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Cablegate: Maldives: President and Ambassador Launch Pilot Renewable

VZCZCXRO9578
RR RUEHBI RUEHLMC
DE RUEHLM #0056/01 0110831
ZNR UUUUU ZZH
R 110831Z JAN 08
FM AMEMBASSY COLOMBO
TO RUEHC/SECSTATE WASHDC 7490
INFO RUEHKA/AMEMBASSY DHAKA 0630
RUEHIL/AMEMBASSY ISLAMABAD 7618
RUEHKT/AMEMBASSY KATHMANDU 5798
RUEHNE/AMEMBASSY NEW DELHI 1710
RUEHGP/AMEMBASSY SINGAPORE 5715
RUEHBK/AMEMBASSY BANGKOK 3362
RUEHCG/AMCONSUL CHENNAI 8224
RUEHBI/AMCONSUL MUMBAI 5786
RUCPDOC/USDOC WASHDC
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION

UNCLAS SECTION 01 OF 02 COLOMBO 000056

SIPDIS

SENSITIVE

SIPDIS

STATE FOR SCA/INS AND OES
COMMERCE FOR JONATHAN STONE
TREASURY FOR LESLIE HULL

E.O. 12958: N/A
TAGS: ETRD EINV SENV PREL MV

SUBJECT: MALDIVES: PRESIDENT AND AMBASSADOR LAUNCH PILOT RENEWABLE
ENERGY PROJECT USING U.S. TECHNOLOGY

REF: COLOMBO 0039

1. (SBU) Summary: Ambassador joined Maldives President Gayoom
January 7 for the commissioning of a pilot renewable energy project
that uses turbines produced by U.S. company Southwest Windpower.
The hybrid wind/solar/diesel micro-grid power systems replace the
inefficient generators that most Maldivian islands use to produce to
power. The $3 million pilot project has been running successfully
on three islands for three months, demonstrating that renewable
sources are feasible for energy production in Maldives. If the
project continues successfully for another three months, Maldives
authorities intend to invest $90 million to install similar systems
on 90 more residential islands around the Maldives -- offering the
potential for $60 million in U.S. exports. The system's developer
and contractor, Daily Life Renewable Energy, of Singapore, recently
incorporated in the United States in order to strengthen its
partnership with Southwest Windpower. End summary.

2. (U) On January 7, Ambassador joined Maldives President Gayoom for
the formal launch of a pilot renewable energy project on the far
northern residential island of Uligam. The event marked the
official commissioning of a unique hybrid wind/solar/diesel energy
system developed by Singapore-U.S. company Daily Life Renewable
Energy. The system produces 48kw of electricity, which is
distributed through a small power grid to Uligam's 200 households
and public buildings. Maldives State Trading Organization, the
investor in the new system, hosted island residents, three ministers
(Housing and Urban Development; Planning and National Development;
and Environment, Energy, and Water) and other officials for the
event, at which the president officially pressed the switch turning
on the new system.

UNIQUE SYSTEM IDEALLY SUITED TO MALDIVES ISLANDS
--------------------------------------------- ---

3. (U) Maldives' 195 residential islands currently all depend on
diesel-powered generators to produce electricity for residential and
public use. Most islands are home to a few hundred households and a
handful of public buildings such as schools, health centers,
mosques, and local government offices. Because the islands are
widely dispersed, a national electricity grid is impossible. The
typical island requires only about 50 kilowatts of electricity to
meet its needs. Diesel generators are inefficient for this purpose,
as they often run over or under capacity. They are also loud and
dirty. With rising oil prices, diesel fuel costs are high.
Finally, because the fuel must be delivered by ship to individual
islands in drums, delays in deliveries can leave the islands without
power.

4. (U) Maldives' islands, with often sunny, breezy weather, are
well-suited to use wind and solar power, however. Additionally, the
low-lying island nation has been a vocal proponent of efforts to
prevent sea-level rise, which could eventually submerge the country.
The State Trading Organization, acting on President Gayoom's calls
for reduced carbon emissions worldwide, determined that renewable
energy made both commercial and environmental sense for Maldives.
It commissioned Daily Life Renewable Energy to design and install a
three-island pilot project to test the viability of renewable energy
systems.

5. (U) Daily Life is the Asia distributor of wind turbines
manufactured by U.S. company Southwest Windpower. Daily Life, which
had developed renewable energy systems for a number of small Pacific
islands states, approached STO subsidiary Maldive Gas in 2006 to be
a partner in developing a nationwide renewable energy project. The
partnership has been boosted by Southwest Windpower's participation
in the American Pavilion at the annual Maldives Hotel and Trade
Exhibition (reftel).

6. (U) The Daily Life system combines 15-30 small wind turbines, an
array of solar panels, a diesel or liquid propane gas generator, and
storage batteries all controlled by a computer which regulates power
to the island grid. The batteries enable excess power to be stored
and used when wind or sun is low. The generator supplements the
renewable sources when needed. According to Daily Life, the

COLOMBO 00000056 002 OF 002


"AC-coupled Micro-Grid Hybrid Distributed Generation System" is the
first of its kind in use worldwide.

7. (U) Daily Life installed the systems on the Maldives islands of
Uligam, Raimandhoo, and Kondey during 2007. The three systems have
been functioning since September 2007, with a total installed
renewable energy capacity of 120kW -- meeting the entire residential
power requirements of all three islands. Additionally, the systems
provide about half the total energy requirements of non-residential
users such as hospitals, schools, government offices, and
telecommunications providers. The $2.85 million pilot project
includes U.S. components worth about $1.7 million. The pilot
project was financed by a loan from the New York branch of Societe
Generale bank to the Bank of Maldives, which lent the funds to the
State Trading Organization.

EXPANSION TO 90 ISLANDS COULD GENERATE
$60 MILLION IN US EXPORTS
--------------------------------------

8. (SBU) If the pilot project continues to operate successfully for
an additional three months, the State Trading Organization and the
Maldives Ministry of Environment, Energy, and Water intend to
install similar systems on an additional 90 residential islands
around Maldives. Societe Generale has offered financing for this
nearly $90 million expansion, which would be guaranteed by the U.S.
Export-Import Bank.

9. (U) Importantly, the systems are commercially viable. Initial
projections from the pilot systems indicate that revenue will cover
the cost of the systems in twelve years, making the systems
economically viable using fifteen-year financing. The proposed
financing for the main 90-island project would involve Societe
Generale lending to Maldives Ministry of Finance and Treasury on a
sovereign basis. The Ministry would then finance, possibly through
the Bank of Maldives, the State Trading Organization as the
implementing agency.

COMMENT: U.S. TECHNOLOGY DELIVERS THE
FUTURE OF CLEAN ENERGY
-------------------------------------

10. (SBU) President Gayoom speaks frequently about the risks
Maldives faces from sea-level rise, saying for example, "My message
is a simple one -- take global warming and climate change more
seriously. Act now, before it becomes too late to save not only the
low-lying islands but the entire planet." This renewable energy
project in Maldives demonstrates the future of clean energy
investment in the developing world, with U.S. technology providing
the solutions. It also demonstrates the enormous export potential
of U.S. environmental and clean energy technology. The potential
$60 million worth of U.S. exports for the Maldives-wide project
would amount to about four times the current $17 million annual U.S.
exports to Maldives. The Ambassador, in his remarks at the Uligam
launch event stated, "I am proud that American technology is helping
the Maldives become a leading example of a country shifting to clean
energy sources to reduce greenhouse gas emissions."
BLAKE

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