Cabo Verde Scales Up Wind Power and Battery Storage with €19.6M Boost from AfDB

The African Development Bank Group (AfDB) has approved a €19.6 million financing package to support the Cabeólica Phase II Expansion Project in Cabo Verde, marking a significant milestone in the country's energy transition. This expansion heralds the nation’s first full-scale integration of wind power generation and battery energy storage systems (BESS)—a major technological leap for the archipelago’s energy resilience.

The package includes:

• €12.6 million loan from the African Development Bank

• €7 million concessional loan from the Sustainable Energy Fund for Africa (SEFA), a fund managed by AfDB

Ambitious Expansion with a Vision for Decarbonization

Cabeólica Phase II builds on the initial success of the Cabeólica power project commissioned in 2012, which positioned Cabo Verde as a renewable energy pioneer in sub-Saharan Africa. The new phase will introduce:

• 13.5 MW of additional wind generation capacity

• 26 MWh of battery storage capacity

These installations are expected to generate over 60 GWh of clean electricity annually, cutting down approximately 50,000 tonnes of CO₂ emissions and displacing expensive, imported fossil-fuel-based thermal generation.

Wale Shonibare, Director for Energy Financial Solutions at AfDB, emphasized, “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.”

Five Installations, Four Islands, One Bold Strategy

Cabeólica Phase II will roll out across:

• A wind energy expansion on Santiago

• BESS installations on Santiago, Sal, Boa Vista, and São Vicente

These battery systems will perform crucial ancillary services, including:

• Frequency regulation

• Voltage stabilization

• Integration of intermittent wind energy into the grid

• Reduction of energy curtailment and system inefficiencies

Daniel Schroth, AfDB’s Director for Renewable Energy and Efficiency, noted that SEFA’s support ensures increased power reliability and lower costs, ultimately enhancing grid performance and energy security.

Public-Private Partnership as a Replicable Model

Cabeólica S.A.—a pioneering independent power producer (IPP) in Cabo Verde—is owned by Africa Finance Corporation, A.P. Moller Capital, and public entities of Cabo Verde. According to Ayotunde Anjorin, Chairman of Cabeólica and CFO at Africa Finance Corporation, “As the first renewable energy commercial-scale PPP in sub-Saharan Africa, Cabeólica is again proud to lead this transformative project… This expansion continues to set a replicable model for the region.”

A new 20-year Power Purchase and Storage Services Agreement has been established with the national utility Electra S.A., featuring tariffs significantly lower than the current national average—an economically prudent move aligned with national priorities.

Toward a Greener and Secure Energy Future

Cabo Verde currently depends heavily on imported fossil fuels for power generation. However, through this strategic investment and deployment of advanced technologies, the nation is moving steadily toward its bold target of 50% electricity generation from renewables by 2030. Additionally, this supports the country’s Nationally Determined Contribution (NDC) under the Paris Agreement.

The Cabeólica Phase II project is also closely aligned with:

• AfDB’s "Light Up and Power Africa" High-5 agenda

• AfDB’s Ten-Year Strategy

• SEFA’s Green Baseload pillar

This initiative not only strengthens the sustainability of Cabo Verde’s power sector but also provides a blueprint for similar economies navigating the complexities of transitioning to low-carbon energy systems.