Cabo Verde - EU Cooperation 

1. National Indicative Programme (NIP)

The strategic framework 

What it is: Think of this as a 5-7 year "contract" between the EU and Cabo Verde that says "here's how much money we're giving you, and here's what we'll spend it on together."

How it works: Every few years, the EU and Cabo Verde sit down and agree on priority areas (like renewable energy, education, or water). The EU commits a specific amount of money for that period. For example, the 2021-2027 NIP might allocate €100 million with €40 million for energy, €30 million for governance, €30 million for water.

Why it matters: This is the main planning document. If you want to understand EU-Cabo Verde cooperation, find the current NIP—it's your roadmap.

Real-world example: "The EU will give Cabo Verde €55 million over 5 years, with €25 million going to renewable energy projects."

 Context and Rationale

The Multi-Annual Indicative Programme (MIP) was established to support Cabo Verde's recovery from the COVID-19 recession, which exposed the structural fragilities of its country context as a Small Island Developing State (SIDS),. Despite being a stable democracy and a strategic "Mid-Atlantic Hub," the country faces severe development challenges, including a 14.8% GDP drop, public debt reaching 151%, and extreme dependence on imported fossil fuels and fluctuating tourism markets,,.

The EU external action aims to fuel a transformational shift from this vulnerable model toward an "inclusive green growth economic model". This intervention aligns closely with the national development strategy—specifically the Strategic Plan for Sustainable Development (PEDS) and the "Cabo Verde 2030 Ambition"—which targets 50% renewable energy consumption by 2030,.

Building on the 2007 EU-Cabo Verde Special Partnership, the EU intervenes to mitigate socio-economic instability and diversify the economy,. The strategy prioritizes governance for human development and the green economy, utilizing Budget Support and investment guarantees to reduce inequalities and enhance resilience against external shocks,,.

Legal and Policy Framework

The Multi-Annual Indicative Programme (MIP) operates under the NDICI–Global Europe regulation, specifically coordinating with EU Outermost Regions. Legally, it is anchored in the 2007 EU-Cabo Verde Special Partnership established under the Cotonou Agreement, which governs political and economic cooperation.

Strategically, the MIP integrates the EU external cooperation agenda through the Global Gateway approach, positioning Cabo Verde as a connectivity hub for Africa, Europe, and Latin America. It also leverages the External Investment Plan and Circular Economy Action Plan to foster resilience.

Regarding global commitments, the programme is guided strictly by the Sustainable Development Goals (SDGs), mapping specific interventions to SDGs 1, 4, 5, 7, 10, 14, and 16. Furthermore, it actively advances the Paris Agreement by supporting the nation's 50% renewable energy target, showcasing a transformative climate model. This structure ensures policy coherence by aligning Cabo Verde's "Ambition 2030" with EU geo-strategic priorities in the Green Deal and Digitalisation.

Objectives and Priorities

The EU's overall goal in Cabo Verde is to drive a "transformational shift" toward an "inclusive green growth economic model," moving away from the vulnerable reliance on imported fossil fuels and mass tourism exposed by COVID-19,.

To achieve this, the NIP establishes two strategic priorities:

1. Governance for Human Development and Equality: The specific objective is reducing inequalities and fostering inclusive growth. This area prioritizes social protection, education (specifically reducing girls' dropout rates), and public finance management to ensure no one is left behind during the recovery,.
2. Green Economy for Decent Jobs and Inclusive Growth: This area targets the specific objective of enhancing key economic drivers. The sectoral focus centers on three pillars: Renewable Energy (aiming for 50% consumption by 2030), Sustainable Tourism, and the Blue Economy.

These sectors were prioritized because they generate formal employment and offer the highest potential for productivity gains and economic resilience. Adopting a results-based approach, the EU tracks success through concrete indicators, such as the Gini Index and renewable energy percentages,.

Financial Allocation

The financial envelope for the initial phase (2021–2024) totals EUR 24 million. The budget allocation prioritizes social stability, with Priority Area 1 (Governance for Human Development) receiving the largest share: EUR 12 million (50%). This funding primarily supports social protection and education through grants and budget support,.

Priority Area 2 (Green Economy) receives EUR 9 million (38%). While the direct grant amount is lower, this sector is strategically designed to leverage blending mechanisms and guarantees. Approximately EUR 3 million of the total budget is indicatively reserved to provision EFSD+ operations, intended to de-risk and attract private investment for renewable energy and the blue economy,. Finally, EUR 3 million (12%) is dedicated to support measures, including civil society and technical cooperation.

This distribution is consistent with EU funding instruments strategies: using grants for essential public services (Priority 1) while utilizing guarantees to multiply capital for economic growth sectors (Priority 2),.

Implementation Modalities

The programme is implemented primarily through the Central Government, while actively expanding engagement to municipalities, civil society, and the private sector to ensure broad ownership,,.

Budget support remains the central implementation mechanism, identified as the most efficient tool for maintaining high-level policy dialogue with the Ministry of Finance and line ministries,. This is strategically complemented by blending and guarantees (under EFSD+) to de-risk private investments in the Green Economy (Priority 2), alongside Technical Assistance and Twinning to bridge capacity gaps,,.

