was established in April 2006, which was followed by the abolishment of the former Maldives Electricity Bureau (MEB). The MEA functions under the MEEW, forming a new regulatory body, with a broader mandate for increased effectiveness of energy interventions.

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Degree of independence

The MEA is a subsidiary organisation of the MEEW, with little, if any, operational or financial autonomy. MEA has the remit of regulating the energy sector but is constrained to regulating the activities of STELCO and part of the activities of the regional utilities. MEA in its current form lacks the proper regulatory framework and legal mandate to effectively regulate the sector . 

In October 2011, the World Bank announced support of $200,000 for the MEA. This support is expected to cover governance arrangements, review of existing power purchase agreements, development of the technical regulatory framework, standards of performance, and demand-side energy efficiency regulations. It will also cover the drafting of an institutional development plan. An investment framework has been approved by the cabinet to support renewable energy investments .

Close Degree of independence

Regulatory framework

Currently, no dedicated framework exists for sustainable energy, nor has a dedicated energy law been established, with all energy planning having been conducted at a policy level until now. Pertinent policy frameworks include the National Energy Policy, which identifies the need for enhanced regulation of the energy sector to improve efficiency, and the Science and Technology Master Plan, which identifies the potential for various renewable energy technologies and their development in the country.

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Regulatory roles

The MEA is responsible for regulating the construction and operation of new power generation infrastructure, and is also involved in the harmonisation of tariff structures, and the formulation of new tariff regimes, for example a life-line tariff to ensure maximum electricity access for the population. In addition, the Authority is responsible for setting standards under the national building code.

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Energy regulation role

Both the MEEW and the Ministry of Home Affairs are responsible for the formulation and implementation of the current national energy policy, which includes, to an extent, measures to regulate the energy sector, including efficiency standards in power generation and distribution, and the creation of an adequate institutional framework to implement Clean Development Mechanisms (CDM) projects.

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Regulatory barriers

There is a need for policies and regulations regarding financial and economic incentives to undertake RET applications in the country. The FRESA has been launched, although the extent to which it is utilised, or has been successful, is unclear. Regulation of the energy sector appears to be in its infancy, with government departments still taking a controlling role in the formulation and implementation of regulations and strategies. In addition, there is a lack of expertise in energy regulation in the country, as identified in the current national energy policy. Capacity-building measures for government officials, and the populace, would lead to improved conditions for the uptake of renewable energy technologies.

Close Regulatory barriers


Centre for Understanding Sustainable Practice. Robert Gordon University, Aberdeen, Scotland. Marine Energy in the Maldives. Pre-feasibility report on Scottish Support for Maldives Marine Energy Implementation. July 2011. [Accessed 10th September 2013]

South Asia Regional Initiative for Energy (SARI/Energy) website. Countries: Maldives, an overview. Available at: [Accessed 10th September 2013]

Department of Climate Change and Energy, Ministry of housing, Transport and Environment. National Assessment Report. 2010. Available at: [Accessed 10th September 2013]

Multilateral Development Bank (MDB): Asian Development Bank (ADB) and World Bank Group (WBG). Scaling-Up Renewable Energy Program for Low Income Countries (SREP). 24-27 January 2011. Available at: [Accessed 10th September 2013]

Republic of Maldives. SREP Investment Plan: Draft 4. 04 January 2012. Available at: [Accessed 10th September 2013]

Asian Development Bank (ADB). Republic of the Maldives: Capacity Development of the Maldives Energy Authority. December 2011. Available at: [Accessed 10th September 2013]

United Nation Environmental Programme (UNEP). Maldives Post-Tsunami Environmental Assessment. Available at: [Accessed 10th September 2013]

Amara, S & Bloembergen R.J. KEMA, Environment and Social Diligence for Preparation of Renewable Energy Efficiency Investment Plan and Bidding for Thinadhoo Island. 9 August 2011. Available at: [Accessed 10th September 2013]

UNDP and GEF. Midterm review: Maldives: Renewable Energy Technology Development and Application Project (RETDAP). Republic of Maldives. Final Version. 25 September 2007. Available at: [Accessed 10th September 2013]

USAID/ SARI/Energy. South Asia Transmission utility Regional Network (Saturn). Transmission Utilities Characterisation Report. 31 December 2009. Available at: [Accessed 10th September 2013]

State Trading Organisation Plc. Annual Report 2003. Available at: [Accessed 10th September 2013]

UNDP. Maldives Press Release: Fund for Renewable Energy Systems Applications (FRESA) launched. 28 January 2008. Available at: [Accessed 10th September 2013]

South Asia Regional Initiative for Energy (SARI/Energy) website. Available at: [Accessed 10th September 2013]

UNDP. Energy and Poverty in the Maldives. Challenges and the Way Forward. 2007. Available at: [Accessed 10th September 2013] Close References