The Maldives has issued its first Special Economic Zone (SEZ) permit to a renewable energy project, paving the way for the development of a 100-megawatt floating solar photovoltaic (PV) farm near Hulhumalé, the government said on Thursday.
The permit was granted to a special purpose vehicle incorporated in the Maldives by Canada-based Abraxas Power Corp, which has extensive experience in the renewable energy sector, the Board of Investments said in a statement.
Project Solar City, as the initiative is known, aims to reduce the Maldives’ reliance on fossil fuels and advance its renewable energy ambitions. The project includes battery storage and a submarine cable interconnection to the main grid in Hulhumalé.
“This initiative aligns with President Mohamed Muizzu’s ambitious target of achieving 33 percent of the country’s electricity demand from renewable sources,” the statement said.
The Maldives, an island nation heavily dependent on imported fuel, saw fuel imports account for 22% of total imports in 2023, with about 80% of that used for electricity generation and marine transport, according to official data.
The government expects Project Solar City to generate estimated savings of US$42 million annually from the national fuel bill. The permit also allows for complementary developments, including commercial real estate and an industrial hub, though renewable energy investments must take priority.
Abraxas Power Corp has committed over US$100 million to the renewable energy component, with the total project investment reaching US$187 million, in line with the requirements of a presidential decree under the SEZ Act.
The developer plans to begin mobilisation by the end of April, with the project expected to become operational by 2027.
“The issuance of this permit marks a significant milestone in the government’s efforts to incentivise sustainable energy solutions and attract private capital for strategic projects under the SEZ framework,” the statement said.
The Maldives has been working to diversify its energy mix as part of broader efforts to mitigate climate risks, with rising sea levels threatening the low-lying island nation.