The government aims to transition 33 per cent of the electricity generated in the Maldives to renewable energy sources by the end of 2028, Finance Minister Hassan Zareer has said.

The target is a commitment made by President Dr Mohamed Muizzu. Presenting the proposed 2027 State Budget to Parliament, Zareer said the government plans to advance the Maldives Solar Development and Energy Storage Solutions Project next year to support the transition to renewable energy.

The solar energy project, which will be implemented under a Public-Private Partnership (PPP) model, aims to generate a total of 250 megawatts of renewable energy. It will also introduce modern energy storage systems, the Minister said.

Zareer said the project is expected to reduce annual oil imports by more than 100 million litres in the coming years. He added that reducing dependence on oil would also lower fuel import costs and government expenditure on fuel subsidies.

The Minister said investment in renewable energy is also intended to protect the national economy from external economic shocks and environmental risks.

He identified rising global oil prices as one of the biggest challenges facing the government, noting that fluctuations in international oil prices affect electricity generation, transportation of goods and the overall cost of living.

“Every change in global oil prices affects electricity generation, the transportation of goods and all aspects of daily life. As oil and electricity prices rise in other countries, many nations are unable to provide electricity around the clock, creating difficulties for their citizens,” Zareer said.

He added that the government has sought to minimize the impact of rising fuel prices on Maldivian households and businesses by absorbing part of the increase rather than passing the full burden on to the public.

However, the cost of fuel subsidies has risen significantly this year due to higher global oil prices. The government estimates that fuel subsidies will amount to MVR 3.8 billion by the end of this year.

According to forecasts by international financial institutions, global oil prices are expected to decline next year. Based on these projections, the government currently estimates that fuel subsidy expenditure will fall to MVR 3.2 billion in 2027.