Description/achievement of initiative
From a perspective of sustainable growth and development, Cape Verde intends to diversify its revenue sources as it has been recommended by the IMF.
Source: Government of Cape Verde
With tourism, fishing activities and remittances from of the Diaspora, the program "100% renewable energy" could be an important source of income because of its structural effects on the rest of the economy.
Indeed this program will among other things allow business development and employment among others with the promotion of SMEs, lower energy costs, improvement of the environment through better management of natural resource and opportunities in developing carbon trading
The electricity needs of Cape Verde are currently covered to 25% by renewable energies, with peaks of 35%. Current studies show that if the needs were covered to 50%, the upward trend in oil prices would still result in a fuel oil bill of 13,800 billion over 20 years. The same studies show that investments between 1,000 and 1,800 million could increase the covering of these needs to 100% by 2020, the costs of raw material of renewable energies being zero. The accurate amount of these investments is not yet determined.
Given the savings that might result from these investments, Cape Verde wishes to achieve them through a public private partnership. It will select for this purpose a private management company by call for tender to implement the program according to commercial standards.
It hopes that such investments do not result in a significant increase in its debt likely to create a macroeconomic unbalance. Cape Verde's external debt remains under control. The country has always paid its debt service and is, therefore, not beneficiary of the HIPC initiative. The development of activities induced by the program 100% renewables will increase the tax basis and generate new revenues for the government budget.
Cape Verde hopes also that these investments will help promote Cape Verdean companies responding to international competitive standards. To this end, a number of financial instruments and a capacity building program will be implemented. To ensure the optimality of the investment program, Cape Verde benefits an international technical assistance in order to have a sound grid and a competitive price for its electricity.