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The African Development Bank (AfDB) and the governments of Cabo Verde and Portugal have signed a country specific memorandum of understanding for the implementation of the Lusophone Compact, which aims to accelerate private sector development in Portuguese-speaking countries of Africa.

The treaty was signed by Cabo Verde’s Vice Prime Minister and Minister of Finance Olavo Correia, Portugal’s Ambassador to Cabo Verde, Helena de Paiva and Moono Mupotola, the Bank’s director for regional integration.

“We are confident that the Compact will assist us in diversifying and strengthening Cabo Verde’s economy in the coming years,” Correia added.

The Lusophone Compact is a financing platform, involving the African Development Bank, Portugal, and the six Portuguese-speaking countries of Africa (PALOPs): Angola, Cabo Verde, Equatorial Guinea, Guinea-Bissau, Mozambique and Sao Tome and Principe.

It provides risk mitigation, investment products and technical assistance to accelerate private sector development in Lusophone African countries.

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Following the signing of the general Lusophone Compact at the Africa Investment Forum in November 2018, the Bank and Portugal are signing country specific agreements with each PALOP, focusing on the needs of each country.

Mozambique’s was signed in March 2019, and an agreement with Angola will also be signed this July.

According to Moono, “the Compact will help address Cabo Verde’s infrastructure bottlenecks that limit private sector development and diversification. That will transform sectors such as agriculture transformation, the blue economy and small industry to support inclusive growth and formal job creation for the youth and women of Cabo Verde.”

The Portuguese Government allocated €400 million in guarantees and other risk sharing mechanisms in the 2019 national budget to support the implementation of the Compact, said de Paiva.

Projects eligible under the Compact are expected to align with the Bank’s development priorities, relevant country strategy papers and national development plans and involve the host country and at least two other Compact signatories.

Focus will primary be on renewable energies, agribusiness and agricultural value chains, water and sanitation, infrastructures, tourism, financing and ICT.