Portugal supports Cape Verde’s green and energy transition

Portugal and Cape Verde signed a bilateral agreement to set up an Environmental Climate Fund that will entail around 12 million euros from the Portuguese side. The agreement was signed by the Ministers of Finance, Fernando Medina and Olavo Correia, in the presence of Prime Ministers António Costa and Ulisses Correia e Silva at the end of a working meeting between both Governments in Lisbon.

"We signed a particularly innovative agreement on a global scale. An agreement that allows us to convert debt into investment to accelerate the climate transition and foster the green and blue economies", claimed Prime Minister António Costa in a joint statement with his Cape Verdean counterpart Ulisses Correia e Silva.

António Costa said that "the debt to be paid by Cape Verde by 2025 - 12 million euros – is integrated into an environmental and climate fund so the Cape Verdean state can support financing and invest in the country’s climate transition. In 2025 we will assess the operation’s success. We are certain the assessment will be positive, and we can expand this mechanism to the remainder of the debt in its full maturity and scope, which is around 140 million euros".

The 12 million relate to the sum to be paid by the Cape Verdean state, as capital, under the Contract to Consolidate Cape Verdean debt to Portugal entered into on 1 February 2022.

A step ahead

The Portuguese Prime Minister recalled that there are several world conferences on climate where financing investment in developing countries is addressed to accelerate their transition to a greener economy in a framework of "a global alliance to face climate change".

"We’ve heard a lot of speeches, we’ve signed many statements, but I believe that this is either the first or surely one of the first concrete financial agreements where two States agree that the existing debt will be converted to a fund to finance the necessary investment to accelerate the green transition", he underlined.

The agreement signed "is the concrete representation of something we are all aware of: only together will be able to face the global challenge of climate change" and this is "a concrete manner to support this financing mechanism". 

Noting that there will be an international conference on funding the green and blue transition on a global scale in Paris this week, António Costa said that "before the conference begins, Portugal and Cape Verde have taken a concrete step" that had been announced "a few months back in Mindelo".

520 million

The Prime Minister of Cape Verde Ulisses Correia e Silva claimed that the overall investment in his country’s energy transition is around 520 million euros, 65% of which will be private financing/investment under a public/private partnership scheme.

"We are opening up investment opportunities in the private sector in renewable power (wind, solar), the exploring of green hydrogen possibilities and in electric mobility", he said, asking Portuguese investors and entrepreneurs to "make the most of the opportunity".

Cape Verde undertook the 2022-2026 Strategic Sustainable Development Plan (PEDS II) in environmental sustainability and climate action, which aims to foster the economy’s diversification with investment in accelerating the energy transition, developing sustainable tourism, the transition to a blue economy, developing the digital economy, and the renewables sector.

Both countries also signed a cooperation agreement on public finance.