CABO VERDE WIND POWER EXPANSION

This operation follows up project 2008-0226 CAPE VERDE WIND POWER PPP. This new project will finance the expansion of promoter's existing windfarm in Santiago island and the installation of at least two Battery Energy Storage Systems (BESS) in Cabo Verde. In detail: i) a 13.5 MW expansion of the Santiago windfarm ii) battery systems (BESS) of approximately 10 MW at Santiago windfarm and of approximately 5MW in the Sal Island.

As a result of this new project, the renewable energy penetration rate in the two islands will expand, improving the decarbonisation and diversification of the country's energy matrix as well as ensuring a more stable grid system reducing the frequency of blackouts. This will also enable the Government to reach its targets for the sector by 2025. The project is also in line with its NDC and the Electricity Sector Master Plan 2018-2040 which plan to increase the wind power capacity 60 MW by 2030 and contribute to Cape Verde's goal to reduce economy-wide greenhouse gas emissions by 18% by 2030.

The project develops new storage and wind capacity. It addresses the market failure of negative externalities by reducing carbon and air pollution. The project is fully in line with EU and National strategic priorities, including the Global Gateway Investment Agenda, the Team Europe Initiative "Sustainable and Inclusive Cabo Verde" and the Multi-Annual Indicated Programme ("MIP 2021-2027") as well as the National Electricity Masterplan (2018-2040), and it contributes to Cabo Verde's "NDCs" under the Paris Agreement. The project will reduce the cost of power supply in Cabo Verde, including reducing the usage of imported fossil fuels.

The project quality and results are expected to be very good, including because of the experience of the Promoter in renewable energy and the economic benefits brought by the investments. 

The Bank's proposal adds significant value to the project as a result of the sculpted repayment profile. The project will be financed together with another International Finance Institution.

Finally, the operation will contribute to the achievement of the Sustainable Development Goals SDG7 - Affordable and Clean Energy, and SDG13 - Climate Action.

If the project were located within the EU, the construction of the windfarm extension and the BESS components would usually fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2014/52/EU, amending the EIA Directive 2011/92/EU. The EIB will review the project's potential impacts and avoided CO2 amount at appraisal stage. Construction of 2.6km of transmission line and other grid devices dedicated to the Project are associated facilities and will be included in the review. The project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate change mitigation.

The promoter has to ensure that implementation of the project will be done in accordance with the EIB's Guide to Procurement (public procurement section).

Under EFSD+ Guarantee