Washington — The World Bank approved a $25 million Development Policy Financing (DPF) loan for Cabo Verde, supporting key efforts to strengthen fiscal consolidation and sustainable economic growth. The DPF operation consists of credits from the International Development Association (IDA).
The DPF is strategically aligned with Cabo Verde's efforts to address challenges posed by recent global crises and achieve sustainable and climate-resilient development. "Cabo Verde's economy is emerging well from recent shocks. Reforms to strengthening fiscal resilience - through higher revenues and mitigating potential shocks - is critical for this recovery as well as for key investments in the blue and green economy", said Anna Carlotta Massingue, Senior Economist.
The operation, the second in a series of three, builds on the reform progress under the first series and is aligned with Cabo Verde's Strategic Plan for Sustainable Development II (PEDS II). Importantly, it supports efforts to rebuild fiscal space while introducing key reforms for a sustainable economic future. It consists of three pillars: Pillar A, "Strengthen Fiscal Resilience," focuses on mobilizing domestic revenue, streamlining tax incentives for greater efficiency, strengthening climate resilience of public investments, and enacting reforms to improve the performance of State-Owned Enterprises. Pillar B, "Enable the Uptake of Digital Services and Renewable Energy," promotes digitalization and climate resilience of public services, competition in the telecoms sector and increased renewable energy generation. Pillar C, "Enhance Economic Opportunity" focusses on improved sustainability and quality of fisheries, promotes diversification and resilience in the tourism sector, and enables increased economic participation among women.
"This operation underscores the World Bank Group's commitment to working hand-in-hand with Cabo Verde to achieve its development objectives. The approval of the DPF - which draws on expertise across the World Bank and the IFC - marks an important milestone in these collaborative efforts to build a more sustainable and inclusive economic future for the people of Cabo Verde," said Indira Campos World Bank Group Cabo Verde Resident Representative.
