The African Development Bank (AfDB) has approved €19.6 million in financing to support the Cabeólica Phase II Expansion Project in Cabo Verde.
The project advances Cabo Verde’s goal of generating 50% of its electricity from renewables by 2030 as well as its Nationally Determined Contribution under the Paris Agreement.
The project is the West African country’s first renewable energy initiative to integrate wind power generation and battery energy storage systems (BESS).
In a statement, the AfDB said the financing includes a loan of approximately €12.6 million from the Bank, and €7 million in concessional loan financing from the Sustainable Energy Fund for Africa (SEFA).
“This project is a testament to Cabo Verde’s long-term vision to decarbonize its power sector and enhance its resilience.
“It also demonstrates how private sector investment, facilitated by catalytic concessional financing, can deliver cost-effective, sustainable energy solutions for small island economies,” said Wale Shonibare, the AfDB’s Director for Energy Financial Solutions, Policy and Regulations.
Ayotunde Anjorin, Chairman of Cabeólica and Senior Director and CFO at Africa Finance Corporation, said: “As the first renewable energy commercial scale PPP in sub-Saharan Africa, Cabeólica is again proud to lead this transformative expansion project comprising additional wind capacity and battery energy storage.
“This project underscores Cabeólica’s deep commitment to delivering reliable, clean energy infrastructure in line with national goals and priorities and continues to set a replicable model for the region.”
The AfDB said the project aligns with its Light Up and Power Africa High-5 priority.
What to know about the Cabeólica Phase II Expansion Project
Cabeólica Phase II will feature five installations of wind turbines across four islands: a wind expansion on Santiago and BESS deployments on Santiago, Sal, Boa Vista, and São Vicente.
The battery storage will support ancillary grid services such as frequency response and voltage regulation, enabling more efficient use of intermittent wind power and reducing curtailment.
With Cabo Verde’s electricity system still heavily reliant on imported fossil fuels, these upgrades are expected to reduce system costs and enhance energy security.
Cabeólica S.A., which runs the wind project, is owned by the Africa Finance Corporation, A.P.
Moller Capital, and Cabo Verdean public entities, is the country’s first independent power producer (IPP).
Phase II of the project will be sustained by a 20-year power purchase and storage services agreement with Cabo Verde’s national utility, Electra S.A., at tariffs significantly lower than the national average generation cost.
The Phase II expansion will build on the success of the original Cabeólica power project commissioned in 2012, and will add 13.5MW of wind generation capacity and 26 megawatt-hours (MWh) of grid-connected battery energy storage.
The expansion is expected to generate over 60 gigawatt-hours of clean energy annually, eliminating expensive thermal generation and reducing carbon dioxide emissions by an estimated 50,000 tonnes annually.
