Inside Africa: How A Small Country In The Atlantic Is Cutting Energy Costs By Going Green

Sodade (also Saudade) is a word which evokes feelings of melancholy, nostalgia, and a longing for something once known but since obscured by time. Though this unique temperament is known across Portuguese speaking territories, it rings particularly true to one of its smallest and most removed. Popularised by Cesaria Evora and her songs in the UNESCO protected Morna genre, the sentiment is well known among a majority of homesick Cape Verdeans, who live abroad rather than on the mountainous 10 islands & 5 islets off the West African coast.

Residents of the islands, though they are home in Cape Verde, are also privy to the feeling of difficulty and longing for something better. Highly dependent on remittances from abroad, aka Cape Verde’s 11th island, and tourism, the country has seen one of its worst ever economic recessions in the wake of the Covid-19 pandemic. Though it has a good reputation for its stable and multiparty democratic political governance, Cape Verde is known to have high living costs due to its limited resources, small land surface (much of which is infertile), and in large part also its energy costs.

Electricity prices on the island are almost two and a half times higher than the world average, and more than three times Africa’s average. For the most part, this is because 84% of islands’ energy is generated using expensive fossil fuels. But Cape Verde is trying to change that. In the previous decade, the country has unveiled an ambitious National Electricity Masterplan. Its objective is to achieve UN sustainable development goals, reduce emissions and generate half of the entire islands’ energy through renewables by 2030.

Cape Verde is not a rich or particularly innovative country, but it does have quite a large potential both for solar power and wind energy. Currently, it receives 14% of its energy from wind and 2.3% from the sun. But according to Gesto Energy, an energy consulting firm, Cape Verde’s natural conditions are among the “best in the world for the production of wind energy”, thanks to steadfast trade winds that blow down the eastern Atlantic. They estimate that the country has as much as 2600 megawatts of renewable energy potential.

It's particularly relevant to Cape Verde, a mountainous volcanic archipelago which suffers from arid land and drought. In many rural and mountainous areas, on-grid electricity or running water is luxury residents aren’t afforded. Some still use donkeys as a mode to transport water and food.

But solar and wind energy can be generated on a small scale and installed in many rural places. For those buying, it’s relatively cheap. Renewable energy also makes access to water less of a headache in Cape Verde, which currently gets 90% from sea water desalination, a highly energy intensive process which consumes roughly 10% of the country’s energy production.

Faced with such a challenge, Cape Verde’s islands seem rather isolated dotted 500km off the west African coast in the Atlantic Ocean. But they are far from alone - the project dates back to a bilateral Special Partnership formed in 2007 with the EU, which was designed to form an alignment on Cape Verde’s development towards a sustainable economy (it is the only deal of its kind between the EU and an African country).

Since, the European Investment Bank (EIB) has offered to finance the construction of an electricity grid and storage components between 2023 and 2029, which would see the integration of wind and solar power plants, an improved quality and reliability of the electricity, and a reduction of the high costs. The goal is to assist Cape Verde in reducing its reliance on fossil fuels by 2040 under the EU’s Global Gateway Strategy.

Launched in 2021, Global Gateway was designed to “reduce the worldwide investment gap” by aiming to mobilise €300 billion in public and private investments between 2021 and 2027. It brings government officials from the EU and nations around the developing world, and private sector stakeholders, institutions, and organizations under the same roof to facilitate investment and promote progress towards Sustainable Development Goals and sustainable growth.

At the Global Gateway Forum in October 2023, Ursula von der Leyen struck a deal with Ulisses Correia e Silva, the president of Cape Verde, which would see a €246 million investment package flow from the EU to the islands. Among the investments, there is the development of a pumped-storage hydroelectric facility and a corporate loan of €22 million to Cabeólica, a green energy company that runs wind farm projects. This latter investment alone is believed to add 13 megawatts of renewable and clean energy to Cape Verde’s national electricity grid.

There are other investments from the EIB too, such as a €120 million loan to Cape Verde’s seaport, or a €22 million corporate loan to the mobile network Cabo Verde Telecom, which will finance the connection of high-speed internet cables from Portugal to Cape Verde through the recently built Equiano cable that runs across the entire West African coast.

The EU hopes a collaboration with Cape Verde opens more opportunities for sustainable development under the Global Gateway program. The project is seen as a pilot for other West African countries “facing similar ‘fragmented markets’ challenges” as a proof of concept. Tomorrow, in another country of Africa, a similar green transition could be built off the lessons learnt on the islands of Cape Verde.

Even if that isn’t the case, as a region that is expected to be hardly impacted by climate change, especially through notorious droughts, the small country is at least also contributing its part in a worldwide fight against global warming.

It would also improve living costs in Praia and other cities of Cape Verde, which have seen a surge in electricity demand over the past decade, after the islands saw a rapid growth in the tourism sector, which makes up 25% of the country’s economy. Visitors, drawn from abroad by the charming music characteristic of the islands, also want to let their hair down in, as Cesaria Evora describes her small country in the song ‘Petit Pays’, a ‘Poor land, full of love; Nice land, full of love’.