ADB's Work in Maldives   Download Fact Sheet

Maldives is one of the world’s lowest-lying island countries, making it highly vulnerable to climate change. To tackle this, the Asian Development Bank (ADB) is assisting Maldives to improve climate resilience and achieve net zero emissions by 2030 through the increased use of renewable energy.

Maldives became an ADB member in 1978. To date, ADB has committed 110 public sector loans, grants, and technical assistance totaling $454.3 million to Maldives. Cumulative loan and grant disbursements to Maldives amount to $287.53 million. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s current Maldives sovereign portfolio has 3 loans and 9 grants worth $180 million.

The ongoing Greater Malé Waste–to–Energy Project, supported by $73.4 million in loans and grants, will develop a disaster- and climate-resilient waste management facility for Greater Malé and neighboring outer islands while improving institutional capacity in delivering sustainable waste-to-energy services and environmental monitoring.

As of 2022, the ADB-financed Preparing Outer Islands for Sustainable Energy Development (POISED) Project and additional resources have contributed to reducing greenhouse gas emissions by about 36,000 tons. This was made possible through the installation of photovoltaic hybrid energy systems covering 70 outer islands in Maldives. Work is underway to install them in the remaining 90 outer islands. The project — Maldives’ first renewable energy road map — also supports innovative and cross-sectoral interventions for marine transport and fisheries. ADB is also designing the Accelerating Sustainable System Development Using Renewable Energy Project, which will support some outer islands already covered by the POISED project, to increase the use of renewables through technological advances. At least 20 megawatts of private sector investments in floating and terrestrial photovoltaic systems in 20 outer islands will be mobilized. The project will pilot emerging technologies that have potential for future replication.

To support the preparation and implementation of energy projects in Maldives, in October 2022 ADB provided $1 million in supplementary technical assistance covering training and skills building for government agencies.

In addition to climate change and renewable energy support to Maldives, in September 2022 ADB extended $10 million in financing to improve the resilience and responsiveness of the country’s health system through the Asia Pacific Vaccine Access Facility. The project will support investments in the storage, distribution, delivery, and administration of coronavirus disease (COVID-19) vaccines. The project also has a capacity building component.

Aerial view of rooftop solar panels in Haa Dhaalu Atoll, Nellaidhoo Island. Photo: ADB

ADB committed a $7.5-million grant in December 2022 for its first holistic gender equality support project in Maldives. The Strengthening Gender Inclusive Initiatives Project will increase access to sustainable, gender-responsive social services. It will do this by improving gender equality and social inclusion statistics, integrating gender-responsive budgeting in government systems, strengthening the capacity of social services, introducing new partnerships for delivering social services, and building shelters for victims of domestic and gender violence.

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Maldives as of 31 December 2022 was $13.59 million representing 0.11% of ADB’s total private sector portfolio.

In 2022, ADB agreed on the first ever private sector infrastructure financing transaction in Maldives — the Dhiraagu Telecommunication Connectivity Enhancement Project. The $20-million loan facilities comprises two tranches: a $9.1-million facility to support Dhiraagu’s general capital expenditure and working capital requirements; and a recently signed second $10.9-million that will finance further general capital expenditure and connect Maldives to the SMW6 underwater sea cable system.

Operational challenges. Maldives’ fiscal and debt positions have deteriorated since 2020. An already high level of debt ballooned due to spending to fight the COVID-19 pandemic, falling government revenue, and a large increase in fuel subsidies because of the sharp rise in global oil prices. To tackle this, ADB is providing support to improve the sustainability of public debt, enhance tax transparency, and strengthen tax policy and administration. In April 2022, ADB provided technical assistance of $1.5 million to build the technical capacity of Maldives and other developing member countries for assessing debt sustainability and management strategies.

Weak institutional capacity and the lack of interagency coordination hinder the implementation of ADB programs in Maldives. Through training, ADB is helping improve project readiness and portfolio management. This is supplemented with regular portfolio review meetings with executing agencies.

Knowledge Work

ADB provided support for drawing up Maldives’ forthcoming Fifth Tourism Master Plan, expected to define strategies and actions to strengthen the tourism industry and provide direction for its development. In a seminar during ADB’s annual meeting in 2022, representatives of the Government of Maldives described the country’s experience in successfully restarting tourism during the pandemic.

The Asian Development Outlook 2022, an ADB flagship publication, examined the latest economic and development issues in Maldives to assist policy making. In its advisory role, ADB assisted the government in the implementation of policy reforms, which included improving the mobilization of domestic resources, promoting trade facilitation initiatives, improving solid waste management, and strengthening gender-responsive processes, practices, and services.

  ADB Projects in Maldives Project data sheets for loans, grants, TAs

Future Directions

ADB’s future support for Maldives will be aligned with the following objectives of its country partnership strategy, 2020–2024: enhancing public sector efficiency and fiscal sustainability, strengthening competitiveness and diversifying the economic base, and improving the quality of life of island communities while ensuring environmental sustainability.

ADB support to Maldives for 2022–2024 focuses on renewable energy and climate change adaptation; and social development including health, gender, education, social protection. Other key areas of support are infrastructure services, trade, public–private partnerships, and public finance management. A major part of the resources will be channeled toward building climate resilience.

Last updated: 28 April 2023