Introduction

This Factsheet outlines the current progress in advancing Sustainable Public Procurement (SusPP) in the Maldives based on a desk review. It applies an analytical framework of six Pillars (or "building blocks") of SusPP systems.

The Framework is designed to make clear that countries do not need to follow a linear step-by-step path to build effective SusPP systems. Rather it is important to examine local contexts and prioritize the Pillars with the most potential in the country. No matter where a country starts, a balanced approach to implementation calls for progress on all Pillars to some degree.

This Factsheet is organized as follows:

• "Country overview" section with an maturity rating and graphic, key achievements and remaining gaps, and timeline of key events.
• "State of Play & Forward Looking Analysis" section that summarizes the research findings from the desk review for each Pillar theme.
• "Key Stakeholders Driving the Agenda" explores opportunities for ADB teams to open discussions with country counterparts and add value to the work of partners

The Factsheet is intended to be a living document that will be revised and improved as new information is uncovered and advances are made. It is designed to support the ADB training programs on SusPP.

Maldives, a small island nation made up of 1,190 coral islands scattered across 90,000 square kilometers, faces unique development challenges. Its economy depends mainly on two sectors - tourism and fisheries - which together contribute 31% of its GDP. The COVID-19 pandemic exposed the consequences of the country’s lack of economic diversification, with tourism activities coming to a complete halt for months in 2020. Its energy needs are mainly met through costly imported fuel, resulting in high energy tariffs for residents and businesses. The country is particularly vulnerable to natural disasters and sea level rise, with the majority of its residents and infrastructure within 100 m of the coastline.

The Procurement regulations were updated in 2017 to promote the inclusion of social and environmental criteria. However additional SPP guidelines and supportive tools have not yet been developed for procurers, thus adoption remains low. However, the Government has set clear and ambitious policy ambitions to become net zero by 2030 and ban all single-use plastics. The country’s latest Strategic Action Plan 2019-2023 sets out policy goals that SPP can contribute towards.

>> Snapshot of Sustainable Procurement Maturity Level

Key Achievements

• Procurement law explicitly allows inclusion of environmental and social criteria
  
• Clear national policy priorities to combat plastic waste and promote renewables
  
• Advances in green procurement practices in the private tourism sector at resorts
  
• Commitment to set preferences for domestic SME suppliers
  

Potential Pathways Forward

• Need training, guides and tools for procurers on green and social procurement processes
  
• Unclear level of market readiness to deliver on green products and services
  
• Lack of monitoring and reporting system to track GPP progress and impacts
  

>> Timeline of Implementation of SusPP Policies and Activities

2006

2016

2018

2019

2017

2009

National Strategy for Sustainable Development set vision for carbon neutrality

Maldives National University creates green building trainings

Public Finance Regulation adopted

Strategic Action Plan 2019-2023 adopted

SDG Communication & Action Strategy prioritizes awareness raising on green & circular procurement

Circular allows for preferences for SMEs

Public Finance Act 2006 adopted

1st fully solar powered resort achieved

Pillar 1: Government Vision & Awareness of SusPP

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an adminstrative to strategic function, making clear how SusPP can deliver on important national social and environmental goals.

The Government of Maldives has long-term sustainability, inclusive growth and independence from diesel-based power generation at the forefront of its national policies. The 2009 National Strategy for Sustainable Development set the nation on a pathway for sustainable development with a vision for carbon neutrality in its energy and transport systems. The creation of jobs for youth, women and SMEs has remained a high priority.

The tourism industry drives economic growth but creates high waste production and energy demand. Over 143 million Polyethylene Terephthalate (PET) bottles were produced locally for water and soft drinks in 2019. Most of this plastic ends up in the ocean and floats back to litter the beaches of Maldive’s tourism establishments. The Maldives Tourism Board encourages visitors to carry out their own nonbiodegradable waste. Waste generated in the country is most commonly openly burned, generating significant air pollution. Energy generation is primarily through generators - more than 700,000 metric tons of fuel imported in 2019, with diesel making up the majority of that amount at 80%. Imported fuel is costly resulting in some of the highest power tariffs in the region.

Governments that establish a clear policy vision on SusPP can accelerate the shift from procurement as an adminstrative to strateic function, making clear how SusPP can deliver on imporant national social and environmental goals.

