The Maldives has issued its inaugural Special Economic Zones (SEZ) Permit under the SEZ Act in a pivotal move to enhance the nation's energy security and advance its renewable energy ambitions. The permit, sanctioned by the Board of Investments established under the SEZ Act, has been granted to a Special Purpose Vehicle (SPV) incorporated in the Maldives by the Canadian firm Abraxas Power Corp., noted for its extensive expertise in the renewable energy sector.
This authorisation enables Abraxas Power Corp. to develop and operate a 100MW floating solar photovoltaic (PV) project at a lagoon situated approximately 4 to 5 kilometres from Hulhumalé, as detailed in a statement from the Board of Investments. The project also involves investments in battery storage and submarine cable interconnection to the main grid in Hulhumalé.
Aligning with President Dr Mohamed Muizzu's ambitious goal of sourcing 33 percent of the nation’s electricity demand from renewable sources, the initiative is expected to have a significant impact. In 2023, fuel imports constituted 22 percent of the total imports, with approximately 80 percent being diesel for electricity generation and marine transport. Project Solar City is anticipated to play a crucial role in reducing reliance on fossil fuels, potentially saving an estimated USD 42 million annually from the national fuel bill, the statement reads.
In addition to the renewable energy components, the permit allows for complementary developments, including commercial real estate and an industrial hub, provided that investments in renewable energy take precedence, the Board of Investments noted. With a committed investment exceeding USD 100 million for the renewable energy components, the total estimated investment for the project, according to the statement, amounts to USD 187 million, in accordance with the requirements of the Presidential Decree issued under the SEZ Act.
The developer intends to mobilise the project by the end of April this year, aiming for operational status by 2027. According to the Ministry of Economic Development, the issuance of this permit marks a significant milestone in the administration's efforts to promote sustainable energy solutions and attract private capital for strategic projects within the SEZ framework. The administration remains dedicated to creating an enabling environment for innovative and sustainable economic development initiatives, the statement added.