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80% of electricity generated is from expensive imported fossil fuels Expanding renewable energy capacity and improving grid efficiency to reduce dependency on imported fossil fuels and lower energy costs are among several key “immediate priorities” that Cabo Verde need to address. A new World Bank report on the island nation 500km off the west coast of Africa, says building resilience and accelerating a low-carbon transition are central to Cabo Verde’s sustainable development strategy. The Country Climate and Development Report (CCDR) says the country’s green transition in the transport and power sectors would greatly reduce fuel import needs. “As a small island developing state (SIDS), Cabo Verde is highly vulnerable to extreme climate events… it is an archipelago of ten islands with a population of 556,000, half of them on Santiago Island. Because of its location, Cabo Verde is highly vulnerable to natural hazards, including extreme heat, floods, droughts, tropical storms, landslides, volcanic eruptions, coastal erosion and sea level rise,” says the report. Although Cabo Verde is a marginal greenhouse gas (GHG) emitter, a low-carbon transition would generate significant economic gains for the country. “Even though Cabo Verde accounts for less than 0.002% of total global emissions, the country’s Nationally Determined Contribution (NDC) still aims to decarbonise the energy sector, which accounts for 73% of national emissions, and achieve a 100% share of RE [renewable energy] penetration by 2040. “Decarbonisation would increase the country’s climate resilience and lower its energy costs, which are among the highest in the region, hindering growth.” Solar and wind energy potential of Cabo Verde The report notes that while Cabo Verdeans’ access rate to electricity is an impressive 96%, 80% of that electricity is generated from expensive imported fossil fuels. “The country, nonetheless, has significant renewable energy potential – more than three gigawatts (GW) in solar capacity, and more than 500 megawatts (MW) in wind. “Significant investments and policy reforms are needed to promote a competitive market, leverage private sector investments, and reach national energy targets.” The country’s National Programme for Sustainable Energy (PNSE) focuses on institutional strengthening, energy market reform, strategic infrastructure development, the promotion of renewable energy, and the enhancement of energy efficiency, while the Electricity Sector Master Plan (2018–2040) sets ambitious renewable energy and storage targets. Investment needed to boost the grid, RE deployment in Cabo Verde The report suggests that to achieve these goals, Cabo Verde should boost public investments for grid upgrades and deploy storage solutions while attracting private capital – which could cover over half of its financing needs – through financial reforms and risk mitigation facilities. “Improved sector governance, transparency, and operational efficiency will also be essential. In the long term, interconnecting the islands would facilitate large-scale variable renewable energy (VRE) deployment and the efficient use of storage and RE. “This would allow for the gradual decommissioning of thermal plants and reduce the country’s dependence on imported fossil fuels, while also meeting the projected increased demand from wide-scale electric vehicle (EV) deployment.” Climate action’s double-edged sword The report says climate action would improve Cabo Verde’s resilience against external shocks, notably through large fuel savings, but would increase fiscal pressures. “The green transition in the transport and power sectors would greatly reduce fuel import needs, generating savings that could total $1.8 billion (discounted) between now and 2050. “Climate action would initially increase import needs, but reduce external financing needs in the long term by reducing tourism losses and dependence on fuel and food imports. “On the other hand, climate action would exert pressure on public finance, potentially increasing the public debt by 50 pp [percentage points] by 2050. Given the country’s already high public debt, this calls for mobilising additional revenues and maximising private sector investment.” Toward a low-carbon transition The CCDR estimates that ambitious climate action would require investments of approximately $140 million annually from 2024 to 2030 and beyond. Building resilience and accelerating a low-carbon transition are central to Cabo Verde’s sustainable development strategy, it says. “Climate change threatens to exacerbate these issues, with projections showing potential GDP losses of up to 3.6% by 2050 without effective adaptation measures.” The CCDR provides a roadmap to align Cabo Verde’s development aspirations with climate action by investing in measures that mitigate climate risks while also unlocking new opportunities for sustainable and inclusive growth. The report emphasises the need for an integrated approach to address Cabo Verde’s vulnerabilities. Immediate priorities include: Promoting integrated land and water management: Increasing food security through efficient irrigation, drought-resistant crops and landscape restoration. Fostering a climate-resilient blue economy: Diversifying the tourism sector, improving sustainable fisheries management and protecting coastal ecosystems. Upgrading infrastructure systems: Integrating climate risks into urban and transport planning to safeguard critical infrastructure and improve inter-island connectivity. Accelerating the low-carbon energy transition: Expanding renewable energy capacity and improving grid efficiency to reduce dependency on imported fossil fuels and lower energy costs. Enhancing social resilience: Strengthening social protection systems and investing in education and skills development to support vulnerable groups and leverage new job opportunities in green sectors. “Climate action is not just a necessity; it’s an opportunity for Cabo Verde to chart a more sustainable and prosperous future. With strong governance, innovative financing, and community engagement, Cabo Verde can lead the way in resilience and low-carbon development,” said Indira Campos, World Bank Group Resident Representative for Cabo Verde. |