The Government adopted a Strategic Action Plan 2019-2023. The Strategy adopts a “waste to wealth” approach, shifting from a linear “use and dispose” system of waste management to a circular economy. The Strategic Action Plan and other policies and studies outline country priorities that sustainable public procurements can contribute towards. Some examples:

• Achieve carbon neutrality by 2030;
  
• achieve 70% power from renewable sources by 2030;
  
• enforce a complete ban on single-use plastics by 2023.
  

Pillar 2: Legal & Regulatory Framework

Procurement law reform can be key to clear obstacles to implementation by establishing "value for money", not "lowest price", as a core procurement objective, and authorizing procurement approaches suited to SusPP.

Public sector procurement in the Maldives is governed by the Public Finance Act 2006 and Public Finance Regulation 2017/R-20. Detailed instructions are provided in the Procurement Procedures and Guidelines. The procurement law framework contains several entry points for SusPP:

• Public procurements are guided by the principle of value for money, a concept that includes not only price but also total life cycle costs, maintenance/servicing costs, delivery/construction period, transportation or storage costs, as well as broader elements whether environmental, social and/or economic (Article 6.2).
• Environmental performance criteria in purchasing decisions may relate to maximum energy efficiency, minimum use of toxic chemicals and other pollutants, maximum use of products based on recycled materials and/or minimum use of unnecessary packaging and other superfluous material (Article 7.5)
• Allows procurers to set preferences for SMEs on tenders below MVR 2.5 million (created through the issuance of a Circular in 2019).
  

Further regulatory reform in planned. The Strategic Action Plan 2019-2023 prioritizes several reforms to promote green and social procurement:

• Identify measures that can be incorporated to the public procurement framework to provide special considerations for SMEs (Action 3.4c)
  
• Establish a quota of 15% of all public procurement for SMEs by 2022 (Target 4.2)
  
• Implement provisions for green procurement in the Public Finance Act by 2022 (Target 5.2)
  
• Review and revise the Public Finance Act to incorporate use of life-cycle costing to promote procurement of energy efficient appliances in public buildings (Action 5.1e).
  
• Develop legal and regulatory framework to reduce import, use, and manufacture of single-use plastics (Article 1.1f)
  
• Develop and enforce water and sewerage regulations, policies, standards, specifications and guidelines required under Water and Sewerage Act (Action 1.1b)
  

Pillar 3: Institutions & Capacity

The Ministry of Finance is the lead agency responsible for the development of procurement policy and regulations and oversight of procurement processes. Procurement is decentralized in the Maldives, with each procuring entity responsible for establishing their own Tender Evaluation Committee to oversee day-to-day procurement processes and fulfil any reporting obligations. The Ministry of Environment and Energy advises the implementation of environmentally sustainable procurements. The Ministry of Economic Development leads SME promotion activities.

The Civil Service Training Institute was established in 2009 as the sole training provider for civil servants in the Maldives. The Institute offers trainings in Public Procurement but no courses specifically on environmental or social procurement.

In 2016, the Maldives National University signed a Memorandum of Understanding (MOU) with the Ministry of Environment and Energy to integrate and deliver Green Building Concepts particularly Energy Efficiency modules in training programs at the University.

The Government plans to host discussion forums and workshops on green and circular procurement for government officials and the private sector, as outlined in the country’s SDG Communication Strategy and Action Plan 2019-2023.

Pillar 4: Market Practices

Market dialogue throughout the procurement process helps procuring entities to choose realistic sustainability criteria and ensure suppliers succeed in delivering on sustainability commitments over the contract duration.

The Strategic Action Plan 2019-2023 sets a target to support at least 50 SMEs adopt green initiatives. No green industry groups or listings in the Maldives were found. However, case studies have revealed leading green firms in the country that have contributed to public projects. A local management and consulting companies in the Maldives, Epoch Associates, attained BREEAM interim certification for the proposed HDC Green building to be constructed in Hulhumale’, Republic of Maldives - the first building in Maldives to achieve one of the world-leading sustainability ratings.

Pillar 5: Procurement Operations

Various tools and procurement approaches can be employed to help procurers more easily identify environmentally friendly goods and services and attract a competitive market response.

