Pension Office Explores Climate Investments as Finance Minister Calls for Private Capital
- The Maldives Pension Office is exploring climate-related investments to diversify its MVR 30 billion-plus pension fund, while stressing financial discipline must not be compromised.
- Finance Minister Hassan Zareer urged banks and institutional investors to provide private capital for renewable energy, conservation and water security to reach developed-nation status by 2040.
- MFLC's October accreditation gives the Maldives its first national entity with direct access to the Green Climate Fund, enabling direct funding proposals.
The Maldives Pension Office is exploring climate-related investments as it looks to diversify a pension fund with more than MVR 30 billion in net assets. The prospect of using long-term domestic capital to finance climate projects was a focus of the Maldives Finance Forum on Saturday, where Finance Minister Hassan Zareer called on banks and institutional investors to play a greater role.
Speaking at the forum, Minister Zareer said investment in renewable energy, environmental conservation and water security would be needed to meet the Maldives’ ambition of becoming a developed nation by 2040. He said government spending, international aid and concessional loans would remain important, and called for private financing that could help deliver projects without adding to the debt burden on future generations.
The government’s target of meeting 33 per cent of electricity demand from renewable sources by 2028 illustrates the scale of investment needed. Reaching it will require spending on power generation and storage across geographically dispersed islands. Expanding renewable generation would also reduce the country’s exposure to imported fuel prices.
For the Pension Office, climate risk also affects the income on which retirement savings depend. Chief Executive Officer Yazmeed Mohamed said disruptions to tourism, fisheries and small businesses could lead to lost wages and interruptions in pension contributions. Any climate investment the office considers would still need to demonstrate sound governance, manageable risks and financial viability.
“Green investment must never mean compromising financial discipline,” Yazmeed said.
Minister Zareer urged banks to develop financing products for sustainable projects and businesses to put forward proposals lenders could assess and finance. He also pointed to the October accreditation of Maldives Finance and Leasing Company Pvt Ltd (MFLC) as the country’s first national entity with direct access to the Green Climate Fund. The accreditation gives MFLC a route to submit funding proposals directly to the fund, with individual projects subject to approval.
The Maldives Pension Office organised the 13th edition of the forum with UNDP Maldives at dusitD2 Feydhoo Maldives. The programme included a regulators’ roundtable on putting sustainable finance frameworks into practice and a panel on how climate risks affect households, businesses and the wider economy.