Donor coordination is highly structured to ensure effectiveness. The Budget Support Group (GAO)—comprising the EU, World Bank, AfDB, and Member States—conducts biannual reviews of public finance and reforms,. Additionally, the Team Europe Initiative "To Green Cabo Verde" harmonizes efforts with Member States (France, Luxembourg, Portugal, Spain) and the EIB to maximize impact in renewable energy and the blue economy, with fully-fledged joint programming envisaged by 2024,.

Cross-Cutting Issues

These issues are treated as strategic priorities rather than optional add-ons, forming the core of the "Inclusive Green Growth Compact".

Gender mainstreaming is embedded in Priority Area 1, addressing structural inequalities such as female-headed household poverty (68% of extreme poor families) and Gender-Based Violence (GBV). It utilizes a human rights-based approach, specifically targeting girls' secondary school completion and mandating gender-disaggregated statistics to ensure accountability,.

Climate mainstreaming drives Priority Area 2 ("Green Economy"), which operationalizes the Paris Agreement by supporting Cabo Verde's ambition for 50% renewable energy by 2030,. Climate objectives command substantial funding, with 32% of the green economy budget earmarked specifically for climate change.

Human rights and governance underpin the entire programme, focusing on social protection, labor standards, and democratic institutions,.

Finally, digital transformation is integrated as a cross-cutting enabler. It supports governance efficiency (e.g., judicial systems) and positions Cabo Verde as a trans-Atlantic digital connectivity hub via the Global Gateway strategy,.

Monitoring, Evaluation, and Results Framework

The MIP employs a robust results framework that links specific interventions directly to the SDGs. Indicators are generally clear and quantifiable, combining social metrics—such as reducing the Gini Index to 38.5 and eradicating extreme poverty by 2026—with economic targets like achieving 50% renewable energy consumption and reducing public debt to 127% of GDP by 2024,,,. However, some sector-specific measurements, particularly for sustainable tourism, rely on new indices to be developed through Technical Assistance, indicating a gap in current data availability.

Monitoring mechanisms are institutionalized through high-level policy dialogue. The Budget Support Group (GAO) conducts biannual reviews with the Government to assess Public Finance Management and macroeconomic stability, ensuring continuous oversight,. Progress is verified using national data from sources like the National Statistical Institute (INE) and Ministry reports,.

Regarding evaluation, the programme follows a phased approach. A mid-term review is scheduled for 2024 to assess the initial phase (2021–2024) and determine the financial allocations for the second phase (2025–2027), allowing for strategic adjustments based on performance measurement,.

Risk Analysis and Assumptions

The primary threat to the NIP is economic fragility driven by the COVID-19 recession. With public debt reaching 151% of GDP, the central risk is a "continued recession" pushing the state into debt stress, rendering it unable to fund its policies,. Additionally, there is a high risk of private sector default and a decline in Foreign Direct Investment (FDI), which are essential for the proposed economic transition,.

Structurally, Cabo Verde faces inherent environmental and SIDS-related risks, including exposure to natural hazards, water scarcity, and extreme dependence on imported fossil fuels and fluctuating tourism markets,.

Mitigation measures rely heavily on international cooperation. Strategies include budget support from the EU, World Bank, and AfDB to safeguard social cohesion, alongside ongoing debt restructuring negotiations. To counter economic stagnation, the EU utilizes guarantees to de-risk and incentivize private "green" investments,.

The programme relies on the assumption that shifting to renewable energy will drastically reduce costs, thereby attracting FDI and increasing economic resilience. It further assumes the government will maintain a firm political commitment to this green model despite severe fiscal constraints.

Coherence and Complementarity

The NIP demonstrates strong policy coherence by strictly aligning with Cabo Verde's Strategic Plan for Sustainable Development (PEDS) and "Ambition 2030," particularly regarding the 50% renewable energy target,,. It actively avoids duplication through the Team Europe Initiative "To Green Cabo Verde," which harmonizes interventions with Member States (Luxembourg, Portugal, Spain, France) and the EIB to maximize impact rather than fragmenting aid,.

Complementarity is further ensured by integrating regional frameworks like the PALOP-TL programme and Interreg MAC (cooperation with EU Outermost Regions), reinforcing Cabo Verde's status as a strategic Mid-Atlantic hub,. The programme delivers specific EU added value by deploying instruments like the Global Gateway for digital connectivity and EFSD+ guarantees to de-risk private "green" investments—financial tools that national budgets and smaller donors cannot provide,,.

Globally, the NIP operationalizes the Paris Agreement and SDGs (specifically 1, 5, 7, 10, and 14), ensuring that the local "Green Deal" remains consistent with international climate and development commitments,,.

Critical Assessment

The programme demonstrates strong ownership by strictly aligning with Cabo Verde's "Ambition 2030" and prioritizing budget support, a modality proven effective for maintaining high-level policy dialogue. The specific objective of reaching 50% renewable energy is ambitious but strategically underpinned by EFSD+ guarantees designed to de-risk essential private investment.

However, the strategy faces significant structural risks. Effectiveness is threatened by the country's severe debt burden (151% of GDP), which restricts the government's ability to sustain reforms without continuous external aid. Furthermore, the results framework displays weaknesses; key indicators for sustainable tourism do not yet exist and rely on future technical assistance, complicating immediate impact assessment.

Ultimately, sustainability hinges on the economic premise that the green transition will permanently lower energy costs and import dependence. If the anticipated private capital (FDI) fails to materialize due to global recession, the results are unlikely to last after EU funding ends.