The government has given the green light to the country’s first Special Economic Zone (SEZ) project, a 150-megawatt renewable energy initiative. This decision marks a significant step towards the nation’s commitment to sustainable energy.

The project, approved by the Board of Investments under the SEZ Act, will see the development of a floating solar power plant capable of generating 150 megawatts of energy. The Investment Board, operating under the Ministry of Economic Development and Trade, is chaired by Minister Mohamed Saeed. The board includes Minister of Tourism Ibrahim Faisal, Minister of Climate Change, Environment and Energy Thoriq Ibrahim, and Minister of Housing, Land and Urban Development Ali Haidar Ahmed.

The project is proposed to be undertaken by the Canadian company Abraxas Power Corp. in collaboration with its technical partner, Sungrow Power Supply Co. Ltd. Abraxas is a Canadian energy transition developer whose team has extensive experience in leading, financing, and solving the challenges associated with energy transition.

The initiative seeks to establish a 150-megawatt floating photovoltaic (PV) power plant and associated civil and electrical infrastructure in the Greater Malé Region. This will be paired with a Li-On battery system and an energy management system, along with investments needed for interconnection to the main power grid, according to the Economic Ministry.

The Initial Permit, which includes the in-principle agreement by the Board of Investments to carry out further studies and assessments, is a crucial step towards the realisation of this strategic project. The government believes this project to be of immense strategic value to the Maldives, as it will significantly contribute to replacing conventional energy sources with renewable sources, according to the ministry.

“Based on current fuel pricing, on an unsubsidised basis, the project is forecasted to save the people of the Maldives approximately US$1.2 billion over 20 years and US$305 million over the next five years which can be allocated to other critical sectors in support of the people of Maldives,” said Abraxas Power Corp. in its initial SEZ application.

The project aligns with President Mohamed Muizzu’s commitment towards generating at least 33 percent of the country’s electricity demand through renewable sources by 2028. President Muizzu made this announcement at the COP Summit held in December 2023 in the United Arab Emirates (UAE). He stated that this endeavour would cost the government US$600 million.

The government envisions the project as a critical driver of foreign currency savings through replacing fossil fuel bills, the ministry said. This, in turn, will provide the country with long-term energy pricing stability and efficiency, a significant economic benefit, according to the ministry.

The previous administration, led by former President Ibrahim Mohamed Solih, had plans to achieve net zero by 2030. The Solih administration had taken substantial steps to achieve this target by keeping on track with their target of reducing emissions by a quarter by 2023. However, it remains unclear if the Muizzu administration plans to proceed forward with the plan to achieve net zero by 2030.