Few supportive tools exist to support public procurers to adopt green and social procurement practices. The Strategic Action Plan 2019-2023 outlines plans to develop several tools including:

• Establish minimum energy performance standards and energy labelling scheme for energy-efficient for appliances (Action 5.1a)
  
• Formulate and implement guidelines for the reuse and recycling of construction and demolition waste (Action 2.1b)
  
• Develop a framework for extended producer responsibility or other product stewardship programmes (Action 1.1h)
  
• Formulate and implement guidelines for the appropriate disposal of electronic waste including waste generated from the energy sector (Action 2.1c)
  
• Develop and enforce national standards for sewage and wastewater disposal (Action 1.1e)
  
• Develop and introduce incentive mechanism to adopt climate resilient and environment friendly technologies to water and sewerage sector (Action 2.1g)
  
• Develop mechanisms to verify and provide an efficiency rating schemes for water saving devices and appliances (Action 2.2b)
  

The country has made progress in reducing the cost of renewable energy generation, making it cost comparable to the imported fuel currently in use. In November 2022, the Government launched a 5MW solar project financed through a Power Purchase Agreement (PPA). The PPA is a significant milestone in making renewables more affordable than fuels - with a kWh solar energy costing US$10.9 cents, compared to diesel at US$23 cents and expected to rise to US$ 33 cents.

The Gan International Airport announced plans to become the Maldives’ first fully solar-powered airport. The private sector, especially in the tourism sector, has championed green and socially responsible procurements. These private sector examples are valuable as they offer ideas for environmental and social criteria that public procurers can adopt and highlight suppliers ready to deliver.

• Soneva Resorts is an eco-pioneer with 10+ years experience with green programs. The resort has a robust composting program and operates an Eco Centre – an on-site waste-processing facility that recycles around 90% of the resorts’ plastic, aluminum and glass waste. The company hosted a Makers’ Place concept event where makers and artists repurpose “waste” into sellable arts and crafts, like wall tiles and glassware.
  

• Fairmont Maldives aims to be the “first zero-waste-generating resort” in the country. The facility is destined to become a regional recycling center for the surrounding communities, with a further mission of educating local school children on recycling and conservation.
  

• Kudadoo Maldives Private Island became the first resort in the country to be fully solar-powered in 2018. The resort installed nearly 1,000 solar panels on the rooftop of “The Retreat” (a hub for dining, wellness, and retail)
  

Several recent studies set out recommendations and potential actions the country can take to promote metal and waste recycling on the island.

Pillar 6: Monitoring & Impact Measurement

Monitoring systems are essential to gather the information needed to keep SusPP implementation on course and communicate on the benefits achieved for the country.

There is no comprehensive database with information on what has been procured, the value of procurement, and who has been awarded the contracts.

Projects Supported by ADB

To come

Other Initiatives supported by National/International Agencies

The UN Joint SDG Fund and UNDP have extended technical and financial support to Timor-Leste to develop its first “Blue Economy Financing Roadmap”. Blue growth is about the sustainable use of ocean resources for economic growth and improved livelihoods while preserving the health of ocean ecosystems.

The UNEP Strengthening Low Carbon Energy Island Strategies project financed by Government of Maldives and Global Environment Facility (GEF) aims to Strengthen the building sector to address energy efficiency issues and promote expansion of investment in energy efficiency technologies/design in the housing, public and tourism building sub-sectors.

Under the Accelerating Renewable Energy Integration and Sustainable Energy (ARISE) project, supported by the World Bank, Maldives is seeking contractors for installation of 40 MWh capacity Battery Energy Storage Systems (BESS), across 18 electricity grids representing 19 islands/cities.The Maldives Clean Environment Project (MCEP) and the Maldives Enhancing Employability and Resilience of Youth (MEERY) Project—have been helping the government develop a sustainable waste management system, build capacity, and teach youth to lay the groundwork for a cleaner and safer Maldives.

The EU Switch Prevention Of Marine Litter In The Lakshadweep Sea (PROMISE) project seeks to promote source-to-sea solutions to reduce marine littering in tourism clusters along the Lakshadweep shorelines

Resources

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