World Bank approves Renewable Energy Project loans to Cabo Verde, Africa

The World Bank on Wednesday approved an International Development Association credit in the amount of US$3.5 million and an International Bank for Reconstruction and Development loan in the amount of US$ 3.5 million for the Renewable Energy and Improved Utility Performance Project (REIUP) for Cabo Verde in Western Africa.

The project will be co-financed by the Canada Clean Energy and Forest Climate Facility (CCEFCF), providing US$ 7.5 million (of which US$ 0.5 as a grant and US$ 7 million as a loan) and the Global Infrastructure Facility, providing US$ 2 million grant.

Despite remarkable progress in expanding energy access and reducing energy intensity in the past 10 years, the power sector in Cabo Verde faces challenges that could undermine its ability to serve as an engine of economic recovery post-COVID-19 pandemic. In this context, the project is intended to help increase Cabo Verde’s renewable energy generation capacity and reduce power system losses, ultimately providing more sustainable and affordable electricity services to the population and contributing to reducing CO2 emissions.

REIUP also includes investments to ensure a more efficient use of energy and continued power supply to public health buildings, as well as investments to support interventions to reduce the gender gap in employment and skills development in the energy sector. Finally, the project will support the Government of Cabo Verde’s goal to mobilize private and public capital for energy sector investments, by increasing stakeholders’ capacity and supporting the restructuring and privatization of the electricity utility ELECTRA.

In terms of expected results, REUIP will: (a) increase renewable energy generation capacity by 3.9 MW with the construction of small-scale solar photovoltaic (PV) plants as well as distributed solar PV; (b) reduce power system losses from 26% to 18% with the privatization of the electricity utility ELECTRA; and (c) reduce Greenhouse Gas (GHG) emissions by an estimate of 9,000 tCO2 equivalent per year.

The project will generate large benefits to the people and the economy of Cabo Verde, in particular: (a) the electricity customers throughout the country will benefit from clean, reliable, and affordable electricity services; (b) the health centers will operate more efficiently due to the power supply from rooftop solar PV systems and the energy efficiency facilities; (c) the divestment in the national electricity utility will reduce public debt exposure, contingent liabilities, and fiscal risks facing the Government of Cabo Verde; and (d) the deployment of solar PV technologies will create new jobs in the renewable energy market, including for women, whose access to employment opportunities will be supported through a targeted skill development program.

“The World Bank is pleased to support this project as it will reduce Cabo Verde’s vulnerability to the volatility of imported fossil fuel prices and pave the way for a reduction in electricity prices, making the country more competitive and increasing households’ disposable income in the current context of post-COVID-19 economic recovery” said Eneida Fernandes, Resident Representative for Cabo Verde.

“The project will build on recent efforts from the World Bank to support the Government of Cabo Verde in the privatization of the electricity utility ELECTRA. A first step has been taken with the enactment of the power sector reform decree law, supported by the Cabo Verde First Equitable and Sustainable Recovery Development Policy Financing. The project will also complement the efforts of other donors active in the Cabo Verdean power sector towards the effective implementation of the country’s Master Plan for the Power Sector 2018-2030”, said, Kwawu Mensan Gaba, World Bank Energy Global Practice Manager for Western and Central Africa.

Source : MercoPress

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