AFD Group activity in Cape Verde
AFD has been operating in Cape Verde since 1990 in the infrastructure and banking sectors. Activities in Cape Verde are supervised by the AFD Director for Cape Verde and Guinea Bissau who is based in Dakar.In Cape Verde AFD participates in nationwide non-sovereign risk operations which sometimes take an innovative approach. The two biggest operations took place in 1996 and 2005 and respectively involved:
- financing the development and modernization of Sao Pedro airport on Sao Vicente Island;
- opening a concessional line of credit to three Cape Verde commercial banks to refinance loans granted to municipalities (€5M) for their investment projects.
Owing to the Republic of Cape Verde moving from the status of a Least Developed Country (LDC) to a Mid-Developed Country (MDC) on 1 January 2008, AFD was authorized by its supervisory authorities to implement a major change to its operating methods in this country. Indeed, AFD was previously only able to operate via grants, but since 2007 has been able to allocate sovereign loans that meet conditions of eligibility for Official Development Assistance (ODA).
AFD’s objectives, in line with the Partnership Framework Document (PFD), are (i) to support the growth of this insular and archipelago State by developing economic infrastructure that specifically meets the needs of investors and companies and (ii) to improve living conditions for populations, particularly the poorest, by promoting socio-economic infrastructure that will give them access to basic services. In line with the PFD “AFD’s commitments will be in the form of concessional loans with amounts for the 2006-2011 fiscal period in the region of €25M”.
The Millennium Development Goal (MDG) concentration sectors defined for French-Cape Verdean cooperation are the infrastructure and water and sanitation sectors. Sovereign and non-sovereign loans are AFD’s preferred financing methods for this type of socio-economic infrastructure at both national and local levels. A major water and sanitation project is currently being prepared thanks to the implementation of a Study and Capacity Building Fund (FERC) for Cape Verde in late 2006. The renewal of the current line of credit to municipalities is also being envisaged.
