AfDB and EIB Finalise Financing Agreement For Cape Verde Wind Farm
The African Development Bank (AfDB) and the European Investment Bank (EIB), on Tuesday, 14 December 2010, closed the financing agreement to provide € 45 million to design, construct and operate onshore wind farms on four islands in the Cape Verde archipelago. This will be one of the largest wind projects in Africa and first renewable energy public private partnership in sub-Saharan Africa. The project will provide over 28MW of electricity generating capacity and help the island reach an ambitious target of ensuring that 25% of local power needs are provided by renewable energy by 2012 and 50% by 2020. The project is being developed by InfraCo in a public-private partnership between the government of Cape Verde and local power utility Electra.
The project will introduce modern wind power technology provided by Vestas to enable wind power to be established as the primary alternative to electricity produced by fuel oil or diesel. Alongside significantly reducing greenhouse gas emissions the programme will increase access to electricity in Cape Verde, reduce the need to import fuel priced in foreign currency and help establish wind energy as a reliable source of non-polluting renewable power on the islands. The EIB will provide € 30 million and the AfDB € 15 million for the € 65 million project which forms part of European Union’s 2008–2013 Cape Verde country strategy.
“With the world’s attention turning towards the global challenge of climate change the Cape Verde wind farm project timely demonstrates the development benefits of enabling small island states to use renewable energy as part of the global fight against climate change. The four separate wind farms will replace traditional diesel generation and the need to import fuel oil. Close cooperation between the European Investment Bank and African Development Bank shows how long-term public finance can develop renewable energy projects during difficult economic times” said Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa.
“Climate change hinders sustainable development and achievement of the Millennium Development Goals in Africa. However, climate change can create new jobs and opportunities for Africa to pursue low carbon intensive development as sustainable growth is only possible with access to diverse, reliable, affordable clean and renewable energy.” the AfDB President, Donald Kaberuka, added.
“The project propels Cape Verde into a position of leadership in renewable power generation in Africa where the country’s Public Private Partnership structure will be extensively studied and replicated throughout the region.” noted Fabio D. Borba, President of Cabeolica.
Wind energy was first introduced to Cape Verde in 1994, but until now only provides 2% of power needs in the small island state located 500km off the West African coast. The project will include comprehensive environmental studies, wind resource assessment and interconnections to the high-voltage network. All wind farms are expected to be operational by the end of 2011 and provide significant employment.
The loan agreement was signed in Washington D.C. last month by Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa, Cape Verde Finance Minister Cristina Duarte and representatives of the African Development Bank. The EIB highlighted European development support for climate action in small island states at the UNFCCC Cancun conference.
Notes for Editors
- The European Investment Bank, the long-term lending institution of the European Union, whose shareholders are the 27 European Union member states, has been active across Africa for over 40 years. EIB activities follow policies and objectives set down by European Union member states and whose Finance Ministers are the EIB’s Governors.
- Over the last 5 years over € 8.6 billion has been provided by the European Investment Bank for projects across Africa. The European Investment Bank operates in sub-Saharan Africa under the Cotonou Agreement. Last year the European Investment Bank’s dedicated climate action enabled € 17b billion of loans to be provided for projects that contribute to the reduction of CO2 emissions.
- A special purpose company, Cabeolica S.A., owned by the GoCV, Electra, InfraCo, Africa Finance Corporation (AFC) and Finnfund will develop, build, finance and operate the Cape Verde Wind Farm project for the project promoters.
- Project developer InfraCo is funded by the Private Infrastructure Development Group with support from international development donors including DFID, IrishAid and the World Bank, and development agencies in the Netherlands, Austria, Sweden and Switzerland.