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Cape Verde, Cabeólica Wind Power

The Cabeólica wind power project in Cape Verde meets up to 25% of Cape Verde’s energy demands.

Click here to read more about TAF’s achievements in 2015.

Context

Home to 470,000 people,1 Cape Verde is an archipelago of ten islands located approximately 500km off the northwest coast of Africa. In the mid-2000s, Cape Verde was heavily dependent on expensive fossil fuel imports for electricity generation; with fuel accounting for up to 11% of the country’s total imports.2 Fuel security was a major concern, with residents impacted by regular power outages. In response, the Government of Cape Verde (GoCV) identified the potential of the country’s high average wind speeds (up to 10 metres per second) for the development of wind power as a sustainable, affordable alternative to imported fossil fuels.

Project

In spite of Cape Verde’s huge wind power potential, the GoCV struggled to attract private sector investment to progress the remote, complex project. In 2006, InfraCo Africa, through its lead developer eleQtra, was approached to develop the Cabeólica Wind Power project, a wind farm development on four of Cape Verde’s islands designed to generate around 25MW of renewable energy. Cabeólica was Cape Verde’s first Public Private Partnership (PPP) energy project. TAF provided a US$395,000 grant supporting the initial design and development of the project; funding capacity-building with government officials and related stakeholders and a market assessment of Cape Verde’s electricity demand. The grant also paid for a technical feasibility study looking at the logistics of a multi-location wind farm project and a study exploring the financial implications for the GoCV and national utility, Electra, of the proposed power purchase agreement (PPA).

In 2010, InfraCo Africa requested a further US$74,000 of TAF support to co-finance activity to reassure the GoCV regarding key contract documents. This second grant enabled the government to access appropriate financial and legal advice on the PPA proposed by Cabeólica and advice around broader PPP approaches for the provision of power services. This work enabled the successful completion of the project’s development and its timely financial close.

Impact

Now fully built and commissioned, Cabeólica is the first successfully closed commercial-scale PPP wind-farm development in Sub-Saharan Africa. Cabeólica provides approximately 25% of the country’s energy and has reduced power generation costs by about 20%. Cape Verde’s CO2 emissions have fallen by almost 55,000 tonnes per annum and the project has been recognised by the UNFCCC as a Clean Development Mechanism project. Cabeólica directly employs 10 full-time local staff members to manage and operate the four wind farms and sell the electricity to the local utility as per the PPA signed with Electra and the GoCV. The project has given the GoCV the knowledge and experience to pursue future PPPs in the renewable energy sector, and Cape Verde now leads the world in the government’s ambition to achieve 100% renewable energy supply by 2020.