The board of directors of the African Development Fund approved a donation of €6.28 million ($6.78 million) to São Tomé and Príncipe to implement the first phase of the Economic Reform and Electricity Sector Support Program (ERPSSP-I).
According to the document presented to the administrators of the concessional rate loan window of the African Development Bank, the ERPSSP-I should contribute, through key reforms, to strengthening macroeconomic stability, to inclusive and sustainable economic growth and to poverty reduction.
The ERPSSP-I also encourages the increase in private investment as well as the reliability and efficiency of the country’s electricity supply.
Through the ERPSSP-I, the African Development Fund supports the structural reform programme of the Santomean government but also the efforts to consolidate public finances to face short-term macroeconomic risks.
The ERPSSP-I constitutes the first phase of a budget support operation based on the programmes covering the years 2019-2021, and whose overall indicative funding amounts to €12.358 million ($13 million).
By supporting short-term government reforms, the ERPSSP will make a decisive contribution to containing current expenditure, mobilising revenue, and increasing the energy efficiency of the public sector.
Spill overs that will make it possible to face the budgetary risks posed by the national electricity company (EMAE), by bridging the deficit of financing of the government of 2019-2021.
The policies and reforms supported by this operation are in line with pillar II of the 2018-2022 Country Strategy Document approved by the African Development Bank in June 2018.
They are also aligned with the Strategic Framework and Action Plan for the governance (GAP II 2014-2018).