Cabo Verde EU Cooperation

Team Europe Investments in Cabo Verde

Team Europe Investment in Cabo Verde: A Blueprint for Strategic Partnership

The European Union's development policy has undergone a significant structural evolution with the adoption of the "Team Europe" approach.

Designed to overcome the fragmentation of European aid and maximize geopolitical impact, this mechanism pools resources from the EU, its Member States, and their financing institutions—most notably the European Investment Bank (EIB). Cabo Verde, a stable archipelagic democracy in the mid-Atlantic, has emerged as a primary beneficiary and testing ground for this integrated investment model, particularly under the Global Gateway strategy.

Background and Rationale: "Working Better Together"

The Team Europe approach was initially conceived as a global response to the COVID-19 pandemic but has since evolved into the standard operating procedure for the EU's external action..

The core rationale is to combine the "financial firepower" of the EU budget with the expertise and capital of Member States and development finance institutions to create critical mass and achieve transformational impact,,.

In Cabo Verde, this approach addresses the specific vulnerabilities of a Small Island Developing State (SIDS)—namely energy dependence, territorial fragmentation, and climate exposure—while supporting the country's "Ambition 2030" development strategy,. By utilizing the European Fund for Sustainable Development Plus (EFSD+) to provide guarantees, Team Europe aims to "de-risk" investments, thereby crowding in private sector capital for infrastructure projects that might otherwise be considered too risky,. This strategy marks a shift from traditional donor-recipient aid toward a partnership focused on sustainable investments and strategic autonomy.

The Investment Package: A Transformational Scale

In late 2024 and throughout 2025, Team Europe operationalized a massive financing package for Cabo Verde. Initially announced as €300 million, the total support package had risen to €398 million by late 2025 when including budget support and other instruments,.

This investment is concentrated on three strategic pillars designed to modernize the archipelago's economy: the green energy transition, maritime transport infrastructure, and digital connectivity.

1. The Green Energy Transition

Cabo Verde aims to achieve 50% renewable energy penetration by 2030 and net-zero emissions by 2050,. Team Europe is the primary financial backer of this transition.

Santiago Pumped Storage Facility: The flagship project of the energy portfolio is the design and construction of a pumped storage system on Santiago Island. This facility is essential for storing renewable energy and stabilizing the grid, allowing for the integration of intermittent wind and solar power,. The project is financed through a €159 million Team Europe package, comprising a €120 million sovereign loan from the EIB, a €29 million EU grant, and technical support from Luxembourg,.
Cabeólica Wind Farm Expansion: In December 2025, Team Europe (via EIB Global) inaugurated the expansion of the Cabeólica wind farm. A €39 million corporate loan, backed by EU guarantees, financed the addition of 13.5 MW of wind capacity and 26 MWh of battery energy storage systems (BESS) across four islands,,. This public-private partnership is a model for integrating variable renewables in island grids.

2. The Blue Economy and Sustainable Ports

To position Cabo Verde as a logistic platform in the Atlantic, Team Europe mobilized €105 million (approx. $116 million) to modernize strategic port infrastructure,.

Port Modernization: The funding targets the expansion and rehabilitation of Porto Grande (São Vicente), Porto Novo (Santo Antão), and Porto da Palmeira (Sal). These upgrades aim to unify the country's scattered market and enable the private sector to invest in the nautical economy.
Shipyard Rehabilitation: The package also finances the rehabilitation of the CABNAVE shipyard in São Vicente, bolstering the country's naval repair capacity.
Mindelo Cruise Terminal: Inaugurated in June 2025, this terminal represents the visible fruit of this strategic partnership, aiming to transform the country into a cruise hub.

3. Digital Connectivity

Team Europe is supporting Cabo Verde's ambition to become a digital hub for West Africa through a €37 million financing agreement aimed at reducing the "digital divide".

Submarine Cables: This investment supports the connection to the state-of-the-art EllaLink submarine cable system (linking Europe to Latin America) and the replacement of the fiber-optic submarine cables that interconnect the archipelago's islands,.
Economic Impact: These upgrades are designed to improve the availability and quality of connectivity for local businesses and support the creation of high-skilled jobs, positioning Cabo Verde as a digital convergence point between Africa, Europe, and South America,.

The Role of Member States: The Luxembourg Case

A defining feature of Team Europe is the active coordination with EU Member States. Luxembourg has played a pivotal role in Cabo Verde, particularly in the energy sector. Through its "Development – Climate – Energy" program (2021-2025), Luxembourg utilized a "whole-of-government" approach to leverage its influence with the EIB and the EU, mobilizing the financing necessary for the Santiago pumped storage facility,. This case illustrates how smaller Member States can drive large-scale Team Europe initiatives by aligning their bilateral cooperation with broader European financial instruments.

Summary:

The Team Europe investments in Cabo Verde represent a concrete application of the Global Gateway strategy. By pooling nearly €400 million for critical infrastructure, the EU is moving beyond piecemeal aid to deliver structural economic transformation. Whether through stabilizing the energy grid on Santiago, expanding ports in Mindelo, or laying fiber optic cables, Team Europe is actively financing the physical and digital foundations of Cabo Verde's future economy.