Cabo Verde EU Cooperation 

Powering the Archipelago: The Cabeólica Expansion and the Future of Island Energy

In December 2025, the Republic of Cabo Verde marked a pivotal milestone in its journey toward energy autonomy with the inauguration of the expansion of the Cabeólica wind farm. This flagship infrastructure project, realized through a "Team Europe" partnership led by the European Investment Bank (EIB), represents a technological and financial blueprint for integrating variable renewable energy into fragmented island grids.

A Leap in Capacity and Stability

The expansion, often referred to as Cabeólica Phase II, significantly upgrades the country's renewable energy infrastructure. The project delivers an additional 13.5 MW of wind capacity installed on Santiago Island, alongside 26 MWh of Battery Energy Storage Systems (BESS) deployed across four strategic islands: Santiago, Sal, São Vicente, and Boa Vista.

This integration of wind turbines with advanced storage technology addresses the critical challenge of intermittency in small island power systems. By storing excess wind energy during peak production and releasing it during lulls, the BESS facilities stabilize the grid, provide frequency regulation, and reduce the need to curtail renewable generation. The infrastructure leverages turbines from Vestas and battery systems installed with the expertise of WinPower, showcasing high-level European technical cooperation.

"Team Europe" and Innovative Financing

The financial architecture of the expansion highlights the efficacy of the Global Gateway strategy in mobilizing capital for climate action. The expansion was financed primarily through a €39 million corporate loan from EIB Global, backed by financial guarantees from the European Union.

This European support was complemented by co-financing from the African Development Bank (AfDB), which provided approximately €19.6 million (split between a loan and concessional funding), and the Africa Finance Corporation (AFC), which deployed a €55 million bridge loan to fast-track construction and ensure the facility came online by late 2025.

Beyond the European Investment Bank (EIB) and the African Development Bank (AfDB), the financing and ownership structure of Cabeólica involves several other key entities, ranging from private equity funds to national utility providers.

Here are the other financiers and stakeholders involved:

1. Private Equity and Bridge Financing

• Africa Finance Corporation (AFC): In addition to providing a €55 million bridge loan to fast-track the construction of the expansion in 2024, the AFC has been a majority investor in Cabeólica S.A. since 2010.
• A.P. Moller Capital: This Danish fund management company, part of the A.P. Moller-Maersk group, backs the project and is listed as a borrower alongside the AFC for the EIB loan financing the expansion.
• Finnfund: The Finnish development finance institution provided funding to Cabeólica, specifically facilitating the exit of the original developer, InfraCo Africa, in 2016.

2. Concessional Funding

• Sustainable Energy Fund for Africa (SEFA): The financing package from the AfDB includes approximately US$ 7.89 million (approx. €7 million) in concessional funding specifically from SEFA, which complements the main AfDB loan.

3. National Partners (Shareholders)

• Electra S.A.: The national electricity and water utility of Cabo Verde is a founding partner and shareholder in the Public-Private Partnership (PPP).
• Government of Cabo Verde: The state maintains an ownership stake through the Ministry of Tourism, Industry, and Energy.

4. Historical Developers

• InfraCo Africa / EleQtra: While they have largely exited to allow for new investment, InfraCo Limited was the original private developer that established the PPP in 2008/2009 using funds from European countries to de-risk the initial project.

A Model Public-Private Partnership (PPP)

Established in 2009/2010, Cabeólica S.A. was the first commercial-scale renewable PPP in sub-Saharan Africa, formed between the Government of Cabo Verde, the national utility Electra, and private investors. The Phase II expansion consolidates this model, proving that private capital can be successfully crowded in to support national climate goals in Small Island Developing States (SIDS).

Ayotunde Anjorin, Chairman of Cabeólica, emphasized that the project underscores a deep commitment to delivering reliable clean energy through a structure that is "replicable for the region".

Strategic Impact: Towards "Ambition 2030"

The immediate impact of the expansion is a jump in Cabo Verde's renewable energy penetration from approximately 20% to 30% of the national electricity mix. By displacing expensive imported diesel and heavy fuel oil, the project enhances the country's energy security and protects the economy from volatile global fuel prices.

EIB Vice-President Ambroise Fayolle described the project as a "game changer," noting that it serves as a global model for how small island states can harness wind power potential not just for occasional energy, but as a reliable, clean baseload for their populations.

The Prime Minister visited the expansion project of the Cabeólica Wind Park in Praia, a €60 million investment focused on wind energy production and battery storage. The project is considered a major environmentally friendly initiative and is expected to reduce energy costs in Cabo Verde.

The expansion includes the installation of three new wind turbines with 4.5 MW capacity and a battery energy storage system, which will significantly increase renewable energy penetration. By 2026, the project will help raise the share of renewable energy from the original target of 30% to 35%, combining wind and solar power. Increased storage capacity will also reduce energy waste and improve the stability of electricity production.

Once completed, the expanded Cabeólica Wind Park will enable the production and storage of up to 60% of renewable energy, benefiting the islands of Santiago, São Vicente, Sal, and Boavista. The project will reduce dependence on fossil fuels, lower energy production costs, and decrease electricity bills for households and businesses.

The initiative is aligned with Cabo Verde's broader energy transition and climate objectives, making use of the country's abundant wind and solar resources to strengthen energy security, reduce vulnerability to external energy crises, and contribute to climate change mitigation. The expansion project is scheduled to be implemented within the current year.