Cabo Verde EU Cooperation

Renewable Energy Storage

Turning the Tide: The Santiago Pumped Storage Project and Cabo Verde's Green Energy Future

Cabo Verde is currently undertaking a transformative infrastructure initiative designed to overhaul its energy sector and reduce its historic reliance on expensive, polluting fossil fuels. At the heart of this transition is a Global Gateway flagship project on Santiago Island involving the design and construction of a pumped storage facility and the comprehensive modernization of the electricity grid,. Backed by a €159 million "Team Europe" financing package, this project represents a critical step toward the archipelago's energy autonomy and climate resilience.

Based on the provided sources, the Santiago Pumped Storage Project is located in the Ribeira Grande de Santiago municipality on Santiago Island, approximately 20 km west of the City of Praia.

Specific details regarding the exact site include:

Selected Site: The facility is being constructed at a site known as Chã Gonçalves, which was selected over an alternative candidate site (Mato Sancho) due to slightly lower social impacts.
Reservoir Locations: The project utilizes two large off-stream reservoirs. The upper and lower reservoirs are located near the Ribeira Ribão Seco and Ribeira de São João rivers, respectively.
Connection: The two reservoirs will be connected by a penstock approximately 0.8 km in length.

Stabilizing the Grid with Green Storage

The centerpiece of this initiative is a 20 MW turbine/reversible pump storage plant with an energy storage capacity of 150.8 MWh. The system functions using two large off-stream reservoirs—one upper and one lower—connected by a 0.8 km penstock,. This technology addresses a primary challenge of renewable energy: intermittency. By storing surplus energy generated from wind and solar sources and redistributing it during peak demand, the facility ensures optimal resource management and grid stability.

This storage capability allows the national utility to minimize the curtailment of renewable energy and use the hydro facility to provide spinning reserve services, replacing the need for thermal generation. Beyond storage, the project includes the digitalization and reinforcement of the national electricity grid (SMART grid) and the installation of batteries and converters to further enhance energy flexibility. These efforts align with Cabo Verde's National Electricity Masterplan (2018–2040), aiming to eliminate dependence on fossil fuels by 2040 and ensuring that new storage capacities are dedicated to renewable sources,.

A Team Europe Investment

To realize this ambitious infrastructure, "Team Europe" mobilized a financing package of €159 million. This "blended" financial support consists of a sovereign loan of €120 million from the European Investment Bank (EIB) combined with a €29 million grant from the European Union,. This financial structure is designed to address market failures and reduce energy costs while strengthening sustainable development. The project also carries significant indirect benefits for the country's water sector, as the renewable energy stored can support energy-intensive water desalination processes.

Luxembourg's Pivotal Coordination Role

While the EIB and EU provide the bulk of the capital, Luxembourg has played a central and strategic role in bringing this complex project to fruition. Operating under the Global Gateway strategy, Luxembourg coordinated the multi-stakeholder investments to ensure they met both European standards and the specific needs of local Cabo Verdean communities,.

Luxembourg's contribution was foundational; since 2019, the country provided €3 million (later totaling nearly €4 million) to finance the essential preparatory and feasibility studies that laid the groundwork for the construction phase,. Through its "Development – Climate – Energy" Indicative Cooperation Programme (2021-2025), Luxembourg leveraged its strategic influence with the EIB and the EU to mobilize the necessary large-scale funding,. This "whole-of-government" approach allowed Luxembourg to effectively align the European offer with Cabo Verde's local priorities, facilitating a partnership built on trust and proximity.

With commissioning targeted for the end of 2027 or 2028, the Santiago pumped storage facility stands as a testament to the power of international cooperation in driving the green transition,.

The Government of Cabo Verde presented, in the city of Praia, the Renewable Energy Storage Plant Project for Santiago, aimed at accelerating the country's energy transition. The project seeks to increase the share of renewable energy in the national electricity system, improve energy efficiency, and ensure universal access to energy, with the goal of achieving over 50% renewable electricity by 2030 and moving closer to 100% by 2040.

The Prime Minister highlighted that this project represents the largest investment in the energy sector, not only in financial terms but also due to its strategic impact. By significantly increasing energy storage capacity, the plant will enable higher renewable energy production, which is essential to meeting Cabo Verde's long-term energy targets.

The European Union Ambassador praised Cabo Verde's progress under the Global Gateway Initiative, an "Team Europe" approach that brings together the EU, its Member States, and European financial institutions such as the European Investment Bank. The initiative aims to mobilize up to €300 billion in public and private investments by 2027, with around half allocated to Africa. Cabo Verde is already benefiting from this initiative through access to concessional financing for strategic and transformative investments.

Luxembourg's Chargé d'Affaires reaffirmed his country's commitment to supporting Cabo Verde's sustainable and resilient development through the existing cooperation partnership.

The construction of the renewable energy storage plant in Santiago is scheduled to begin in 2025, will be located in São João Batista, Ribeira Grande de Santiago, has an estimated cost of €60 million, and is expected to become operational in 2028. The project is the result of a partnership between Cabo Verde, the European Union (Global Gateway), Luxembourg, and the European Investment Bank.

Cabo Verde EU Cooperation renewable energy storage