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PRESS RELEASE June 6, 2019

Cabo Verde Receives World Bank Support for Fiscal Risk Reduction and to Build Resilience to Climate-Related Shocks

WASHINGTON, June 6, 2019 – The World Bank Board of Executive Directors approved on June 5 an International Development Association (IDA)* credit of $40 million to help reduce fiscal risks associated to the national airline, Cabo Verde Airline (TACV) and promote a strategic partnership in the maritime sector for improved quality of inter-island maritime transportation services in Cabo Verde.

This Development Policy operation will help strengthen the financial capacity of the public energy utility, enhance the financial performance of the social housing program to reduce associated debt service risks, and improve legislation for budget and debt management.

According to Louise Cord, World Bank Country Director for Cabo Verde, “the goal of this financing is to support decisive and difficult reforms aimed at repositioning the role of the state in the economy while addressing the overarching binding constraint of connectivity, as identified in the 2018 Systematic Country Diagnostic.”

This is the first in a series of two operations which will support the Government of Cabo Verde in its efforts to keep public debt on a downward trend while improving the delivery of key services for connectivity and economic growth,” said Rohan Longmore, Christine Richaud, and Kjetil Hansen, World Bank Task Team Leaders for this operation. The first pillar of this series focuses on reducing fiscal risks from state-owned enterprises while promoting private sector-led provision of infrastructure services. The second pillar aims to strengthen accountability and effectiveness in fiscal management.

On the same day, the World Bank Board of Executive Directors also approved an IDA* credit of $5 million and an International Bank for Reconstruction and Development (IBRD)** loan of $5 million for the Cabo Verde Disaster Risk Management Development program to strengthen the institutional and legal framework to increase disaster and climate resilience. This credit will incorporate disaster and climate resilience considerations and technical standards into the management of school infrastructure and territorial planning.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $19 billion over the last three years, with about 50 percent going to Africa.

** The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.